Thursday, December 8, 2016

CPC Put/Call Ratio and SPX S&P 500 Daily Charts Signal Near-Term Top At Hand

The CPC finally joins the CPCE (see previous chart) put/call chart with an uber low number at 0.75. Low put/calls signal complacency and lack of fear in markets typically where a market top occurs. What do you think will happen? 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 Industrials and TRAN Dow Transports Weekly Charts; New All-Time Highs; Dow Theory Confirmation

The trannies were the big story yesterday. When TRAN broke out higher and printed new all-time highs right before lunchtime yesterday (blue line), the computer algorithms kicked in and sent stocks to the moon. The green dots show the confirmations in 2014 where the industrials and trannies keep printing higher highs and higher lows and confirm each other which verifies the stock market rally.

Trouble begins in early 2015 when the transports roll over to the downside but the industrials keep inching higher. The Dow Theory confirmation is lost. Stocks topped in May 2015 and rolled over. The trannies would not confirm the upside so stocks rolled over and a cyclical bear market started. The trannies and industrials then confirmed on the downside (red dots).

The Dow Industrials print a new higher high early this year but the transports do not. The Dow Industrials and broad stock indexes continued higher without the transports this year. After two years, TRAN finally breaks out and prints a new all-time high. Those highs today are new all-time highs for both indexes. Dow Theorists are happy that the record highs in the industrials are now confirmed by the transports so this gives the stock market rally gravitas; a Dow Theory confirmation.

On the industrials, note the W pattern bottom, base at 16K, breakout line at 18K so target 20K. The RSI and MACD line have a bit more juice so it may take 1 to 4 more weeks to top out and roll over.

On the trannies, the inverse head and shoulder (H&S) pattern is in play. There are two necklines you can look at one at 8100 and the other 8300. Two heads can be factored in; say, 6400 and 6700. Thus, these parameters yield upside targets at 10.2K, 9.9K, 9.6K and 9.5K. Price is at 9.4K. The purple ascending triangle played out. The vertical side is 800 points so adding that to the breakout level at 8100 yields an 8900 target that was easily achieved. The RSI and MACD line have some long and strong juice so trannies may need 1 to 4 weeks to top out with neggie d on the RSI and MACD and roll over to the downside. The move in the trannies is parabolic. 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 2-Hour Chart

The 2-hour chart has been an interesting chart to watch over the last couple weeks. The negative divergence, rising wedge pattern, and overbot conditions conspire to create a spankdown in price but the positive news bites prohibit any significant pull back. The Trump  Rally began the week of the presidential elections, 11/7/16, and ran higher like a banshee  into the top three weeks later. The pull back is minimal and this week stocks go parabolic due to the ECB offering more stimulus which they confirmed today. In addition, the Italian referendum no vote was no biggie and the Italian banks will receive bailouts. The bulls are wearing rose-colored glasses as they dance and sing inebriated from the ECB wine.

The contrarian indicators such as low VIX, low CPCE put/cal, high NYMO and so forth favor a pull back in stocks. The positive news bites hit the charts suddenly so there is always a little time required to build the new information into the price and indicators. The SPX is violating the upper standard deviation band for the last few candlesticks so a move to the middle band at 2212 is on the table as well as the lower band at 2176 with both lines rising.

Price makes a higher high and the stochastics and ROC indicators are neggie d with stoch's overbot so a spankdown is needed in this 2-hour time frame, however, the RSI is a smidge higher and the MACD continues higher long and strong. Thus, after a small pull back, price will want to make another matching or higher high in price and then, if the MACD line goes neggie d, should roll over to the downside and a sell off will begin in stocks. So a little down-up-down jog move is likely over the next few hours. Thus, 1 to 5 hours are likely needed to top stocks out. This places trading into this afternoon or tomorrow morning for a top to occur.

The bulls are going to try and jam the bullish euphoria into the weekend to keep the party going. When the RSI and MACD line turn neggie d with the new price high, that will tell you the top is in. 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.

