Tuesday, June 28, 2016

SPX (S&P 500) Monthly Chart 12 MA Cross Battle Between Bulls and Bears for Cyclical Market Control

One of Keystone's key cyclical market signals triggered yesterday. The SPX drops under the critical 12-month MA at 2027 signaling a cyclical (weeks and months) bear market ahead. When this failed yesterday, a trap door opened to send the SPX sub 2K. Of course, as the chart displays, the battle continues and the bulls are trying to regain their cyclical glory. For now, the bears are in charge of the path ahead through the summer but the fight for the 12-mth MA is ongoing. The 10-mth MA is another key level used by old-timer's and programmed into many algo's. The 10-mth MA is at 2024. Bears are happy to see the 10 MA under the 12 MA albeit marginally. Bulls need to see the 10 cross above the 12 to point to higher prices ahead.

The 200-day MA is 2021 and the 50-week MA is 2021. Do you think the 2021-2027 cluster is key? Obviously, it is uber importante.  Bulls win big above 2027. Bears win big below 2021. Both sides suffer bloody noses between 2021-2027 as they battle for all the marbles determining the direction for stocks for the months ahead.

The chart is bear-friendly with price stalled at the top and indicators weakening (negative divergence). The indicators, however, are staggering sideways and as evidenced by today's rally, the central bankers are powerful and can rally markets at will. The RSI did not want to slip into bear territory under 50% so watch that as a key indicator for the months ahead. Also the MACD cross remains bearish; watch that closely.

The brown circles show distribution taking place. Each time that stocks rallied for the month, the following month the dumb retail money including Ma and Pa Kettle, Aunt Edna and Joe Sixpack, would rush in to buy the hype thinking that they are very smart. The institutions and hedge funds distribute shares to these suckers as reflected by the higher volumes. Rinse and repeat. After the last couple years, many retail investors are heavily exposed to the long side in stocks and comically very proud of the bag they are holding; they hope that the stocks will regain the levels where the long trades were entered. Hope is not a strategy. Any investor or trader hoping and praying for a stock market rally better see SPX above 2027, otherwise, you are toast.

The monthly charts receive new numbers on Thursday for EOM. The SPX started June at 2097 so the month may finish negative. Anything can happen, however, over the next three days. Watch the 12-month MA; this major cyclical signal tells you the market direction ahead for the intermediate term; currently bearish but only by a few dollars. The SPX is at 2021 at 10:40 AM EST Tuesday morning, 6/28/16. The battle continues. 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 10:58 AM EST: The SPX prints 2020. Are the bears planning to flex their muscles lower, or are they only teasing a failure of the critical moving average cluster at 2021-2027? Bulls need to push price higher immediately or they are going to fall down the basement steps.

Saturday, June 25, 2016

Keybot the Quant Turns Bearish

Keystone's trading algo, Keybot the Quant, flips back to the bear side at SPX 2054. The last trade takes a haircut since markets crashed after the Brexit vote. Copper and semiconductors are key next week. The pivot up or down of JJC from 24.11 on Monday morning will likely dictate stock market direction. More informatinon is found on Keybot's site;

Keybot the Quant

Thursday, June 23, 2016

SKEW Index Weekly Chart

The SKEW is venturing to levels where prior market highs were identified. The SKEW is a useful intermediate-term tool. The red circles show stock market highs and the green circles are stock market bottoms. Looking at the red circles at or above the red line, the selloffs were 60 SPX points, 125 points, 80 points and 220 points. The average is a 121 point loss in the S&P 500. Throwing out the largest and smallest is an average of a 102 point drop in the SPX. 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.

Wednesday, June 22, 2016

VIX Volatility Daily Chart Battle at the 200 MA

The VIX 200-day MA is a key short term market signal where bulls are the winner below and bears win above. The 200-day MA is at 18.13 and the VIX launched to 21.17 in today's trade favoring the market bears going forward. However, the Brexit vote is tomorrow and volatility may react violently over the next couple days, so all bets are off until the Brexit result is known. Bears rule above 18.13. Bulls rule under 18.13.

