Tuesday, January 24, 2017

USD US Dollar Index Weekly Chart; Sideways Channel

Keystone highlighted the US dollar index chart a few days after Christmas identifying  the negative divergence (red lines) at play. The majority consensus were calling for a huge move higher in the dollar index from 104. The bullishness on the dollar was rampant. The market consensus was wrong, as is usually the case, and the neggie d spanks price lower over the last month as forecasted. Traders rushed in to buy the USD at 104 expecting huge upside instead they have lost -4% of their money over the last month. If they would have simply noted the negative divergence they would have never made that bullish dollar trade.

The dollar is back kissing the top rail of that blue long-term sideways channel. The dollar will bounce or die from this level on the weekly basis. The indicators are weak and bleak wanting lower lows for the dollar after any bounce occurs in the weekly time frame. The MACD cross turns negative. Price has to decide if it wants to return inside the safety of the sideways channel, or, if a new sideways range is in play above one hundo.

The ADX is in the cellar which  verifies that the upward trend in the USD was not a strong trend. The tight standard deviation bands squeezed out the big upside move from October (pink arrows). The upper band was violated so the middle band at 99.61, also the 20-week MA, is in play and overnight, the USD prints a 99-handle exploring this level. A firm touch of the middle band should occur. The dollar weakened overnight from 1/23/17 into 1/24/17 due to President Trump's pick for Treasury Secretary, Steven Mnuchin, an ex Goldman Sachs man, stating in a written statement that he thought the 'dollar was excessively priced in the near term'.

Price may bounce off the trend line support now and seek 101.80-ish in this near-term but the expectation would be for a further sideways to sideways lower move for the dollar going forward. The sideways channel at 97.3-ish through 100.0 may be the destination for the dollar basket for the weeks and months ahead. Also, the 97.3-101.8 may prove to be the preferred path ahead for the dollar into spring and summer. 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 60-Minute Chart; 200 EMA Cross; Sideways Channel

The new year begins with stocks trading through sideways slop. The 200 EMA cross on the SPX 60-minute chart is a useful short-term market indicator. The SPX price is above the 200 EMA forecasting bullish markets for the hours and days ahead. Note how the SPX price tested the 200 EMA support to begin the year. This was the bear's big chance to send the stock market lower but instead price bounced. The bulls punched the bears in the face to welcome in the new year.

Market bears need to sink the SPX price under 2255 to signal the all-clear for downside market carnage. Bulls simply need to maintain the S&P 500 above 2255 and they will be fine going forward.


To begin the year, price gapped higher (brown circle) and sat on an island above 2262. An island reversal would have occurred if price would have dropped back down through the gap from 2262 to 2257, however, instead, price simply leaked lower to fill the gap seven days ago. All the gaps are buttoned up on top but look at that juicy gap down below at 2240-2246; it is big enough to drive a truck through it. This gap will need filled at some point forward.


The sideways channel is in play. Bulls win big above 2276-2278. Bears win big under 2257-2262. The sideways choppy slop continues through 2262-2276.


The 8/34 MA cross on the SPX 30-minute chart, a competing short-term market direction indicator, is bearish while the 200 EMA cross on the 60-minute chart above is bullish. One of them is wrong so watch these crosses closely to confirm the stock market direction ahead. 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 30-Minute Chart; 8/34 MA Cross; Sideways Channel

The new year begins with stocks trading through sideways slop. The 8/34 MA cross on the SPX 30-minute chart is a useful short-term market indicator. The 8 is under the 34 forecasting bearish markets for the hours ahead, however, the 8 MA is now curled upwards and the 34 is sloping downwards so a potential positive cross may occur today. Market bears need to sink the SPX price under 2263 immediately to prevent the 8/34 positive cross from occurring. S&P futures are down 1 point about three hours before the opening bell for the Tuesday session.

The sideways channel is in play. There are seven crosses with the 8/34 MA's over the last nine days which verifies the sideways choppiness in markets which chews-up both bulls and bears alike. Price will eventually make a decision. Bulls win big above 2275-2277. Bears win big under 2257-2259. The sideways slop and chop continues through 2259-2275.

The 200 EMA cross on the 60-minute chart, a competing short-term market direction indicator, is bullish while the 8/34 MA cross on the SPX 30-minute chart above is bearish. One of them is wrong so watch these crosses closely to confirm the stock market direction ahead.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, January 23, 2017

Keybot the Quant Turns Bearish

Keystone's trading algorithm, Keybot the Quant, flips to the short side this morning at SPX 2263. Watch RTH 76.64 like a hawk at tomorrow's bell. As always, more information is found at Keybot's site;

Keybot the Quant

Flash Crashes, Fat Fingers and Computer Glitches, Oh My! Now Available from Amazon

Flash Crashes, FatFingers and Computer Glitches, Oh My! summarizes the major system outages in global stock, bond, currency and futures markets since the infamous 5/6/10 Flash Crash. The flash crash events are chronicled in real-time as they occur and provide information not found elsewhere on the internet or in print.

Flash crashes and flash spikes are occurring in global markets and exchanges at an increasing and alarming rate. Exchange officials and regulators downplay the events so as not to cause a loss of confidence in markets. Flash Crashes, Fat Fingers andComputer Glitches, Oh My! highlights the flash crash and flash spike events in markets that the media neglected to mention. Is another 5/6/10 Flash Crash, or worse, on the horizon?