VIX Volatility and SPX S&P 500 5-Minute Charts; Divergence from Inverse Relationship

Stocks and volatility move inverse to each other about 90% of the time so it is always worth paying attention when they diverge. The green stock market rallies occur as vol sinks. Stocks sell off as vol rises. Something happened two days ago. Stocks continue rallying to new record highs but volatility is now rising as well. One of them is wrong. Typically, when stocks make new highs and volatility does not make new lows, that hints that stocks are running out of gas and likely topping. Professional traders are buying volatility for downside protection. 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.

NYMO NYSE McClellan Oscillator and SPX S&P 500 Daily Charts Signal Near-Term Top At Hand

The NYMO high a couple weeks ago creates the spank down in stocks, however, the Trump rally and central banker intervention will not allow any significant pull backs in equities and stocks continue melting higher. The NYMO is back at 60-ish consistent with levels where a near-term top occurs for stocks. The red circles show stock market tops while the green circles show stock market bottoms. What do you think will happen? 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.

CPCE CBOE Put/Call Ratio and SPX S&P 500 Daily Charts Signal Significant Market Top At Hand

The stock market upside orgy continues. The Trump Rally pumps stocks higher in November into this month. The ECB provides more QE which pumps stocks higher. Italian bank bailouts are coming further pumping stocks higher. Trannies (Dow Transports) print new all-time highs yesterday providing a Dow Theory confirmation of the Dow Industrials all-time highs so the computer algorithms go wild with buying programs yesterday.

The market euphoria, lack of fear and complacency is rampant as traders drink Fed and ECB wine and stagger around buying stocks with reckless abandon. The CPCE put/call prints lows not seen since the summer of 2015 at the significant stock market top. The red circles show market tops and the green circles are market bottoms. What do you think will happen? Stocks are in a melt-up now but a pull back move is desperately needed and on the come due to the rampant complacency and lack of fear. 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 5, 2016

Keybot the Quant Turns Bullish

Keystone's trading algo, Keybot the Quant, flips back to the bull side today at SPX 2204. Pay attention to VIX 13.90; it is the rudder steering market direction. Bulls win below 13.90 (now with a 12-handle) and bears above. Keep alert for a whipsaw back to the short side which would be likely if the VIX moves above 13.90.

More information is found at Keybot's site;

Keybot the Quant

Sunday, December 4, 2016

SPX S&P 500 Daily Chart

Remember last week, Keystone posted this SPX daily chart when the top was printing six days ago. That was the thin blue line where you see that the overbot stochasits, and slightly neggie d stoch's and neggie d with the histogram conspire to create the pull back but the green lines for RSI, MACD line and money flow were long and strong printing higher highs as the SPX prints higher highs. This hinted that price needed to come back up for another matching or higher higher. It did.

The SPX comes up to test the 2213-2214 all-time highs three days ago and then collapsed. That day is a key reversal day with price printing at or above the prior high and then below the low as compared to the three prior days; a bearish indication. Most importantly, the horizontal red line shows price printing the matching high so the indicators can be judged to see if they are in negative divergence and all the indicators are neggie d (red lines) so price is spanked down from the top.

The RSI stalls, ditto the money flow, over the last two days creating enough oomph to provide a small recovery move last Friday. The MACD line is weak and bleak and the MACD cross may turn negative to begin the week (bearish). The stochastics are weak and bleak wanting to see a lower low in price after any bounce. The 20-day MA at 2177 and rising needs back tested. The SPX may want to come down to test the 2175-2188 level before bouncing. Bears need the RSI and stochasitcs to move below the 50% level into bear territory, and the negative MACD cross, to guarantee further downside for stocks. 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 Support, Resistance (S/R), Moving Averages and Other Important Levels for Trading the Week of 12/5/16

SPX (S&P 500) support, resistance (S/R), moving averages and other important levels are provided for the trading week of 12/5/16. Levels shown in bold are strong resistance and support. Bold and underlined levels are very strong and important S/R.