The Keybot the Quant trading algorithm is long currently and tracking VIX 16.40 (purple line). The stock market will move strongly higher if the VIX drops under 16.40. If stocks rally strongly but the VIX does not move under 18.13, stocks will roll back over to the downside. If the rally continues and the VIX keeps moving lower, market bears are okay as long as they do not allow 16.40 to fail. Under 16.40 and the bears are toast. Above 18.13 and bulls are toast. 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 9:57 AM EST on Thursday morning, 6/23/16: Another wild day is on tap. The bears are slapped in the face with a bull rally after the opening bell. The VIX drops to 17.73 well under the 200-day MA at 18.10 so the bulls rule. But if you blinked, you missed the quick spike higher as traders seek downside protection. The VIX jumps to 18.50 back above the 200-day at 18.10 so stocks retreat off the highs. Market bears are fine as long as they keep the VIX above 18.10. Current VIX print is 18.27. The battle continues.

Note Added 11:14 AM EST on Thursday morning, 6/23/16: The VIX drops under 18.10 to 18.04. The bulls slap the bears in the face. Slap, slap. The VIX continues lower under 18 to 17.96 so stocks float higher. The battle at the 200-day MA will likely continue through tomorrow when the Brexit vote outcome is known.

Tuesday, June 21, 2016

Keybot the Quant Turns Bullish

Keystone's trading algo, Keybot the Quant, flips long yesterday at SPX 2098. The algo, however, already wants to whipsaw back to the short side. Markets are erratic and unstable ahead of the Brexit referendum vote on Thursday. Watch RTH 76.06 and XLF 22.93 to gauge the strength of any stock market rally. As always, more information is found at Keybot's site;

Keybot the Quant

Monday, June 13, 2016

Keybot the Quant Turns Bearish

Keystone's proprietary trading algorithm, Keybot the Quant, flips to the bear side today at about 3 in the afternoon at SPX 2084. Weakness in the financials and higher volatility created the push lower in stocks. Market bears need RTH under 76.14 (now at 76.18) and another leg lower will occur for the stock market. Market bulls need XLF above 23.12 (now at 23.00) to stop the market selling and create stability and begin a relief rally. Watch the banks and retail stocks; one of them will flinch and provide the market direction answer ahead. As always, more information is found at Keybot's site;

Keybot the Quant

Sunday, June 12, 2016

SPX (S&P 500) 60-Minute Chart 200 EMA Cross

Just as the 2-hour chart was highlighting a couple days ago, the one-hour chart above formed negative divergence (red lines), along with a rising wedge pattern and overbot stochastics, which created the spank down off the top. Price is in a downward-sloping channel testing the top trend line as the new week of trading begins. A Tweezer Bottom occurs during the last two candlesticks, however, the MACD line is weak and bleak wanting to see another low in price. The RSI is not yet oversold either so the door is open for more downside in price. The oversold stochastics helped to bounce price into the closing bell during the last 45 minutes late Friday.

One of Keystone's key short-term trading signals is the 200 EMA on the 60-minute now at 2084. Price is above signaling bullish markets for the hours and days ahead, however, note that price is coming down and as mentioned probably wants to test the critical 200 EMA for a bounce or die decision. Note how important this level is when price was rallying higher one month ago. The SPX tapped twice on the 200 EMA bumping its head against this ceiling but could not move above and then on the third try, whammo, punches up through the 200 EMA and catapults stocks to more highs (green circle). The same thing can happen in reverse if the 2084 fails so watch it like a hawk this week since it dictates stock market direction. 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 Monday, 6/13/16, at 10:18 AM EST: The US stock market is open less than one  hour and trading relatively flat after an initial dip. LOD 2088. The SPX has not threatened the 200 EMA on the 60-minute now at 2084.18. Also watch the VIX 200-day MA at 18.39. VIX is at 18.30 a hair on the bull side. Stock market trouble will occur if VIX moves above 18.39. Market bulls are fine if VIX remains under 18.39. Watch it closely. If VIX moves higher into bear territory above 18.39, stocks will be dropping, so then watch for the potential test of the 200 EMA at 2084.

Note Added on 6/13/16 at 10:23 AM EST: SPX 2095. VIX 18.27. The VIX 18.39 level tells you everything you need to know to begin the new week of trading.

Note Added on 6/13/16 at 8:17 PM EST: The VIX catapulted higher well above 18.39 so you knew the fix was in to reward the bears. The SPX moved lower to test the important 200 EMA at 2084.26 and failed creating market mayhem. Watch 2084 since price may come back up for a back kiss and bounce or die decision. Market bulls can redeem themselves if they move SPX back above 2084. The bears will create more and more stock market carnage each day the SPX is under 2084.

