Sunday, January 25, 2015

SPX Support, Resistance (S/R), Moving Averages and Other Important Levels for Trading the Markets the Week of 1/26/15

SPX (S&P 500) support, resistance (S/R), moving averages and other important levels are provided for trading the week of 1/26/15. 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 2093.55 on 12/29/14 and the SPX all-time closing high is 2090.57 on 12/29/14. The high for this year is 2072.36 and the low for this year is 1988.12.

For Monday with the SPX starting at 2052, the bears only need one negative point in the S&P futures, to push the SPX under 2050.50 after the opening bell, and the downside will accelerate. The bulls need to touch the 2063 handle and bingo, the upside will accelerate to immediately test the 2067 R. A move through 2051-2062 is sideways action to begin the week.

The CPC put/call ratio spiked to 1.28 indicating fear and panic and a near-term bottom at hand but the behavior is out of sync as to what would be expected. There was a large push for put buying on Friday and much of that may be due to the Greece elections where results are coming in as this is typed. Nonetheless, the CPC indicates enough fear to create a near-term bottom. If markets sell off, the fear should grow and the CPC should move higher and that would provide more confidence in identifying a near-term bottom with an even higher CPC. Monday and Tuesday may be interesting days if the CPC decides to continue spiking higher (stocks would plummet).

January ends on Friday, EOM, and as the ole Wall street adage says, "as January goes so goes the year " so there may be some price jockeying for position at the starting year and starting month number at 2059 as the week plays out. The 2059 will determine if January is an up month or down month. Price came up on Friday through the strong 2061 resistance but never made It to the 2067 R so a test of that level may be on the come.

The 2057-2067 resistance gauntlet is important. Bulls win big above 2067. Bears remain in the game if they can hold 2067. Price thrusts up through the 20-day MA and 50-day MA’s at 2046-ish last week creating bull juice. The 2043-2047 support is important and price will want to back kiss these important moving averages; the 20-day MA at 2043 and 50-day MA at 2047. The 2038-2040 is another strong gauntlet of support underneath. If the 20-day MA fails, price will be at 2038-2040 lickity-split. The 1988 is the low this year thus far and note the importance of the 10-month MA at 1987. When markets venture lower and lose the 10-month MA, serious trouble will begin.

Looking at the big picture the strongest S/R is 2094, 2091, 2088, 2082, 2079, 2075-2076, 2067, 2061, 2046, 2040, 2038, 2032, 2018-2019, 2011, 2002-2003, 1998, 1988, 1985-1986 and 1982.

2094 (12/29/14 All-Time Intraday High: 2093.55)
2091 (12/29/14 All-Time Closing High: 2090.57)
2079 (12/5/14 Intraday High: 2079.47)
2076 (11/28/14 Intraday High: 2075.76)
2075 (12/5/14 Closing High: 2075.37)
2073 (11/26/14 Closing High: 2072.83)
2072 (1/2/15 Intraday High for 2015: 2072.36)
2071 (11/21/14 Intraday High: 2071.46)
2064.62 Previous Week’s High
2062.98 Friday HOD
2063 (1/22/15 Closing High for 2015: 2063.15)
2058.90 January Begins Here
2058.90 Trading for 2015 Begins Here
2056 (11/18/14 Intraday High: 2056.08)
2051.82 Friday Close – Monday Starts Here
2050.54 Friday LOD
2046.89 (50-day MA)
2046 (11/13/14 Intraday High: 2046.18)
2042.95 (20-day MA)
2037.63 (200 EMA on 60-Minute Chart a Keystone Market Turn Signal)
2019 (9/19/14 Intraday High: 2019.26)
2016.82 (20-week MA)
2011 (9/18/14 Closing High: 2011.36) (9/4/14 Intraday High: 2011.17)
2009.14 (100-day MA)
2007 (9/5/14 Closing High: 2007.71)
2005 (8/26/14 Intraday High: 2005.04)
2004.49 Previous Week’s Low
2003 (8/29/14 Closing High: 2003.37)
1994.85 (150-day MA; the Slope is a Keystone Cyclical Signal)
1993 (1/15/15 Closing Low for 2015: 1992.67)
1991 (7/24/14 Intraday Top: 1991.39)
1988 (7/24/14 Closing High: 1987.98) (1/16/15 Intraday Low for 2015: 1988.12)
1987.04 (10-month MA; a major market warning signal)
1986 (7/3/14 Intraday Top: 1985.59)
1985 (7/3/14 Closing High: 1985.44)
1970.05 (200-day MA)
1968 (6/24/14 Intraday Top: 1968.17)
1966.85 (12-month MA; a Keystone Cyclical Signal) (the cliff)
1963 (6/20/14 Closing High: 1962.87)
1956 (6/9/14 Intraday Top: 1955.55)
1954.30 (50-week MA)
1951 (6/9/14 Closing High: 1951.27)

