Friday, December 6, 2019

NYA NYSE Composite Daily Chart; New 52-Week Record High; Rising Wedge; Negative Divergence; Upper Band Violation; Price Extended; US Monthly Jobs Report Explained


The NYA prints a new 52-week record high at 13612 but this remains a hair below the all-time record high at 13637 from 1/26/18. The NYSE Composite came within 25 points of an all-time record high. This is fascinating because the NYA is an index that is not yet able to overcome the 2018 market highs but other major indexes such as the S&P 500 (SPX), Dow Jones Industrials (INDU; DJIA; DJI), Nasdaq Comp (COMPQ), Nazzy 100 (NDX) and Semiconductor Index (SOX) have all printed all-time record highs recently. The Russell 2000 small caps (RUT) has also not yet been able to come up and overtake the 2018 record highs.

Interestingly, the SPX, INDU, COMPQ, NDX and SOX did not print new all-time record highs today although they are a hair away but the index that did overtake the November record highs, the NYSE Composite, has not printed an all-time high in almost 2 years. One wonders if the robots are simply cycling into the lagging indexes and stocks in a constant circle jerk that uses central banker liquidity to keep riding the overall stock market wave higher (algo's rotate from sector to sector and index to index as long as the central banker music keeps playing). The Russell 2000 has also recovered to its November high today, like the NYA, so the robots are buying-up the lagging indexes in today's action.

The rising wedge is worrisome since the collapses from this pattern can be dramatic and fast. The NYA failed 4 and 5 days ago, on bad trade war news, but Soybean Donny ran to a microphone and proclaimed that the US-China trade deal is going swimmingly. Prices have gapped-up ever since and are pumped higher this morning after the US Monthly Jobs Report.

President Trump is touting the 266K jobs report, and he should, it is on his watch, and it is a robust headline number, but as usual, poking around beneath the hood provides an education. The consensus for the headline jobs number was 180K, some said 187K, and others lowered their estimates after the ADP payroll numbers came in lighter than expected. The 266K jobs surprised everyone and is about 80K or 90K above the expectation. The prior months were revised higher which is an important positive.

Off the top, and as reflected by the manufacturing sector, 50K jobs are due to GM employees returning to work after the strike. This is not a recurring number. The jubilation in the 266K number is people thinking 'wow, it will be like this here on out'. No, it probably will not. That 50K jobs will not repeat next month. Market participants are extrapolating today's job numbers into the future painting a beautiful mosaic but they are mistaken since many of the gains appear one-offs or seasonal and holiday employment. The return of the GM workers also opens the door to calling back employees at the local support businesses such as the doughnut shops, restaurants, copy centers, caterers, cleaning people, etc.., which has to be a few thousand adds and helps create the broad-based gains in the report.

The largest gains are in education and health services. Let's see. What is occurring now? Yes, the yearly Medicare and other health insurance sign-up and policy adjustment period. Many of these workers, perhaps thousands, are probably employed to help with this busy health insurance enrollment period. They can be kicked to the curb in a couple weeks. Merry Christmas.

Leisure and hospitality are another big winner. Again, seasonal and temporary employment. Many companies and businesses take their employees to luncheons and/or holiday parties to try and keep them happy. Holiday shoppers need to refuel at restaurants so they can go buy more worthless crap. Thus, many thousands of jobs are added in this category that are mainly seasonal and again, they will be sh*t-canned come January.

Warehousing is another big winner with jobs while retail jobs are weak. Consumers are buying from AMZN and other online retailers so the warehouse jobs grow while the retail jobs shrink. Again, many of those warehouse jobs are for the busy season and they will not be needed come 2020. Ditto the shippers such as UPS and FDX hiring workers to help with deliveries but their foreheads will be stamped with "No Return" come January. Adding up these seasonal boosts put you in the ballpark of the 70K to 90K beat. However, nothing can be taken away from the surprise boost in jobs. It is the best jobs growth that central banker money can buy.

The unemployment rate fell from 3.6% to 3.5% but was expected to remain steady. The rate is at a 50-year low and you would think that was good news, which it is, kind of, but if the US economy was in a strong robust recovery, the rate would actually be climbing. A great indication of an economy coming out of the doldrums and ramping higher for a sustained long-term joyous path is the unemployment rate initially moving higher for a few months and then rolling back over lower. If the millions of Americans that are out of work, having given-up on the chance of finding jobs, believe that the economy is truly recovering, they will flock into the job market in mass numbers; this behavior creates a temporary higher unemployment rate.