For the S&P 500 in history, the all-time record high print occurs last Wednesday, 11/30/16, at 2214.10 and the all-time closing high is 2213.35 from 11/25/16. The all-time record intraday low is 666.79 (the infamous 666) on 3/6/09 and all-time closing low is 676.53 on 3/9/09.

For 2016, the intraday high is 2214.10 and closing high is 2213.35. The intraday low for this year is 1810.10 on 2/11/16 and the closing low for 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.

The three-week Trump Rally stalls last week. The month of November is a big up month. December begins at SPX 2199. Interestingly, the Bradley turn date a few days ago marks the top in stocks and trend change on the daily basis. The low CPCE put/call ratio has not resolved to the upside yet so it hints that some additional market selling is on the way. The first week in December is the strongest tax loss selling week of the year so this would be expected to create a slight negative bias in the stock market over the next few days. The NYMO daily chart has not fully resolved to the downside to create a tradeable stock market bottom so it hints that a bit more downside in equities is on the way.

The SPX began the year at 2044. The new week begins at 2192, a148-point gain, +7.2%, this year. The central bankers saved the markets in February and the coordinated global money printing creates the multi-month rally. The Trump election victory now creates optimism that money will be spent on infrastructure so commodities, basic materials and industrials stocks soar higher, as well as the bankers. The central bankers and government spending is the market. Market prognosticators continue upping their estimates with many proclaiming SPX 2300 and far higher. The future is so bright that you have to wear shades.

Interestingly, however, from a non-optimistic perspective, the SPX monthly chart is printing negative divergence across its indicators as well as a rising wedge pattern and overbot conditions. This set up on the monthly chart is just like May 2015 when the significant top occurred in the stock market. It is very likely that stocks are currently printing a multi-year top. The central bankers have supported markets for eight years but perhaps the party finally ends, at least according to the monthly chart it does. The central bankers, however, are extremely powerful.

For the new trading week ahead, Monday, 12/4/16, beginning the first full trading week in December, with the S&P 500 at 2192, the bulls need to touch the 2198 handle to create an upside acceleration that will jump strongly above 2000 and target the 2205 R. The bears need to push below 2187-2188 to accelerate the downside to 2182-2183 in a flash on Monday. A move through 2189-2197 is sideways action to begin the week. The daily chart needs to back kiss the 20-day MA which his at 2177 and rising. Price may want to poke around at 2175-2188 before recovering.

Stocks will be in big trouble if the 200 EMA on the 60-minute at SPX 2173 fails. Bulls will continue to keep the stock market buoyant and happy as long as they do not lose 2173.

Looking at the near-term picture the support/resistance is 2214, 2213, 2210, 2205, 2198-2199, 2194, 2190-2191, 2187, 2182-2183, 2178-2179, 2175, 2169-2170 and 2164.