SPX (S&P 500) Support, Resistance (S/R), Moving Averages and Other Important Levels for Trading the Week of 6/13/16

SPX (S&P 500) support, resistance (S/R), moving averages and other important levels are provided for the trading week of 6/13/16. Levels shown in bold are strong resistance and support. Bold and underlined levels are very strong and important S/R.

For 2016, the intraday high for this year is 2120.55 on 6/8/16 and the closing high for this year is 2119.12 on 6/8/16. The intraday low for this year is 1810.10 on 2/11/16 and the closing low thus far this year is 1829.08 on 2/11/16. The intraday low in 2015 was 1867.01 on 8/24/15 and intrayear closing low for 2015 was 1867.61 on 8/25/15. Obviously, a failure under the 1810-1868 zone would lead to a catastrophic path ahead for stocks.

The SPX has exploded higher for nearly four months off the February low. Pay close attention to the 2110-2123 resistance zone; this would be the last chance area for bears to stop the stock market from marching towards new all-time highs above 2135 heading towards 2150.

The VIX remains under the 200-day MA at 18.45 so the bears are not too worried about the market pull back last Friday. However, the Keybot the Quant algorithm, Keystone’s proprietary trading algo, identifies VIX 16.58 as a key bull-bear level and the VIX is above at 17.03 creating market bearishness. If VIX falls under 16.58, the market bulls are fine and the upside in equities will resume. If VIX moves above 18.45, stock market carnage begins.

This week is OpEx Quadruple Witching on Friday. During OpEx weeks, stocks are typically positive from a Tuesday low to a Wednesday high. The critical FOMC rate decision is on Wednesday afternoon, 6/15/16, and will create market volatility. Equities are typically bullish moving into a Fed meeting; this jives with the OpEx seasonality. Thus, if the week is calm without major news events the background current of the market would create buoyancy from a Tuesday low into the Fed decision Wednesday afternoon.

The SPX is above the 200 EMA on the 1-hour chart at 2084 which signals bullishness for the hours and days ahead, however, price is moving lower as last week ended. If SPX fails at 2084, stocks will be falling rapidly down the rabbit hole. The SPX begins June at 2096.95 and the trading week starts at 2096.07 dead flat on the month thus far. The SPX is 52 points above the starting year number at 2044; the S&P 500 is up +2.5% on the year.

For Monday, 6/13/16, the bulls need to push above 2110 to accelerate the upside. The bears need to push under 2090 to accelerate the downside. A move through 2091-2109 is sideways action for Monday.

If the SPX pushes up through 2110, price will run higher to 2118 very quickly for a key test of this very strong resistance level. A move above 2118 and price will be at 2121-2123 in an instant and this would be the last chance for bears to prevent new all-time highs. If the SPX moves above 2123, then a move above 2135 will be very likely.

If the bears push under the strong 2089-2091 support, price will drop for a critical test of the 2083-2084 support and if this fails, stocks are in major trouble. That 200 EMA on the 60-minute at 2084 is a very important level which signals bullishness now with price at 2096 but will signal very bad things ahead if it fails.

Looking at the near-term picture the strongest price support/resistance is 2135, 2131, 2129, 2126, 2121-2123, 2118, 2110, 2102, 2094, 2091, 2089, 2083, 2081, 2079, 2074, 2072, 2067, 2061, 2057, 2046, 2042, 2032, 2022, 2019, 2011, 2002, 1997, 1993 and 1985-1988.

Note: If the list below displays any blank spaces, view it in a different browser.