Everyone wants a job and a piece of the pie once the economy takes off like gangbusters. This sends the unemployment rate higher since for a few weeks and months more people are looking for jobs than acquire jobs (which skews the data creating a higher rate) but over time they find a job they like, and the rate comes back down. So it would have been better to see the unemployment rate climb over the last few months, say from 3.6% to 3.7%, then 3.8% and maybe 3.9% or even 4.0%, and then move lower again. This is not happening; the rate remains subdued with companies holding on to workers praying that the backlog increases.

The unemployment rate is remaining at record lows. People are not flocking into the work force since it is status quo with the economy, same-o, same-o. Companies are holding on to the workers they have, a bare-bones staff, but this cannot go on forever. The Unemployment Claims numbers remain subdued because business cannot afford to layoff anyone else; they are hoping for more work to come through the door. In addition, the labor participation rate is actually down a tick this month to 63.2%. So the headline numbers are great for the newspaper headline writer's but create questions for pondering minds.

Keystone has harped on the wage data in the jobs report for several years. The earnings data is more important than the headline jobs number. The mainstream has finally joined this club over the last year or so and focused strongly on the wage data. Today's bright 266K jobs is a shiny object that no one can resist so it is receiving the bulk of the media attention. The monthly wage data misses by a tick up +0.2% but the year-on-year beat by a tick at +3.1%.

Keystone has explained the wage conundrum many times. The Federal Reserve's grand one-decade-plus Keynesian financial experiment, started under Chairman Bernanke in March 2009, remains a complete failure unable to generate inflation. Of course, the obscene global central banker collusion and non-stop intervention in markets is actually a success for the wealthy elite class since they own large stock portfolios and are now filthy rich from the one-decade-plus dovish monetary policies. This was always the intended outcome in America's rigged, crony capitalism system; the wealthy privileged class control the game.

Inflation cannot exist without wage inflation. These concepts are very simple. Do not complicate your life with television hype and misdirection. Wages must be growing for there to be sustainable overall inflation. This is Economics 101 and the problem over the last decade. Wages remain stagnant; ergo, no inflation. You are told it is a tight labor market but when you go in to ask the boss for a raise, he/she tells you to go pound salt. Inflation cannot occur without wage inflation occurring.

Wages are currently rising +3.1% per year. That's pitiful. Just think, you eat all the boss's crap all year long and all you get is a lousy 3% bump in pay. And some people receive a little more, maybe 5% or 6%, which means others receive no increase in pay at all. A 3-handle does not cut the mustard. The dirty little secret the Fed will not tell you is that you need around +4.5% annual wage growth to feed sustainable, guaranteed, steady inflation, above the +2% Fed target, for months and years forward. In this goofy day and age with the sick central banker control of global markets, let's be generous and say a 4-handle is good enough to provide the energy for sustainable inflation. We are a percent away from that, hence, you do not see inflation. It's not rocket science folks.

The narrative for today's price action provided by the business news outlets is that the jobs report created a big rally. Keystone's wet blanket on the data above provides you a more sobering perspective of today's market activity and several of you are placing the Fed wine down for a minute to try and clear your head. Stocks rally on central banker liquidity and nothing has changed. The Fed and its partners in crime such as the BOJ, ECB, PBOC and 20 other central banks, are printing money like madmen providing more liquidity than even after the Great Recession. Things are out of control.

Since the wage data remains subdued, there is no inflation anywhere in sight. Since there is no inflation in sight, the Federal Reserve will not hike rates and the dovish central banker fun will continue indefinitely. In other words, the headline jobs and rate numbers are great but the real focus by professional traders is that the Fed and other central banks plan to remain accomodative forever in a low inflation and disinflation environment so it is party-time; buy stocks.


Copper jumps +3.2% today the red metal exploding higher with investors believing in a trade deal. This huge move tells you that a lot of the rally today was due to a happy vibe about the trade deal rather than jobs number joy. The bulls know just how to nudge markets enough to limp them along at elevated levels especially to end the year. The FOMC rate decision is Wednesday and stocks are typically higher 80% of the time going into a Fed meeting. Chairman Powell will be greasing the market skids with fancy talk on Wednesday afternoon. The full moon peaks at midnight, going into Thursday morning, and stocks are usually bullish through the full moon.

