Tuesday, December 12, 2017

SPX S&P 500 2-Hour Chart

The SPX 2-hour chart has been dishing out drama over the last couple weeks. Price is news-driven lately with central banker dovishness continuing and the tax-cut talk is also maintaining buoyancy in stocks. Price recovers but not due to positive divergence. Traders know that equities are bullish about 80% of the time into the Fed meetings and keep front running this seasonality more and more over the last few months.

The maroon lines show the negative divergence spankdown off the top but note that the MACD line squeezes out a tiny higher high. The MACD tells you that the SPX will likely come back up after a pull back and this occurs with price now back up in the neighborhood of the highs from last week.

The red lines show negative divergence wanting a spankdown to occur. However, the RSI and MACD line continue moving higher trying to keep the upside party going for a couple or few more candlesticks. Watch the RSI to see if it takes out the prior high that occurred when price made its high early last week (purple circle). The top is in if the RSI does not move above the prior high in the purple circle. If the RSI sneaks out a higher high, it will take a couple more candlesticks (each candle is 2 hours of trading time) for price to set up with negative divergence and identify the top.

Even with Yellen professing dovishness on Wednesday afternoon (tomorrow), the top should be in at this 2660-2670 level but the FOMC drama will have to play out this week. 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 Daily Chart; Overbot; Negative Divergence Developing; Upper Band Violation

Here is an update of the S&P 500 daily chart from the weekend. The chart is setting up with negative divergence and the idea was to watch the MACD line to see if it could move higher and it did. The other indicators are neggie d (red lines) wanting a pullback but the MACD line moves higher, long and strong, wanting another higher high in price.

The central bankers are the market. Stocks typically rally into the FOMC rate decisions about 80% of the time so traders were in a rush to buy equities believing it will be all upside into the Fed decision Wednesday afternoon.

Putting the central banker intervention to the side, the chart set-up would typically create a jog move for a couple days dropping lower due to the neggie d, but then recovering for a higher high in price due to the MACD fuel. When price comes back up, if the MACD line negatively diverges, the top is in. So this would be say, down today then up tomorrow for the potential top. However, the central bankers always have their thumbs on the scale (with the pending rate decision) and stocks remain buoyant.

Price violated the upper standard deviation band requiring a move at least back to the middle band at 2613 and rising. With the long and strong MACD line, price wants another higher high so the upper band at 2669 remains on the table. The chart is topping out but the Federal Reserve is the wild card. If Yellen expresses dovishness on Wednesday, equities will pop higher. Taking the Fed out of the equation, stocks would be expected to slip today, then rally tomorrow placing a top with the MACD going neggie d. 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, December 11, 2017

NYA NYSE Composite 5-Minute Chart; NYA Flash Spikes +56% Above 19.7K then Flash Crashes to 12.7K

The NYA flash spikes +56% above 19.7K at the opening bell then about one hour later flash crashes retracing the move. This is how the saga played out today.

At 9:30 AM EST, a major flash spike occurs in the NYSE Composite. The NYA catapults higher from 12643.06 to 19763.65 a huge 7120.59 points, a +56.3% gain for a major index. Something is drastically wrong with the pricing and data feeds. Amazingly, Bloomberg, CNBC and Fox do not mention the blaring event. It is ridiculous that a major index would make such a move. The NYA price remains elevated above 19.7K. Internet business sites do not mention the wild move. What is going on? Perhaps the markets are subject to another flash crash event a la 5/6/2010.

At approximately 10:40 AM EST, the NYA flash crashes from the flash spike high at 19.65K down to 12.65K, a -36% crash. This is ridiculous behavior for a major stock index. The exchanges, business networks and internet are quiet about the event sweeping it under the rug before anyone notices. No doubt a fat finger or computer glitch will be blamed. This is extremely scary behavior and a serious omen that a major flash crash event may be on the come for the US stock market. NYA is at 12653 up 10 points on the day a marginal gain.

At 4 PM, the NYA finishes up 25 points, +0.2%, to 12668.21 a new all-time closing high. The NYSE Composite prints a wild spike high at 19763.65 a new all-time intraday high. The NYA flash spiked at the opening bell to 19764 a +56% gain and then flash crashed back down the same price amount about one hour after the opening bell. There is no information available behind the reason for the wild and scary behavior. 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: The Flash Crashes, Fat Fingers and Computer Glitches, Oh My! eBook by K E Stone is available from Amazon by clicking the link at the right. The eBook will be updated for the 2017 flash spikes and flash crashes and is slated for publication by Amazon in January.