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)
2129
2128 (7/20/15 Closing High: 2128.28)
2126 (4/27/15 Intraday High: 2125.92)
2124 (6/23/15 Closing High: 2124.20)
2123
2121 (4/24/15 Intraday High: 2120.92) (6/8/16 Intraday High for 2016: 2120.55)
2120.55 Previous Week’s High
2120 (2/25/15 Intraday High: 2119.59)
2119 (6/8/16 Closing High for 2016: 2119.12)
2118 (4/24/15 Closing High: 2117.69)
2117 (3/2/15 Closing High: 2117.39)
2116 (11/3/15 Intraday High: 2116.48)
2114
2113
2111
2110 (11/3/15 Closing High; 2109.79)
2109.57 Friday HOD
2109
2108
2105
2104 (12/2/15 Intraday High: 2104.27)
2103 (12/2/15 Closing High: 2102.63)
2102
2100
2099
2097
2096.95 June Begins Here
2096.07 Friday Close – Monday Starts Here
2094 (12/29/14 Intraday High: 2093.55)
2093
2092
2091 (12/29/14 Closing High: 2090.57)
2089.96 Friday LOD
2089.96 Previous Week’s Low
2089
2086
2084
2083.99 (200 EMA on 60-Minute Chart a Keystone Market Turn Signal)
2083
2082.86 (20-day MA)
2081
2080
2079 (12/5/14 Intraday High: 2079.47)
2077
2076.37 (50-day MA)
2076 (11/28/14 Intraday High: 2075.76)
2075 (12/5/14 Closing High: 2075.37)
2074
2073 (11/26/14 Closing High: 2072.83)
2072
2071 (11/21/14 Intraday High: 2071.46)
2069
2067
2065
2064
2063
2061
2057
2056 (11/18/14 Intraday High: 2056.08)
2053
2052
2050
2047.01 (20-month MA)
2046 (11/13/14 Intraday High: 2046.18)
2044 (12/31/15 Closing High: 2043.94)
2043.94 Trading for 2016 Begins Here
2042
2040
2038
2034
2033.17 (100-week MA)
2032.53 (12-month MA; a Keystone Cyclical Signal) (the cliff)
2032
2031.43 (10-month MA)
2030
2024.20 (50-week MA)
2023.35 (20-week MA)
2023
2022.20 (150-day MA; the Slope is a Keystone Cyclical Signal)
2022
2019 (9/19/14 Intraday High: 2019.26)
2017
2015.23 (100-day MA)
2014.56 (200-day MA)
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)
2002
1998
1997
1995
1993 (1/15/15 Closing Low: 1992.67)
1991 (7/24/14 Intraday Top: 1991.39)
1988 (7/24/14 Closing High: 1987.98)
1987
1986 (7/3/14 Intraday Top: 1985.59)
1985 (7/3/14 Closing High: 1985.44)
1983
1982
1981 (2/2/15 Intraday Low: 1980.90)
1980
1979
1978
1977
1973
1970
1969
1968 (6/24/14 Intraday Top: 1968.17)
1965
1964
1963 (6/20/14 Closing High: 1962.87)
1961
1959.92 (150-week MA)
1958
1956 (6/9/14 Intraday Top: 1955.55)
1951 (6/9/14 Closing High: 1951.27)
1949
1948
1943
1942
1937
1936
1931
1928
1924 (5/30/14 Intraday Top: 1924.03) (5/13/14 Closing High: 1923.57)
1920
1917
1914
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)
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
1879
1878 (3/7/14 Closing High: 1878.04)
1877
1874
1873
1872
1870
1868 (8/25/15 Closing Low: 1867.61)
1867 (8/24/15 Intraday Low: 1867.01)
1865
1862
1859 (1/20/16 Closing Low: 1859.33)
1855
1851 (1/15/14 Intraday Top: 1850.84)
1849 (12/31/13 Intraday High Top for 2013: 1849.44)
1848.98 (200-week MA)
1848 (1/15/14 Closing High: 1848.38) (12/31/13 Closing High for 2013: 1848.36)
1846
1845
1843
1841
1840
1839
1835
1831
1829 (2/11/16 Closing Low for 2016: 1829.08)
1828
1827
1824
1822.56 (50-month MA)
1820
1816
1814 (11/29/13 Intraday Top: 1813.55)
1812 (12/9/13 Intraday Top: 1811.52) (1/20/16 Intraday Low: 1812.29)
1810 (2/11/16 Intraday Low for 2016: 1810.10)
1809 (12/9/13 Closing Top: 1808.37)
1808
1807 (11/27/13 Closing Top: 1807.23)
1806
1803
1801
1800
1799 (11/18/13 Intraday Top: 1798.82)
1798 (11/15/13 Closing Top: 1798.18)
1796
1793
1791

1788

Saturday, June 11, 2016

TNX 10-Year Treasury Note Yield Lowest Close at 1.64% Since December 2012

The 10-year yield continues lower to 1.63% ending the week at 1.64% at a new record low going back to December 2012 (brown line). The intraday low yield this year is 1.56% in February so that level deserves respect. Yields will tumble lower if 1.56% fails. Lower yields maintain the ongoing deflationary vibe.