Thus, the bulls have the wind at their backs next week say from Monday afternoon into Thursday. The ECB policy meeting is on Thursday and this may actually be a more important central bank meeting than the Fed. If the bears are going to growl, they probably need to do that out of the gate on Monday morning and try to override the Fed positivity into mid-week.

Perhaps the bulls will run next week until the new ECB President, Madame Lagarde, swims into power (she was an Olympian for France in synchronized swimming in her younger days and she obviously maintains a healthy form). President is a unisex title so she will likely be addressed as President Lagarde. This is a big meeting for Lagarde but she is a seasoned pro at handling the political pressure. Yes, her meeting on Thursday may be far more important than Powell's on hump day. Retail Sales data hit next Friday and we shall see if the American consumer continues to support the economy, or not.

So the bulls win a big victory in the stock market today but after dissecting the drama, we are once again left with a mixed bag of confusion. The charts may need a day or two more to absorb the upside momentum (tiny green lines) but the daily chart above remains in neggie d and bearish. Let a day or two play out and confirm that the indicators remain neggie d which will signal that the top is in.

The top standard deviation band is violated so the middle band at 13462 and lower band at 13321 are on the table. The bands are squeezing in the tightest since late July which resulted in a huge squeeze lower. Tight bands predict a big move is coming but they do not predict direction. Price is extended above the moving averages requiring a mean reversion lower. The Aroon green line is at the 100 max with nowhere to go but down and the red line is at the min zero with nowhere to go but up both are bearish going forward.

The positive sound bites on the US-China trade talks and the belief that the Fed and other central banks will always support markets with easy money keep the stock market elevated. Like other indexes over the last couple weeks, the charts say down but Soybean Donny, Dictator Xi, Pope Powell and other characters continue pumping stocks higher with happy talk. 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 5-Minute Chart


The SPX is up 32 points, +1.0%, to 3149, with 10 minutes remaining in the trading day, and week. Traders exclaim that the new near-record highs are beautiful. What's that? I see. Volatility is not cooperating. Considering the huge up day orgy, the VIX should be falling like a rock and at least sporting a 12 handle. Instead, volatility is flatter than a newlywed's souffle. Something is rotten in the state of Denmark. 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.

RTH Retail ETF Weekly Chart; Overbot; Rising Wedge; Negative Divergence; Upper Band Violation; Price Extended


You hear it everyday on business television about how the American consumer is holding up the US recovery and markets. Manufacturing is in a quasi-recession. The couple-quarter spurts in growth, that are created by central banker money printing, continue occurring and each time they peter out the Fed, ECB, BOJ, PBOC and others are ready to cut rates and provide other forms of monetary stimulus to crank-up the growth again.

So the economy is in a sideways funk. Companies are hesitant to spend on capex (large or expensive equipment and technology) due to the ongoing trade wars or it at least provides an excuse. The real underlying reason is sluggish demand but no one on Wall Street is willing to say this out loud. Against this hazy backdrop, the resilient American consumer carries the mantle of bullishness for the nation.


The US consumer happily skips to WMT or TGT each day, buying all that worthless crap that they do not need. Nonetheless, the American consumer is supporting the US economy. If products are moving off the shelves, people remain employed to make more of those gadgets and tchotchkes. Watch inventories going forward.


Since strategists and analysts are looking for the American consumer to carry the load for at least a couple more quarters, are they in good enough shape? The ladies buy over two-thirds of the products in America with men buying about a third. So, by default, the American woman, in her average Size 14 stretch slacks and sensible shoes, with a purse full of coupons and store advertisements, is tasked with supporting the entire US economy on her thin shoulders.


The RTH retail ETF chart above says its over for the American consumer on the long-term weekly basis. The chart is ugly. The stoch's are overbot and the RSI is coming off overbot territory both agreeable to a relaxation downward in price. The rising wedge is ominous hinting at a drastic collapse ahead. The red lines show the RTH monthly chart in universal negative divergence. It is over. Price no longer has any fuel to move higher.


Despite the record highs, the ADX is down at 15 indicating that the trend higher is not considered a strong trend. That is odd since you would expect the ADX to be above 30 right now. The Aroon green line is at the ceiling with nowhere to go but down and the red line is in the cellar with nowhere to go but up both are bearish. All the above parameters are bearish.


Price has tagged the upper standard deviation band so the middle band at 115 is on tap in the weeks ahead and the lower band at 107 is also on the table. Price is extended above its moving averages requiring a mean reversion lower. More bearish stuff. In addition, the RTH monthly chart is also bearish and negative.