NYXBT Bitcoin Weekly Chart

Bitcoin prices are all over the map and different exchanges report different prices. Bitcoin popped to near 20K on the Coinbase exchange last week and then retreated to 15K. As this is typed, bitcoin is up +16.666% to 17500.

The bitcoin saga begins in 2015. The standard deviation bands squeezed in tight (purple arrows) predicting big moves which happened to be higher. Tight bands do not predict direction only that a huge move is on tap. Bitcoin proceeds merrily along with higher highs and goes parabolic beginning March of this year.

Bitcoin price peaks in August with overbot RSI and stochastics, the bearish rising wedge pattern and negative divergence with the RSI, stochastics, ROC and Williams. This told you that bitcoin wants to pull back for a rest. The MACD line and histogram, however, remain long and strong in August so you knew that after a pull back bitcoin would move higher again for another high price and this occurs. Price drops to the September low and then takes off parabolically higher into the present day.

Price stabs up through the upper band so the middle band at 5872 and rising is on the table. There are so many gap-up moves on the chart it looks like Swiss cheese. Someday these gaps will be filled on the downside.

With the higher high in price, the indicators remain mixed. The RSI and stoch's remain overbot and prefer to see price taking a rest going forward. The RSI, however, ekes out a higher high providing more upside juice for further bitcoin highs. Ditto the MACD line and histogram both long and strong. Ditto the ROC. The overbot conditions want to see a pull back but bitcoin should head further higher after any stall move.

The ADX indicates that the price trend for bitcoin was off the charts higher in 2016 (purple box). The ADX prints an unbelievable 70 in June 2016 forecasting strength ahead for the cryptocurrency and the higher highs occur. Note, however, that bitcoin continues higher but the ADX is at 62.44 off the high at 70-ish 18 months ago. Thus, despite the parabolic spike higher in price, the trend higher in price is not as strong as in 2016. The trend is the strongest of this year, however.

If you are banking on bitcoin heading ever higher, watch the ADX since you will need it to surpass the elevated 70 level to prove the trend higher remains strong. The overbot conditions want to see price move lower in the near term but higher highs are expected going forward. Looking at the monthly bitcoin chart, the RSI, stochastics and Williams are overbot but the RSI is squeezing out a higher high, the MACD line is running vertical and the ADX trend is strong.

The monthly chart points to higher highs in bitcoin into the early new year. This does not mean parabolic moves continue. Price may simply idle sideways with an upward bias for several months forward.

The weekly chart hints at choppy trading ahead with fits and starts and bitcoin squeezing out new highs on the weekly basis but this may run out of gas over the next month or two. Bitcoin price would be expected to fall on this weekly basis say somewhere into the 6K to 10K range but then likely recover again to the current highs since the monthly chart is strong.

Keystone does not have a position in bitcoin. One trading idea is to simply let bitcoin burn itself out over the coming 2 to 6 weeks and buy that pullback when it occurs since the monthly chart remains strong. Bitcoin price is at 16657. 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.

Sunday, December 10, 2017

America's Fake News; A Layman's Guide to the Biased News Reporting in the United States

by K E Stone (Keystone the Scribe and The Keystone Speculator)

Non-biased news in America has gone the way of the penny loafer. Unbiased and impartial news reporting and journalism in the United States is as rare as hen’s teeth. Each news source you follow is slanting the news story towards either the Republican Party or Democrat Party manipulating American minds.

The US is a two-party crony capitalism system. This article explains the news bias in the US that must be considered when absorbing any information on the internet, radio or television.

The democrat-leaning news sources will always tout former President Obama, Hillary Clinton and progressive and liberal ideals as the greatest thing since sliced bread while denigrating republicans. At the same time, the republican-leaning news sources place President Trump on a pedestal praising every decision as genius. The republican media touts conservative ideals (even though most republicans no longer believe in fiscal conservatism as evidenced by the obscene Keynesian spending over the last nine years by both parties) while bashing democrats. America has become very ill and divided.

The cable news networks practice news sensationalism to attract eyeballs since advertising fees, the mother’s milk of profits, are dependent on viewership. The lip gloss beauties reading the teleprompters display long sexy legs that attract viewers. One pair of shiny legs is longer than the next pleasing the majority of male viewers. Roger Ailes, that ran the Fox News media empire for many years but had to resign in disgrace, then croaked, professed the mantra that “legs equal viewers.”