The neon blue lines show the downward-sloping channel in play with price at a lower trend line. Price has also violated the lower standard deviation band so the middle band at 1.81% and falling is in play. The indicators clearly show universal positive divergence over the last five months with an oversold Williams down at -97% (this indicator is overextended to the downside so yields should pop).

The yields appear too risky to trade right now. The TNX daily chart is setting up with positive divergence but the near term (hours and a couple days) are hinting at lower lows in yield. The 10-year yield may base this week in the near-term and provide a trade for higher yields, so an ETF like TBT would be in play for a long trade, or short the TLT. Keystone has no trade in these ETF's and probably will not play in this arena. Speculators may consider a TBT long trade, however, say beginning some time this week. It can be scaled into as yield searches for a temporary bottom in the near-term. If  you enjoyed gains in TLT over the last few months, it would be prudent to begin scaling out. Take the profits and sip some lemonade while lounging in the hammock out back.

Caution is required since sometimes charts can quickly breakdown from oversold conditions rather than bounce. These events occur during dramatic market upheavals so respect has to be maintained for further downside in yields. The monthly TNX chart hints that the 1.45%-1.65% area is where yield will base during the summer and then recover. Yields will probably head dead flat sideways for many months to come perhaps well into 2017.

The expectation is for yields to perhaps base this coming week, then move higher over the next few weeks (lower note and bond prices higher yields) say into July and August, then roll over to the downside say August-October, and that would be the long-term base for yields, say in the 1.45%-1.65% area, and then yields move sideways to sideways higher for the foreseeable future emphasizing sideways. 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 Tanks on UK Poll Indicating Brexit is Favored

On Friday afternoon, 6/10/16, at 1:25 PM EST (6:25 PM London; 7:25 PM Frankfurt), with stocks already trolling near the day's lows, an ORB International poll in the UK indicates 55% in favor of the Brexit (Britain exiting the European Union) while only 45% in favor of the Bremain (Britain remaining in the EU). The majority of Brit’s want to exit the European Union despite all the jawboning and fear-mongering by political leaders. US stocks collapse when the news hit the wires (red circle). European trading is closed for the week and unable to react to the poll until Monday.

If the Brexit vote wins, other nations will want to leave the EU, and Europe will become more disjointed rather than united. However, no one can blame Britain for wanting to reclaim its sovereignty. Once you join committees and organizations, you are choosing to sail with that ship of fools. Nonetheless, a Brexit will likely create harm to European and international economies and markets. The bookies are always more accurate and they continue to give a slight edge to the Bremain voters.

At 1:31 PM, stocks continue the retreating. The S&P 500 is down 17 points, -0.8%, to 2098. The Dow is down 104 points at 17881 the 18K level now a memory. The Nasdaq is down 52 points and the Russell 2000 down 14 points. VIX 16.31. The bund printed at a record low 0.019% a whisker from negative rates as global investors lose confidence in the central banks and seek safe havens. If confidence in central bankers is lost, all will be lost.

Telecom, consumer staples and utility stocks lead higher each perceived as a safe defensive play that receives a dividend. Investors hiding out in these tickers will likely have their heads handed to them if the stock market turns south. Normal expected business and economic cycles no longer apply due to the nearly-eight years of obscene Keynesian money printing by central bankers. New bubbles exist across nearly all asset classes due to the market distortions created by the central bankers. Consumer discretionary, financials and energy stocks lead lower. BAC -2.8%. C -2.9%. ZION -2.8%. RF -2.5%.

At 2 PM, stocks are sliding down the rabbit hole. The SPX is down 23 points, -1.1%, to 2092 under the 2.1K level. The Dow is down 162 points, -0.9%, to 17822. The Nasdaq loses 67 points, -1.4%, to 4891 under the 4.9K level. RUT -1.5%. TRAN -1.7%. VIX 16.86.
Euro 1.1254. Dollar/yen 106.76. Pound 1.4242. USD 94.58. WTIC 49.22. Brent 50.69. Gold 1277. Silver 17.35. Copper 2.0275.

At 2:20 PM EST with about 90 minutes of trading remaining in the day and week, the SPX is at 2090 falling 10 handles since the Brexit poll data hit the wires less than one hour ago. VIX 17.12. Stocks stumble around at the lows and then recover into the closing bell. How will the FTSE and other European stock indexes react Monday morning? 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.