Saturday, January 24, 2015

NYA NYSE Composite Weekly Chart 40-Week MA Cross Cyclical Bear Market

The bears were crying in their beerski's last Thursday evening as the bulls regained the 40-week MA but in Friday trading the bears slapped the bulls in the face pushing the NYA back under the 40-week MA signaling a cyclical bear market ahead for weeks and months perhaps longer. Of course this battle will continue. The bulls were able to recover from the October failure, and also recover from the December failure.

Type "central banker collusion" into the search box at the right margin and bring up two prior articles that describe in detail how the Fed, BOJ, ECB and other central bankers collude and coordinate to pump the stock market higher saving the day in October and December.

The importance of this chart cannot be overstated. If the NYA remains under the 40-week MA, stocks are going to finish lower this year and the universal consensus on Wall Street for SPX 2150-2350 will be incorrect. If you remain bullish the market, you need the NYA above the 40-week MA, otherwise you will lose money week after week moving forward.

The fight continues on Monday. The stock market is in a cyclical bear market going forward unless the bulls can regain the 40-week MA. 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.

Friday, January 23, 2015

SPX 2-Hour Chart Negative Divergence Developing

The bulls keep pushing price higher and the MACD line remains long and strong. The RSI is not yet overbot (it may or may not become overbot).  Those are two bullish items but the other indicators (red lines) are negatively diverged wanting to see price roll over. The matching top over the last four candlesticks is cheesy. Price barely prints a matching high. Considering the MACD line, price likely wants to test the strong 2067 resistance since it came up this far. When that occurs, the MACD line will like turn neggie d and that will create the short-term top.

The MACD line will need one to three candlesticks to turn neggie d so that is 2 to 6 hours of trading time so price may not peak out until Monday. If the RSI reverses to the upside and prints a higher high then the SPX will run to the 2075-2076 strong resistance. The thought now is that price should remain in this 2054-2067 range and top out between now and early next week.

The strong S/R shown by the brown lines is 2075-2076, 2067, 2061, 2046, 2040 and 2038. Watch the MACD line to see when it rolls over. 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 3:02 PM: Stocks are sliding late-day. SPX is down to 2055 and dropping. MACD line is flat.

USD US Dollar Index Monthly Chart 11-Year High Fibonacci Retracements Inverted H&S

The dollar is running parabolic from 80 to 95 in only seven months a gain of +19% huge for a currency. The dollar is rising a ridiculous +2% and more per month for over a half year. The US dollar chart is the inverse of the XEU euro chart. For the big move in the dollar and euro during 2001 to 2008, the euro is at its 62% Fib retracement but the dollar is only nearing its 50% Fib at 96.06.

The dollar is at highs not seen since 2003. The RSI is overbot, ditto stochastics. The indicators are long and strong wanting higher highs in the monthly time frame after a pull back occurs. Negative divergence should develop in the months ahead creating a top. The 96 and 102 Fib's are in play. The brown inverted H&S targets 113 but that can occur a year or two down the road. The breakout at 90-92 is important so price would be expected to come back to show it respect (200-week MA is 89.81). The dollar may simply stagger sideways through 90-102 for 2015 into 2016 and frustrate those looking for a continued vertical spike higher.

The indicators are wanting higher highs in the dollar in H1 2015 but the dollar should peak perhaps in the February-July time frame. The 113 and 120 levels are probably not on the radar until 2016-2018 but if the euro plummets from here through 1.08 towards parity, the dollar index will be spiking up through 102 towards 108, however, this is not currently expected. The expectation is for the rise in the dollar to slow and the drop in the euro to slow but both will remain around current levels for a few weeks and months. 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.

XEU Euro Daily Chart 11-Year Low

The euro daily chart is bludgeoned lower with ECB President Draghi's baseball bat. Draghi is running the printing presses non-stop flooding the world with euro's. Grab some and buy stocks. Everyone else is. The euro falls like a stone after the ECB QE announcement from above 1.1600 to 1.1166 an over -4% drop.