Botox is on full display at the news networks with talking heads sporting foreheads tighter than a garage band’s snare drum. The female news readers don beautiful custom-tailored dresses at over $500 a pop that highlight their attributes. A first-year marketing student will tell you that “sex sells.” The news networks manipulate minds into loyal democrats or republicans.

News is entertainment nowadays when it used to simply provide level-headed facts. All news is biased in America. News organizations do not even attempt to hide it anymore. The teleprompter readers comment at the end of each news story reinforcing the network’s bias. It is standard fare for anchors to praise, or denigrate, each news story depending on the networks bias.

President Trump calls out the ‘fake news’ from CNN, MSNBC, the broadcast networks (ABC, CBS, NBC), public television (NPR and PBS), New York Times, Washington Post (owned by Amazon CEO Jeff Bezos a democrat) and others on a daily basis highlighting the exaggerated negative bias. The democrat-leaning media is relentless in denigrating Trump and hopes he fails and is removed from office. America used to support the president no matter what party is in the Whitehouse but not anymore. The country has changed.

There are always two sides of the coin and President Trump conveniently ignores the fake news spewing daily from Fox News, Breitbart, Rush Limbaugh, Mark Levin and others that denigrate the democrats while praising republicans and the decisions made by the orange-headed leader of the Free World.

Interestingly, most Americans prefer the middle ground and are very disturbed at the direction the country over the last couple decades. Independent voters are on the rise as many US citizens are fed up and do not want to be associated with either party and the political baby games. Many Americans do not realize that they are actually libertarians in their thinking wanting fiscal responsibility concerning government budgets and tax policy and at the same time do not care what people do in the privacy of their own bedrooms.

But enough of this windbag front matter; all you want to know is what the media bias is in America and who are the major players so without further ado lets expose the nasty truth about the United States media.

You may decide on different percentages of bias after reviewing the lists below but the most educated guess is that about 70% of the news in America is biased towards democrat, liberal and progressive minds while 30% of the news is biased towards republican and conservative thinking.

Democrat, Liberal and Progressive (Left-Leaning) News Outlets, Groups and Organizations Represent About 70% of the US Media
ABC (broadcast television dominated by the left)
CBS (broadcast television)
NBC (broadcast television)
PBS (pubic television)
NPR (public television)
CNN (cable television news)
MSNBC (cable television news)
Bloomberg (cable business news)
Associated Press (AP)
New York Times
Washington Post
LA Times
San Francisco Chronicle
Boston Globe
USA Today
Huffington Post
Media Matters
Brookings Institute
The Economist
American Prospect
Reliable Sources (CNN)
Vox Media
Television Business
Movie Business
Music Business
Publishing Business
Pop Culture
Saturday Night Live (SNL) Comedy Show
Celebrities/The Aspen Elite
Silicon Valley
Colleges and College Professors
LBGTQ Community
Pro-Choice Advocates
Union workers and employees making minimum and low wages tend to favor the left.
The major US cities lean democratic including New York City, Boston, Washington, DC, Los Angeles, Seattle and Chicago. The states of Virginia, New York, California, Oregon and Washington are left-leaning.

Republican and Conservative (Right-Leaning) News Outlets, Groups and Organizations Represent About 30% of the US Media
Fox News (cable television news)
Rush Limbaugh (talk radio is dominated by the right)
Sean Hannity
Mark Levin
Glenn Beck/The Blaze
Laura Ingraham
Hugh Hewitt
Dennis Prager/Prager University
Mark Steyn
Drudge Report
Wall Street Journal (WSJ)
American Spectator
National Review
Washington Times
Daily Caller
Daily Wire
The Federalist
MediaBuzz (Fox News)
National Rifle Association (NRA)
US Chamber of Commerce
The Heritage Foundation
The Religious Right
Pro-Life Advocates
Country Music/Patriotic Anthems
Auto Racing/NASCAR (National Association for Stock Car Auto-Racing)
Upper-middle class professional employees such as attorneys, doctors, engineers and accountants, and high-wage earners, tend to favor the right.
The Midwest and Rust-Belt cities, the Heartland (the center of the United States often referred to as the ‘fly-over country’), lean republican.