The chart is sick. It is telling you that a long term multi-week (and multi-month and multi-year top considering the monthly chart) top is in for the retail sector. It probably hints that there will be a lot of retail bankruptcies after the first of the year. It means that the great American consumer, mainly all our lovely ladies that do all the spending and buying, can no longer hold the weight of the US economy on their pretty, but thin shoulders. 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.

RTH Retail ETF Monthly Chart; Overbot; Rising Wedge; Negative Divergence; Upper Band Violation; Price Extended


You hear it everyday on business television about how the American consumer is holding up the US recovery and markets. Manufacturing is in a quasi-recession. The couple-quarter spurts in growth, that are created by central banker money printing, continue occurring and each time they peter out the Fed, ECB, BOJ, PBOC and others are ready to cut rates and provide other forms of monetary stimulus.

So the economy is in a sideways funk. Companies are hesitant to spend on capex (large or expensive equipment and technology) due to the ongoing trade wars or it at least provides an excuse. The real underlying reason is sluggish demand but no one on Wall Street is willing to say this out loud. Against this hazy backdrop, the resilient American consumer carries the mantle of bullishness for the nation.

The US consumer happily skips to WMT or TGT each day, buying all that worthless crap that they do not need. Nonetheless, the consumer is supporting the US economy. If products are moving off the shelves, people remain employed to make more of those gadgets and tchotchkes. Watch inventories going forward.

Since strategists and analysts are looking for the American consumer to carry the load for at least a couple more quarters, are they in good enough shape? The ladies buy over two-thirds of the products in America with men buying about a third. So, by default, the American woman, in her average Size 14 stretch slacks and sensible shoes, with a purse full of coupons and store advertisements, is tasked with supporting the entire US economy on her thin shoulders.

The RTH retail ETF chart above says its over for the American consumer on the long-term monthly basis. The chart is ugly. The stoch's are overbot and the RSI is coming off overbot territory both agreeable to a relaxation downward in price. The rising wedge is ominous hinting at a drastic collapse ahead. The red lines show the RTH monthly chart in universal negative divergence. It is over. Price no longer has any fuel to move higher.

Despite the record highs, the ADX is down at 22 indicating that the trend higher is not considered a strong trend. That is odd since you would expect the ADX to be above 40 right now. The Aroon green line is at the ceiling with nowhere to go but down and the red line is at zero with nowhere to go but up both are bearish. All the above parameters are bearish.

Price has tagged the upper standard deviation band so the middle band at 107 is on tap in the months ahead and the lower band at 92 is also on the table. Price is extended above its moving averages requiring a mean reversion lower. More bearish stuff. In addition, the RTH weekly chart is also bearish and negative.

The chart is sick. It is telling you that a long term multi-month and multi-year top is in for the retail sector. It probably hints that there will be a lot of retail bankruptcies after the first of the year. It means that the great American consumer, mainly all our lovely ladies that do all the spending and buying, can no longer hold the weight of the US economy on their pretty, but thin shoulders. 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.

GTX Goldman Sachs Commodity Index Weekly Chart; Sideways Symmetrical Triangles


Commodities are at a critical juncture. The US has been in a deflationary and disinflationary funk for many years as Keystone has described and discussed. Wall Street fought this thinking every step of the way but now the universal consensus is that low inflation and disinflationary behavior will remain in place for several years ahead. Thus, the radar goes up that the low inflation period may be ending.

Scrolling back to the 30-year bond chart and analysis posted the other day, yields have placed technical lows as per the charts ending the three-decade bond rally. This behavior also hints that inflation is on the come.

However, the sick central bankers have orchestrated the longest economic recovery in history due to their obscene Keynesian money-printing. It is sickening that the wealthy have raped the American system for all its worth since the Great Recession. Humorously, many of the billionaires and millionaires are becoming worried about America's new Gilded Age and opining that more must be done for the common person.

The wealthy class, that destroyed the middle class over the last five decades by shipping jobs overseas, are all of a sudden concerned over the success of the little people and the United States as a whole. Pause for laughter. The politicians, corporate executives, government officials and the elite privileged class sent jobs overseas to lower expenses for companies which increases earnings and sends stock prices through the roof. Of course, the wealthy are the ones that own the large stock portfolios so they stuff big wads of cash into their pockets as they adjust laws and regulations to allow more raping of the American system. One-half of America does not own a single share of stock; stop and think about that.