RUT Russell 2000 Small Caps Daily Chart; Battle for the 50-Day MA

The Russell 2000 small caps (RUT) and the Dow Jones Industrials (INDU or DJI) have both lost their 20-day MA's. The S&P 500 (SPX) is testing its 20-day MA at 2265 and whoopsies daisies, the SPX falls through to 2262 as this is typed. The Nasdaq Composite (COMPQ) remains well above its 20-day MA.

The RUT is making a bounce or die decision at the 1346 and will likely take the broad indexes with it. Watch RUT 1346 and SPX 2265 as indications of the path ahead for stocks; both are making bounce or die decisions.


A bounce in the RUT will send price back up for a back kiss of that brown resistance line at 1358-1360 and the 20-day MA at 1364. A failure at 1346 will open the door to test the support down at 1315-1320. 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, January 19, 2017

Gold Daily Chart; Overbot; Negative Divergence Developing

Keystone pointed out the bottom in gold last month with the green falling wedge, oversold conditions and positive divergence (green lines). The lower standard deviation band was violated and price was below the moving averages needing a mean reversion higher. A launch in price was expected which occurs. Now what?

Gold moves up to tag the middle band line, which is also the 20-day MA at 1167 and rising. Price kept on moving higher as the US dollar index has pulled back down. Gold now tags the upper standard deviation band so the middle band at 1167 and rising is in play.

The high prints in gold over the last couple days result in overbot stochastics and money flow. Also neggie d with the histo, stoch's and money flow which conspire to spank gold down yesterday and today. Gold is at 1203 as this message is typed (blue dot). This is the weakness due to the neggie d. The RSI and MACD line, however, are long and strong and want to see another higher high in price after this pull back finishes in the daily time frame. 

Gold is running into a congestion zone from November at 1220-1230. The daily chart will likely top out in this range in the days and say, week or two ahead. Looking at the gold weekly chart, there is upward momo and the 20-week MA resistance is at 1231. Price came up off the bottom and is in the neighborhood so it is reasonable to expect gold to tag the 1231 on the weekly basis.

Sprinkling some magic dust on the above thoughts, gold will likely recover after more sogginess today and perhaps tomorrow but then top out in the daily time frame say next week (when the RSI and MACD line go neggie d). Then a week or two of softness may occur but then price will likely head higher again and target that 1220-1240 area perhaps in mid or the back half of February.

The money was made on the bottom call and rally and if you enjoyed the ride it would have been smart to take the money. If you did not, cash out when gold likely comes up in this daily time frame in a couple days due to the long and strong MACD line. Going forward, the sideways choppiness may be a frustration for traders so Keystone will likely not trade gold but will keep an eye on 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.

TNX 10-Year Treasury Note Yield Daily Chart; H&S

The rising wedge, overbot conditions and neggie d (red lines forecasted the top in yields which occurs. If you remember, in early and mid-December, pundit after pundit stood on soap boxes on television proclaiming that 3.00% is on the way and likely to happen very quickly. Wrong. All they had to do was look at the neggie d and they would not have been making such foolish statements.

Yield trends lower into the falling wedge, oversold stochastics and positive divergence with the histogram and stochastics creating the couple-day bounce in yield. Yield is printing at 2.44% as this is typed (blue dot).

The RSI and MACD line are weak, sloping lower, hinting that there is unfinished business lower. The 20-day MA at 2.45% is overhead resistance while the 50-day MA at 2.35% is support and the moving averages are squeezing in so yield has to choose a direction. If yield breaks out above 2.45% the 2.50% resistance would be targeted next.

A H&S (head and shoulders) pattern is in play with the neckline at that 2.30%-2.35% range and head up at 2.60%. A failure from 2.30%-2.35% would send yield down to the 2.00%-2.10% area. There are some juicy gaps that need filling below 2.30%.

The pink box verifies that the rise in yields from October into this year was a strong trend higher. Until now. The ADX drifts lower to 25 signaling that the up in yields is no longer a strong trend in this daily time frame. There is likely sideways choppiness ahead through the 2.30%-2.50% range. Note and bond bears will rejoice if yield moves up through 2.50% and 2.60% (lower prices higher yields) while bond bulls will celebrate if yield falls through the 2.30% support (higher prices lower yields). 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 30-Minute Chart; 8/34 MA Cross

The 8 MA remains below the 34 MA on the SPX 30-minute chart forecasting bearish markets for the hours ahead, however, the 8 MA is sloping upwards and the 34 MA downwards so a positive cross may occur today which would cause the bulls to throw confetti and imbibe in more Fed wine. The ECB rate decision and press conference takes place over the next three hours, then testimony by Steven Mnuchin on Capitol Hill, President-elect Trump's pick for Treasury secretary, which will impact the US dollar index and stocks all morning long.

Market bears need to curl that 8 MA to the downside and maintain the negative 8/34 MA cross. Bulls need the 8 to pierce up through the 34 to signal bullish markets for the hours ahead. 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, January 18, 2017

NYMO McClellan Oscillator Daily Chart

The NYMO is comical these days. This chart was posted a few days ago pointing out the refusal to correct lower and the game continues. You really do not want to consider a long play on stocks until the NYMO drops into the green oval. The beat goes on. 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.