Assessing the news bias above yields 70% of media in the democrat camp and the other 30% in the republican camp. America is no longer united and instead has become tribal. Both the republican and democrat ‘tribes’ place their party ahead of what is actually good for the United States. This sad new face of America spells trouble for the United States going forward. Tribal allegiance rules the day.

President Obama had a free ride during his eight years in office since 70% of the media was always on his side praising his decisions and covering up any mistakes. On the other side of the ledger, for example, republican presidential candidate Mitt Romney was ridiculed daily by the liberal press during the 2012 presidential race; he never had a chance. It is like playing a football game where the referees are paid off helping one team win. Republicans are at a disadvantage since the news coverage is weighted towards the democrats.

President Obama was the first media selected and elected president in America’s history. Obama never cared much about what he said off the cuff since if he did misspeak, the liberal press would always protect him.

President Trump has a tougher row to hoe since only 30% of the media is supportive to his agenda while the other 70% denigrates the president every 10 minutes. Like it or not, many Americans must accept Trump as president and give him a chance for the sake of the country. President Trump won the election fair and square.

Many Americans receive their daily news from the broadcast television stations such as ABC, CBS and NBC which slant the news in favor of democrats while representing republicans in a bad light. The democrats hold the advantage in the media bias game.

This article changes the way you view the media and news outlets. Monitor the news sources listed above and the bias will smack you squarely in the face. As long as you know how the game is played, you can filter the news and not become a puppet of the establishment republicans and democrats that attempt to control your mind daily.

Use the above knowledge to filter out the news bias. Before consuming any news, first read the byline or reference the lists above to determine which news organization is peddling the left or right-leaning propaganda. Think objectively and independently. A smart American declares a pox on both the republican and democrat houses.

SPX S&P 500 Daily Chart; Overbot; Negative Divergence; Upper Band Violation; Powell Rally

The day before the Powell Rally, the maroon lines show universal negative divergence in play with overbot RSI and stochastics and a rising wedge pattern all portending downside. As Keystone always states, however, in these manipulated markets, the only thing that can nullify the chart and create more upside is central banker joy. Jerome Powell, the next Federal Reserve chairman that will take over from Chair Yellen, appeared for his confirmation hearing in front of the Senate Banking Committee on 11/28/17 and hit the ball out of the park. Stocks became orgasmic celebrating the new Fed head. He had all the right answers and plans to continue Yellen's dovishness.

The tax-cut bill continues making progress through Congress creating further upside so the chart has to adjust for these joyous real-time events.The red line shows the higher high in price on Monday morning, 12/4/17, but the red candlestick shows that price collapsed as the day played out; it was a bull trap.

With the new all-time high for the S&P 500 at 2665.19 on 12/4/17, the indicators are negatively diverged. The MACD line is neggie d over the last two months but note the short green line that was trying to create a higher high. This little bit of juice remaining in the MACD helps create the Thursday and Friday recovery in price.

The expectation is for the SPX to roll over in this daily time frame. The thin red lines in the right margin show how the indicators are sloping negatively after the all-time high, however, this is not negative divergence since price did not make a new high on Friday. The key is that thin red line for the MACD. As long as the MACD remains below that thin red line, stocks should roll over to the downside. If stocks rally, it does not matter, they will roll over. But if price floats higher and the MACD moves higher, that will extend the upside for a day or few.

Price has violated the upper band so the middle band at 2609, and rising, is on the table. If price floats higher to begin the week, the 2662-2663 upper band is the likely target and if price prints there check the MACD line as described above to see if it negatively diverges or if it makes a higher high.

The CPC and CPCE put/calls printed the uber lows 9 days ago so the expectation was for a pullback in stocks. Instead, the powerful Powell Rally and tax-cut bill joy jam the chart higher. A pull back occurs of about one-half the gains but the SPX rallies again last week on Thursday and Friday. The CPC is up to 0.94 and the CPCE is at 0.60. A selloff remains on the table for equities until a tradeable bottom occurs when the CPC prints above 1.20 and the CPC prints above 0.80. Thus, mixing the above analysis together, forecasts a pull back on tap going forward.

The central bankers are always in play ready to goose stocks higher especially by crushing volatility. Global central bankers collude daily to depress the VIX and guarantee an ever-rising stock market. The FOMC 2-day meeting is Tuesday and Wednesday and stocks are usually bullish into the Fed events. This week is OpEx with Quadruple Witching on tap on Friday. For OpEx week each month, a Tuesday low typically leads to a Wednesday high so the bulls have seasonality factors on their side especially from Tuesday into Wednesday.