So the US is left with a near 11-year rally in the stock market created by Federal Reserve and other global central banker easy money wondering how the grand financial experiment ends. Note the big rallies from the early 2016 bottom and early this year's bottom both 100% orchestrated by the Federal Reserve and other global central bankers. Commodity prices stumble sideways into the symmetrical triangles above and must make an important up or down decision.

The price decision from the triangle patterns has serious ramifications on all our futures. If prices fail from here, we are headed for more deflation. Even though the Treasury yield charts, and the universal belief that low inflation will remain, hint that inflation will actually begin slowly ramping higher going forward, an economic recession is the wild card (that may cause disinflation and low inflation to linger).

If commodity prices tank, obviously it will be due to the fact that global demand is in a bigtime confirmed downtrend. In other words, "We don't need no steenkin' oil, copper, iron ore or grains." Raw materials will not be in demand since products will not be in demand. This is the pathway to doom and gloom and a couple years of fear, despair, and agony, as Grandpa Jones would sing.

If commodity prices jump up and out of the sideways triangles, it is party time for the bulls and inflation is truly on the come in the weeks and months ahead, finally, after the Federal Reserve has tried to create inflation for 11 years with their sick (because the central bankers only enrich the wealthy, creating a huge rich versus poor income gap, that is about to morph into a multi-year probably violent class war in the US after the recession hits) monetary policies.

So those are the two paths ahead. Robert Frost opined about the road not taken, but which one is that, is it the one less traveled? Flip a coin for the road ahead since the chart indicators and moving averages are all moving dead flat sideways like price. Price, the 20-week MA and the 50-week MA are all at 2424-2485. It is decision time. Price must bounce or die.

The purple triangle has a side that is 700 points so a breakdown from 2430 will target 1730 and trouble and misery ahead. A breakout above 2430, which price is trying to do now, will target 3130 and market joy ahead. The blue triangle vertical side is about 1300 points so a breakdown from 2350 would target 1050, mayhem for the stock market and millennial's asking why they were not told that life could become so drastically different and hard so fast (recession). A breakout above the top blue triangle line at 2600-ish would target 3900 and record highs in stock markets that continue through 2020. Folks will conclude that central banks can print money forever creating never-ending stock market gains.

The chart does not hint at which way price wants to go (although price is trying to sneak up and out of the purple triangle right now) but realize that if the red arrow failure occurs, the Armageddon scenario plays out for the US economy and markets. Global deflation and disinflation and recession will be on the table for at least a couple years and the stock market will be trending steadily lower and lower.

On the flip side, if the happy green arrow breakout higher occurs, the joyous scenario unfolds where global growth picks up because it is true growth and not the same-o 11 -years of central bank-induced growth (that lasts for a couple or three quarters and then fizzles out requiring more central banker money to create another spurt). Stocks will be printing new record highs through 2020, recession will be off the table, jobs will be plentiful and inflation will be on the rise but it will be good inflation reflective of a healthy economy and markets. Don't hold your breath for this outcome. The former scenario is more likely.

If the breakdown of commodities occurs, the low inflation will linger for another year or two and then recover every year forward after that then likely flying into hyperinflation perhaps about 3 or 4 years out which is going to be a whole new set of problems. The United States faces a wild two decades ahead. Crony capitalism is on its way out and the multi-year class war that is upon us will likely lead to a socialism-light type America in a couple decades or perhaps a compassionate capitalism if you will.  At least that new evolving system over the next 5 to 20 years, whatever it is, will attempt to not screw the common people. Capitalism is destroyed by the (greedy) wealthy elite class that benefit the most from the system.

The greedy wealthy probably destroyed any hope that  a capitalism system could exist in the very long-term. Capitalism failed because of the same reasons that all other ism's (socialism, communism, fascism, dictatorships, etc...) fail; human greed and non-transparency. It's not rocket science. Watch commodities closely since by January you will likely know the path ahead that has been chosen for the United States, and yourself. 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, December 5, 2019

XLY Consumer Discretionary Monthly Chart; Overbot; Rising Wedge; Negative Divergence


The M&A (merger and acquisition) talk has gone bonkers in the luxury goods sector in recent days. TIF is on the buyout block and this morning in Europe, Moncler catapults +8% higher on takeover chatter. Life is fantastic for the elite wealthy class. The central bankers have goosed the stock market since March 2009 rewarding the rich (that own large stock portfolios) at the expense of the stupid huddled masses.