The stochastics are oversold and positively diverged so they will work to create a bounce. The other indicators are weak and bleak but much of the beating is already priced-in since the indicators are buried in the cellar. The RSI is down to 15, MACD -2 and lower, and ROC -5.4. Once you get so low there is no where to go but up. So a bounce woudl be expected but the indicators will want a lower low until they can set up with possie d.

The red dots show price extended to the downside so a mean reversion will be required (bounce). Price would be expected to stabilize sideways but a few more days will be needed first with the euro likely printing under today's 1.1166 for a lower low next week. The indicators will set up with positive divergence in the coming days and that will identify the firm near-term bottom for the euro. 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.

XEU Euro Weekly Chart 11-Year Low Price Extended

The weekly chart shows the complete collapse of the euro over the last few months and this week. As Keystone always says, the collapses out of rising wedges can be quite dramatic. This qualifies as a dramatic collapse from the red rising wedge. The indicators are oversold and the RSI, histogram and stochastics are positively diverged wanting to see a dead-cat bounce in this weekly time frame. The MACD line and ROC are weak and bleak so they want another lower low in the euro after any bounce occurs in this weekly time frame.

The red dots show price now extended to the downside under the 20 MA under the 50 MA under the 200 MA so a mean reversion will be needed (bounce). The pink box shows the ADX exploding higher above 51 verifying that the downward drop in the euro is a strong trend in the weekly time frame so this verifies lower lows ahead after any bounces. The ADX on the monthly chart does not show a strong trend in place on a longer term monthly basis as yet but clearly in this shorter several week basis the trend is strong and lower.

Those looking for the euro to plummet towards parity in quick order may be premature according to the indicators. The RSI and stochastics want to see a recovery bounce right now. The euro would be expected to stabilize after some choppy action occurs for a few weeks with a downward bias. At this time the euro is not expected to move below the 1.08-1.12 support zone. It may spend much of the year playing around in this range and parity may not come at all during 2015. However, a falling knife may keep falling--the next several days will be important. 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.

XEU Euro Monthly Chart 11-Year Low Fibonacci Retracements Sideways Symmetrical Triangle Downward-Sloping Channel

The euro drops to the 62% Fib retracement of the rally from 2001 to to 2008 from 0.84, under parity (1.00) to 1.58. The 62% Fib is 1.1213 and the euro is at 1.1261 printing a LOD at 1.1166. If price ventures lower under the 62% Fib a full 100% retracement down to 0.83-0.85 is on the table. Rick Santelli mentioned the Fib retracement on CNBC business television so reference that video if you want to study the Fibonacci retracements more closely.

Sometimes a 76% Fib retracement will occur and that is at the 1.02 level. The big question is if the euro moves to parity at 1.00 (dark blue square). The breakdown out of the red sideways symmetrical triangle is projecting a move to 90. The downward-sloping channel shows the euro approaching the lower support rail and this support continues in conjunction with the 1.08 horizontal support. The stochastics are oversold and will create the initial dead-cat bounce in the monthly time frame. The indicators such as RSI are weak and bleak wanting lower lows after any bounces, but the RSI is oversold as well so a basing would actually be expected say during H1 2015.

The 1.08-1.12 level is sturdy support. It would not be surprising to see price move through 1.08-1.15 into summer time. In other words, the expectation for a continuing collapse in the euro may be premature. Nonetheless, when a price is dropping like that it is hard to know where the bottom is.

The pink boxes show the strong trends over the years like the downtrends in the euro in 1998 and 2000-2001. The uptrend was strong in 2003-2005 and also again as the peak was placed in 2008. After that peak, however, the ADX falls like a stone and there is no strong trend in place for the last six years and this is proven out by the sideways move through 1.20-1.50. That may change since the euro fell out of bed when Draghi fired the QE money bazooka yesterday. The euro is plummeting but the ADX is only at 19. The downtrend in the euro is not strong in this long-term monthly basis until the ADX moves up into the pink box. If the ADX remains at 20-ish and flat or lower, then the euro will likely flatten out and not drop as much as everyone thinks.

The stochastics should create a near-term bottom now into February for a bounce but then weakness should continue on the monthly basis. The 1.08-1.12 range has a good chance of holding into summer time. The next few days are important to see if the knife keeps falling, or not. 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.