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

2214 (11/30/16 All-Time Intraday High: 2214.10) (11/30/16 Intraday High for 2016: 2214.10)
2214.10 Previous Week’s High
2213 (11/25/16 All-Time Closing High: 2213.35) (11/25/16 Closing High for 2016: 2213.35)
2198.81 December Begins Here
2197.95 Friday HOD
2194 (8/15/16 Intraday High: 2193.81)
2191.95 Friday Close – Monday Starts Here
2190 (8/15/16 Closing High: 2190.15)
2188.37 Friday LOD
2187.44 Previous Week’s Low
2177.47 (20-day MA)
2172.96 (200 EMA on 60-Minute Chart a Keystone Market Turn Signal)
2162.62 (100-day MA)
2161.97 (20-week MA)
2156.25 (50-day MA)
2135.76 (150-day MA; the Slope is a Keystone Cyclical Signal)
2135.06 (10-month MA)
2135 (5/20/15 Intraday High: 2134.72)
2133 (7/20/15 Intraday High 2132.82)
2131 (5/21/15 Closing High: 2130.82)
2130 (6/22/15 Intraday High 2129.87)
2128 (7/20/15 Closing High: 2128.28)
2026.94 (150-week MA)
2126 (4/27/15 Intraday High: 2125.92)
2124 (6/23/15 Closing High: 2124.20)
2121 (4/24/15 Intraday High: 2120.92)
2120 (2/25/15 Intraday High: 2119.59)
2118 (4/24/15 Closing High: 2117.69)
2117 (3/2/15 Closing High: 2117.39)
2116 (11/3/15 Intraday High: 2116.48)
2111 (4/20/16 Intraday High: 2111.04)
2110.71 (200-day MA)
2110 (11/3/15 Closing High; 2109.79)
2104 (12/2/15 Intraday High: 2104.27)
2103 (12/2/15 Closing High: 2102.63)
2102 (4/20/16 Intraday High: 2102.40)
2101.92 (12-month MA; a Keystone Cyclical Signal) (the cliff)
2094 (12/29/14 Intraday High: 2093.55)
2091 (12/29/14 Closing High: 2090.57)
2080.48 (50-week MA)
2079.67 (20-month MA)
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)
2071 (11/21/14 Intraday High: 2071.46)
2070.72 (100-week MA)
2056 (11/18/14 Intraday High: 2056.08)
2046 (11/13/14 Intraday High: 2046.18)
2044 (12/31/15 Closing High: 2043.94)
2043.94 Trading for 2016 Begins Here
2019 (9/19/14 Intraday High: 2019.26)
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)
1993 (1/15/15 Closing Low: 1992.67)
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)
1981 (2/2/15 Intraday Low: 1980.90)
1968 (6/24/14 Intraday Top: 1968.17)
1963 (6/20/14 Closing High: 1962.87)
1956 (6/9/14 Intraday Top: 1955.55)
1951 (6/9/14 Closing High: 1951.27)
1938.40 (200-week MA)
1924 (5/30/14 Intraday Top: 1924.03) (5/13/14 Closing High: 1923.57)
1916.98 (50-month MA)
1902 (5/13/14 Intraday Top: 1902.17)
1897 (5/13/14 Closing High: 1897.45) (4/4/14 Intraday Top: 1897.28)
1891 (4/2/14 Closing High: 1890.90)

EURUSD Euro Weekly Chart; Italy Rejects Reforms Voting No on Referendum; Downward-Sloping Channel; Oversold; Positive Divergence Setting Up

Italy rejects reforms voting no on the referendum. Italians prefer to keep the status quo;  a bloated slow bureaucracy that is unable to institute reforms to help the sick economy. Have another glass of wine and relax; it is the Italian way.

Renzi speaks minutes ago, at 6:20 PM EST Sunday evening, 12/4/16. It is just after midnight in Rome, Italy, Monday morning. Renzi concedes the referendum vote and resigns. The drama will continue today as to what the next step is for Italy.

The euro drops like a stone to 1.0510, now at 1.0550, at levels not seen since March 2015 and at record-breaking lows. The euro drops so the dollar pops. USD 10.44. A stronger US dollar sends commodities lower including oil. US futures are soggy. S&P -8. Dow -40. Nasdaq -25.

The dark green lines and circle show where the euro is slipping, however, the indicators are set up with positive divergence. Stochastics are overbot. These are bullish indications for the euro. Since it is a weekly chart, and the Italy referendum news is only getting priced into the euro chart now, a few days or week or two of weakness may persist. The ECB meeting is on Thursday so an extension of QE will create further euro weakness. However, the euro may be a long play say in a week or two and bounce from the possie d on the weekly basis. But there is no rush to trade the euro especially with the ECB on tap this week but place it on the radar as a potential long side trade maybe starting in a couple weeks.

Price may want to test that bottom rail of the downward-sloping channel and bounce from there, call it the 1.03-1.05 area. Price is overextended to the downside far under the moving averages so a mean reversion higher is desperately needed which is another bullish indication setting up. 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.