The stock market is at an epic top. It is the silly season. The tribal warfare in politics, the social media craze with everyone seeking their 15 minutes of Andy Warhol fame, the public treating each day as entertainment with a care-free attitude about taking on debt, are all hallmarks of the bread and circus days, the topping of a long-term Kondratieff Cycle. America, and the world, has many ugly days ahead over the coming couple years.


XLY is the consumer discretionary ETF. AMZN qualifies under this umbrella since many of the Amazon purchases are frivolous; worthless bobbles and trinkets that are thrown to the curb the following year. Luxury spending is by definition, discretionary.


A $2,000 used Ford Taurus with rusted doors and a smelly interior gets you to the same destination as the $80,000 Mercedez-Benz with leather seats and a wood-paneled dashboard. The winter coat from the Thrift store keeps you just as warm as the $5,000 mink fur coat. The $20 Timex keeps the same time as the $10,000 Rolex.

Alas, the wealthy's pockets are overflowing with money, thanks to the global central bankers, and they spend that money on the latest bobbles and trinkets to flaunt their fortune. XLY is a moonshot once former Federal Reserve Chairman Bernanke started QE 1 to save the US stock market in March 2009 and protect the wealthy class. The Fed and other public officials perform the bidding of the Wall Street investment banks since they are rewarded with lucrative speaking engagements at token luncheons once they leave office. This is the way the crony capitalism system works. It is crooked and rigged.


But all good things do come to an end. After all, your credit card has a limit on it, right? The same thing occurs with the global central bankers that have colluded to save the world's markets daily during the last decade. The only difference is that the limit on the Keynesian money printing is an unknown. Markets go up and the wealthy dance with glee, since they own the large stock portfolios, but the game only continues as long as everyone has full faith and confidence in the central bankers. When that is lost, all is lost.


The XLY monthly chart says the denouement is here. Godot has arrived. The epic multi-month and multi-year top is in. If you are young, run, don't walk, from the stock market. Otherwise, you will lose your money. The brown circles show the distribution taking place over the last few years. Those are the exact months the smart Wall Street money is distributing shares to the dumb money, a.k.a., Joe Sucka, Frank Fool and Bertha Bagholder. The M&A news and talking heads on business television cheerlead the stock market higher encouraging the sucka's to come on in and buy or risk losing out on the fun. The pump and dump is a staple money-maker on Wall Street.


The RSI was overbot for several years and now off those levels but the stochastics remain overbot both agreeable to price pulling back. The red rising wedge is ominous since the collapses from these patterns can be quite fast and dramatic. The red lines show universal negative divergence across all indicators. The top is in on the long-term monthly basis. Git outta Dodge now or you will be the bagholder.


The purple box for the ADX shows how the move higher in the SPX was a strong trend higher so you expect more highs. However, the May 2015 top occurs; remember how Keystone described and explained that topping process in real-time? The stock market had no business to move higher from 2015 on, but the central bankers are always ready to pump stocks higher to please their wealthy masters. One-half of Americans do not own one single share of stock! The coming class war will likely be violent and last for many years probably a decade or two. The gap between rich and poor is the widest in 50 years.


Note the famous Tweezer Bottom in early 2016. Stocks were toast but the Fed stepped in to save the day creating the obscene gains in stocks in 2016 and 2017. Structural unemployment and high debt remains for the huddled masses but the wealthy dance with glee as the central bankers goose equities higher. The day of reckoning came again in Q4 2018 but as Keystone described this year, on 1/3/19, the global central banks panicked again and goosed stocks +25% this year on more Keynesian money-printing. It is sickening and nauseating to watch. Crony capitalism is gasping its last breaths over the coming months and few years.


The ADX shows a strong trend again, due to the central banker goosing, in 2018 but this trend petered out after the Q4 2018 crash. Interestingly, note that despite the obscene money-printing this year by over 20 global central banks, the ADX is down at 19 and indicates that this big upside rally this year is NOT a strong trend higher. The Aroon green line is overbot with nowhere to go but down and the red line is at zero with nowhere to go but up both indications are bearish going forward.