NYA NYSE Composite Weekly Chart 40 MA Cross Cyclical Bull Market

The NYA moved above the 40-week MA at 10805 yesterday creating bull rocket fuel. Stocks are in a cyclical bull market if price is above the 40-week MA but in a cyclical bear market if price is below the 40-week MA. There was failure in October where the global central banks had to collude and coordinate to save the day. Then in December another failure which was saved by Fed Chair Yellen flapping her dovish wings at the FOMC meeting to save the day. Now more shakiness to start the year but the ECB steps in to save the day yesterday. You have to be blind if you cannot see that the central bankers control the markets.

The NYA is at 10829 in the bull camp creating broad market lift. Bears got nothing unless they push NYA under 10805 and if they do, stocks will begin dropping in earnest again. 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 10:49 AM:  NYA drops to 10810. Each day is a new day of market drama. The 40-week MA is very important so price is coming down for a back kiss to show it respect and make a bounce or die decision. NYA 10812....... 

Note Added 10:54 AM: Big bounce. NYA 10827. Nothing to see here, move along, move along...

Note Added 1:51 PM:  NYA 10838. 

Note Added 3:04 PM: NYA drops to 10810 late in the session. Stocks are moving lower. The 40-week MA acts as a magnet. Time for another bounce or die decision. Will it bounce again?

Thursday, January 22, 2015

Keybot the Quant Turns Bullish

Keystone's trading algo, Keybot the Quant, flips to the bull side this afternoon at SPX 2054. The NYA Index exploded above 10805 sending equities on a rocket ride. The bulls will receive additional upside juice if XLF moves above 24.11 and/or the VIX drops under 15.85. More information is found at Keybot's site;

Keybot the Quant

Note Added 3:51 PM: A few minutes in front of the closing bell the SPX is at 2062. NYA is 10851 well above the 10805 line in the sand. XLF is 24.01 under the 24.11 in the bear camp causing market negativity. VIX is 16.58 above the 15.85 line in the sand in the bear camp. Bears need NYA 10805 or they got nothing. XLF and/or VIX need to turn bullish to keep the stock market moving higher. If all three parameters remain status quo, stocks will stagger sideways. One of those three parameters will flinch and tell you the market direction ahead.

Keystone's Morning Wake-Up 1/22/15; ECB Rate Decision and President Draghi Press Conference; ECB Announces 1.1 Trillion Euro Stimulus ($1.3 Trillion)

The global market movie reaches a climax over the next couple hours as the ECB decision and press conference is imminent. The ECB decision is 7:45 AM EST and more importantly, President Draghi provides details on the new QE stimulus program at 8:30 AM. Futures, European indexes, currencies and bonds will react.

At 7:20 AM, S&P futures are +3. Dow +32. Nasdaq slips negative. The spu's were up far higher a couple hours ago. DAX (Germany) is down a smidge -0.1%. FTSE (UK) is up +0.5%. CAC (France) is dead flat. Dollar/yen 117.57. Euro 1.1633. Oddly the euro is rising ahead of the announcement when a large QE money bazooka should smack the euro lower. Is the ECB move already priced in? Do insider traders already know the outcome? The pound climbs to 1.52. Gold 1283. Copper drops to 2.587. Traders ignore old-time market bellwethers like copper since the central bankers throw a money party every day directing traders to keep buying stocks.

US Treasury yields are; 2-year 0.52%. 5-year 1.38%, 10-year 1.91%, 30-year 2.51%.

One week ago the ECB said a 500 billion euro QE package would be provided. Then a couple days ago 550 billion euro’s were hinted. Yesterday, the ECB leaked a potential package of 50 billion euro’s per month for at least one year for a total QE package of 600 billion euro’s ($58 billion per month for a total of $700 billion US dollars). 

Traders are focused on the details that Draghi will provide at the 8:30 AM EST press conference especially the duration of the 50 billion euro ($58 billion) per month program since it determines the size of the total QE program providing shock and awe, or not. Traders are expecting a one trillion package which would extend the program into 2016; the 50 billion euro’s per month would run until August 2016. Draghi may surprise with a larger than 50 billion euro per month program. A 60 billion euro’s ($70 billion) per month QE would create a one trillion total by May 2016. So pay attention to the amount and duration of the new QE program.

What will sly ECB head Mario Draghi offer to the masses? He is a magician that always holds a surprise up his sleeve. A total package of one trillion or more euro’s is expected with the current consensus, based on leaked information for 50 billion euro's per month ($58 billion) that runs for one year either into early, or late, 2016, for a range of 600 billion to one trillion euro's ($700 billion to $1.1 trillion).