Mixing the seasonality stuff into the analysis above, stocks may dip to begin the week into a Tuesday low then rally into Yellen's press conference on hump day. The expectation is for lower prices ahead but the central bankers are extremely powerful and Wednesday afternoon will have to play out. The central bankers are the market. 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 4:24 AM EST on Tuesday Morning, 12/12/17: As you saw at the opening bell on Monday morning, the MACD line squeezes out a higher high so the bulls ran stocks higher in the Monday session. Equities typically rally into the Fed decisions and traders are front-running this seasonality factor. If you bring up the SPX daily chart, note that the RSI, histogram stochastics and money flow remain negatively diverged wanting the S&P 500 to sell off, but the MACD line wants another higher high in price. If the Fed was not on tap this week, this would typically create a couple day jog pattern, down one day, then back up to satisfy the MACD. If at that higher high with price the MACD line goes neggie d, then the top is in. If the MACD line continues higher, or if one of the other parameters move higher, the bulls will keep extending the upside. The stock market is likely creating drama into the Fed decision and Chair Yellen press conference on Wednesday afternoon.

RTH Retail ETF Daily Chart; Mother of All Short-Squeezes

The RTH retail ETF (exchange-traded fund) rocket launches into a parabolic price move over the last month (22 trading days). RTH jumps from 81.60 to 90.82 a huge +11.3%. Everybody and his brother was short the retail stocks and once the sector caught a bid, and short-sellers began covering, the move went parabolic with the shorts running for their lives. The short-covering creates the rocket fuel sending price into the stratosphere; the mother of all short squeezes. The RTH is rallying a half-percent per day every trading day over the last month.

There are 10 major retailers in the RTH ETF including AMZN, HD, WMT, COST, LOW, SYY, TGT, ROST, TJX and CVS. Amazon's big jump higher over the last month creates much of the upside joy in RTH. Investors started shorting retail stocks heavily this year and Joe Schmo jumped into the game as well; all have received their heads on a platter.

Note the tight standard deviation bands in early November (purple arrows) that forecasted a big move on tap. Tight bands, however, do not predict direction only that a huge move is about to occur one way or the other. This one was obviously up. Consider how surprising that was since market participants were all on the short side of the boat. Once the upside move started it accelerated since shorts had no choice but to cover (buy stock to cover the short position and exit the trade).

Price has violated the upper band so the middle band at 86.78, and rising, is on the table. The red lines show negative divergence for the indicators as RTH prints new highs except for the MACD line that remains long and strong. The RSI and stochastics are overbot wanting to see a pullback. The rising red wedge is a bearish pattern.

RTH will likely weaken for a day or two but the long and strong MACD line will probably create another high. At that time, the MACD will likely go neggie d along with the other indicators and the top will be in on the daily time frame. 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.

PLAT Platinum Weekly Chart; Platinum at 2-Year Low

Precious metals pull back last week as the US dollar index rises above 94 now at 93.90. Platinum collapses -6.1% to 883 at levels not seen since February 2016. Platinum is one of the least reactive metals and is corrosion resistant making it an ideal choice for catalytic converters for cars, buses and trucks. The ladies love the platinum jewelry as well.

If 'Peak Auto' is occurring, platinum will be hit and it does drop more than gold and silver last week, that dropped -2.6% and -3.5%, respectively, hinting that part of the platinum drop is due to projected weakness ahead in the car industry. The automobile and housing industries are the two key drivers of economic strength. 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.

INDU Dow Jones Industrials 5-Minute Chart; DOW PRINTS ABOVE 24,000 FOR FIRST TIME IN HISTORY

On Thursday, 11/30/17, on the last day of November, the Dow Jones Industrials, INDU or DJI, print above 24,000 for the first time in history. The world is awash in never-ending global central banker liquidity pumping all asset classes continually higher. The central bankers are the market. 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.

Keybot the Quant is Short but the Stock Market Remains a Coin Flip

Keystone's proprietary trading algorithm, Keybot the Quant, is on the short side but the stock market remains in a choppy sideways trend. The bulls will regain control in the stock market if the semiconductors, SOX, move above 1254. Bears will send stocks sharply lower if the VIX  moves above 10.76. One of these two parameters will flinch and dictate stock market direction forward.

As always, more information is found at Keybot's site;

Keybot the Quant