Remember, the chart above is a monthly chart. We are not talking some neggie d that spanks prices back a few days on a daily chart or a few weeks on a weekly chart. The chart above indicates that a major historic top is occurring on a multi-month and multi-year basis in XLY as well as the broad stock market. Watch your wallet going forward. As Eric would sing and play, "Goodnight Irene, Irene Goodnight." 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, December 4, 2019

SPX S&P 500 30-Minute Chart with 8/34 MA Cross


President Trump pumps the stock market higher today with positive comments about the US-China trade talks. Yesterday, Soybean Donny said the trade deal would not occur until after the November 2020 election sending stocks lower but today he got up on the other side of the bed and King Donny proclaims that a trade deal is imminent so stocks rally higher. What a joke it all is. The charts need a few hours to price-in the whipsaw action due to Soybean Donny's comments.

Volatility was jammed lower early this morning as well as copper jammed over +1% higher. The price action is the opposite of yesterday when the higher volatility and weaker copper paved the way for market carnage. Today it is bullish market glory.

The 8 MA pierces up through the 34 MA on the SPX 30-minute chart at noon today so the bulls cheer. King Donny saved the day but no one was worried anyway because Pope Powell is standing at the ready, willing to bless markets with more easy money in the event of any downturn. The financial system has become a caricature of itself.

Keybot the Quant is back on the long side after the bulls sent volatility lower and copper and commodities higher, it was a trifecta of bullish joy that creates the upside orgy. These three parameters will have to weaken for the bears to growl again. Watch copper and volatility closely; they tell you which direction the stock market is moving. As copper goes, so goes the market. Copper jumps +1.3% today. The VIX moves inversely to the SPX. VIX is at 14.43. Keybot identifies VIX 15.11 as the critical bull-bear line in the sand so the bulls are winning.

The bulls will float stocks higher as long as the 8 is above the 34 on the SPX 30-minute chart above. The only way to curl the 8 MA over to the downside is for price to start printing below the 8 MA. That would be the first indication that the bears are coming to life again. Bears got nothing until the negative 8/34 MA cross occurs. It probably depends on what side of the bed Soybean Donny wakes up on tomorrow. 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 2:41 PM EST: The SPX is up 25 points, +0.8%, to 3118. The 20-day MA at 3110 is now support, but it was resistance at this morning's opening bell. Price may play around at this 3110-ish level for a little bit as it decides to bounce or die, or perhaps wait for another comment from Soybean Donny. VIX 14.57. Copper +1.4%. Considering the whipsaw action this week, stocks may simply stumble and bumble sideways until the US Monthly Jobs Report hits at 8:30 AM EST on Friday morning, 12/6/19. Consumer Sentiment hits at 10 AM EST Friday morning another important number.

Note Added 2:56 PM EST: The SPX has performed a 50% Fibonacci retracement of the selloff from 3154-ish to 3079-ish. The drop was 76 points, so one-half of that is 38 points so 3117 is the midpoint and the 50% Fibonacci retracement of the down move. If the SPX moves higher, it will target the 62% Fib retracement at 3125-ish. The SPX may want to nestle in that 3110-3117 area until the jobs number is released. If the SPX closes above 3118, that will open the door to 3122.

Note Added 4:00 PM EST: The SPX finishes up 20 points, +0.6%, to the 3113 palindrome. The S&P 500 nestles itself inside the cocoon formed by the 20-day MA support at 3110 and the 50% Fib retracement at 3117 (resistance). VIX 14.77. Prices are still settling out. The 8 MA is above the 34 MA on the SPX 30-minute chart so the bulls are walking around with their chests puffed out.

Keybot the Quant Turns Bullish

Keystone's trading algorithm, Keybot the Quant, flips bullish this morning at the opening bell at SPX 3104. Volatility drops, copper pops, commodities pop, and the bears are punched in the face. Bears will need these parameters to turn negative again for the stock market selling to return. As copper goes, so goes the market. More information is found at Keybot's site;

Keybot the Quant

Tuesday, December 3, 2019

PTON Peloton Interactive Daily Chart; Peloton Crashes -9.1% on Controversial Television Ad


"Peloton's! Peloton's!" It is funny to hear the sweaty announcer on the Peloton stationary bicycle television commercial yell this proclamation. It sounds like 'pelicans' which are shlumpy birds that eat garbage. The new PTON IPO, that has not even traded long enough to have a 20-week moving average as yet, crashes -9.1% today, although from record highs.  Peloton's holiday television commercial has created controversy.