Keybot the Quant remains short but markets are a coin-flip due to the ECB. The algo is fixated on SOX 672.36 and NYA 10800. Bulls win big if NYA moves above 10800 and the Keybot the Quant algorithm will likely flip long. Bears win big if the SOX drops under 672.36 signaling market selling ahead. Semi's were weak in last evening's afterhours trading. If SOX remains above 672.36 and NYA stays under 10800 the stock market will stagger choppy sideways with a slight upward bias.

The fight at the 200 EMA on the SPX 30-minute chart at 2035.18 continues. Bulls win big for the hours and days ahead if the SPX moves above 2035 and higher. Bears win big for the hours and days ahead if the SPX remains under 2035 heading lower.

Keystone exited the VJET long trade yesterday. The stock received the positive divergence launch so profits were taken. Keystone will look to reenter today or in the days ahead since there should be more upside ahead.

Note Added 7:34 AM: S&P +5. Dow +46. Nasdaq +6. Euro 1.1635 rising. Gold 1284.

Note Added 7:40 AM: S&P +6. Dow +45. Nasdaq +7. Euro 1.1629. The DAX remains negative and FTSE and CAC positive. Gold 1284. US 10-year yield 1.93%. Yields are rising. German bund 0.57%. WTIC oil is 48.86 and Brent oil is back above 50 to 50.28. The ECB statement decision is a few minutes away......

Note Added 7:55 AM: The ECB leaves rates unchanged and says further announcements are on tap at 8:30 AM. The market reaction is muted with the US futures floating higher. S&P +8. Dow +61. Nasdaq +12. Euro drops to 1.626. Dollar/yen 117.54. Gold 1286. US 10-year yield 1.93%. German bund 0.57%.

Note Added 8:07 AM: S&P +11. Dow +90. Nasdaq +15. Euro 1.1628. Dollar/yen 117.61. US futures move higher with the lower euro and retreat if the euro moves higher. Gold 1291. US 10-year yield 1.92%. German 10-year yield 0.56%. DAX recovers to the flat line turning positive. Traders are excited ready for Draghi to fire the QE money bazooka.

Note Added 11:30 AM: The Keystone the Scribe site provides the details on the ECB QE program and the real-time impact on markets. Draghi announces a 60 billion euro per month program that lasts until September 2016 but he is quick to say the easy money will continue as long as the +2% inflating mandate is not met. Traders were unsure if the announcement was open-ended QE or not but the rise in stocks verify that more traders view the ECB QE similar to former Fed Chairman Bernanke's QE Infinity. The ECB QE is 60 billion euro's for 19 months for a total of $1.1 trillion ($70 billion per month for a total of $1.3 trillion). Draghi provides shock and awe exceeding the one trillion number although confusion remains over the true amount of the QE since the ECB is rolling prior programs into the new program. The Dow is up 134 points and the SPX gains 18 points. The bulls are running with the euro collapsing down to 1.1423. German bund yield drops to 0.451% on news of increased bond-buying coming in the months ahead (higher bond prices create lower yields). US 10-year yield 1.88%.

Note Added 11:33 AM: The SOX drops under the 672.32 key bull-bear level identified by the Keybot the Quant algo but then recovers. The NYA runs up to test the critical 10805 level and is rejected on the first try. NYA is currently printing 10782 and SOX is 675.53. Thus, SOX remains above the critical 672.32 and NYA remains under the critical 10805 so equities move sideways choppy with an upward bias. SPX is 2047. Bulls win big with NYA above 10805 and Keybot will likely flip long. Bears win big with SOX under 672.32. Europe ends in sea of green with the DAX gaining +1.4%, FTSE +1% and CAC +1.7%.

Note Added 3:42 PM: The NYA moves above 10805 this afternoon poking a stick in the bear's eye. Keybot the Quant algorithm flips long at SPX 2054. Note that the SPX also moved above the 200 EMA on the 30-minute chart at 2035 this morning forecasting bullishness ahead. The SPX also moves up though the 20 and 50-day MA cluster at 2046. The RUT moves above its 50-day MA at 1179 that would no longer hold as resistance after six days. Watch NYA 10805, XLF 24.11 and VIX 15.85 to determine market direction forward. The upside market orgy is in full swing. Caligula just arrived at the party pouring Fed wine and ECB whisky into golden goblets for bullish traders. All Hail the central bankers! The central bankers control the markets.