In the tv ad, a wife or live-in honey receives a Peloton stationary bicycle for Christmas from her husband, or boyfriend. As all men know, any male with half a brain, you do not give your honey exercise equipment for a gift. If you are that stupid, you will be sleeping with Fido in the garage for a few weeks. Some folks think the commercial is sexist. Why wasn't the man given a Peloton? Why does the woman always have to lose weight and get in shape? Viewers also criticize the Peloton ad for showing a skinny runway-style model receiving the bike. She does not need any exercise; she needs a meal. The commercial receives a bad rap on social internet so the stock is taken to the shed out back and beaten with a bicycle chain; PTON plummets -9%.

It is surprising to see PTON price take off like a rocket up that green channel which is trying to close in and become a rising wedge. From 21 to 37 is a +76% rally in only six weeks. Wow. The Wall Street criminals made a lot of easy money on this one.

Peloton receives a lot of publicity over the ad and the company believes that the controversy will not hurt its holiday sales. Company executives say plenty of Peloton's will be under the Christmas tree in three weeks and the ad will not matter. One investment house downgraded PTON  but another provided an upgrade.

What excitement over a $5,000 clothes hanger. Consumers, with good intentions and high goals, purchase stationary bikes, treadmills, elliptical's and other contraptions that all end up as clothes hangers. The ony people that can buy this huge equipment is folks with big homes. The hot-shot young crowd must think Peloton is the best thing since sliced bread but you can pay less than five hundo for a stationary bicycle or treadmill up at WMT and hang your clothes on them just as easy.

The real funny part is that people pay $60? a month to use the Pelotin. Your wallet sure does lose the weight. It is reminiscent of the silly dotcom bubble days with Webvan and Pets.com. We are in the silly stage of the stock market top.

What most of you young people do not understand is that a recession is on our doorstep and all your lives are about to seriously change for the next couple years. Prepare yourself. Once a spouse loses their job in the months ahead, you are not going to be throwing $60 bucks away on Peloton per month. Keystone can hear the young folks saying "Okay, boomer", but older folks will scratch their bald heads and wonder what is the need for all that exercise equipment fanciness. Go out and run around the block for free. Get some fresh air instead of sucking in formaldehyde fumes and chemical vapors from cabinets and carpets in your sealed workout room, with your Peloton.

On the PTON daily chart, price peaks on Monday at 37 and tanks today to 33 the bottom of that green trend line. The red lines show overbot RSI, stochastics and money flow which conspire to create the spankdown today. However, the RSI, MACD and money flow all made higher highs with their indicators as price made the higher high. That says price should come back up for another higher high. The wildcard is this television commercial trouble and how much damage it may create.

Peloton is to have rumored to pull the ad but it is still running this evening. They may let the ad play since that is their target demographic; young, hip, skinny, healthy, athletic folks with money. They are probably frantically filming a new ad around the clock now, to release it as fast as possible, where the husband receives the Peloton instead of the pretty and skinny babe. Instead of a Peloton, both men and women need to do pushups to lose weight. They need to push themselves up and away from the kitchen table; this is the best way to lose weight.

Considering the Peloton business model, a stationary bike business, perhaps Keystone does not understand all the intricacies to be fair, there are probably many traders willing to short the stock, but that may lead to disappointment as seen with the goofy behavior in TSLA stock. Peloton is similar to Soul Cycle only you stay at home and do not have to smell everyone's sweaty stink at the gym.

As odd as it is, the PTON daily chart wants to print another higher higher in price and it would not be considered a short until the chart indicators negatively diverge against the higher high in price. If you are adventurous, it may set up as a short next week. Keystone will likely not play it long or short since it is a goofball company with a goofball service. "Go Peloton's!" Hahaha. That's funny. Keystone hangs his clothes in the closet so he does not need a stationary bicycle or treadmill. 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 Wednesday, 12/4/19, at 2:11 PM EST: Peloton is fighting back at all the naysayers about its ad proclaiming that 'they are disappointed in how some have misinterpreted the spot' according to a CNBC article. They are dumb; the number one rule of retail is that you do not insult your current or prospective customers. Interestingly, PTON had already recovered and was up over +5% in this morning's trade but the doubling-down by Peloton defending the skinny girl ad, reversed the stock and it is now down -5.6% on the session adding to yesterday's drubbing. Poor PTON is getting beaten with its own bicycle chain.

Note Added Wednesday, 12/4/19, at 4:06 PM EST: PTON finishes down -1.6% at 32.95. LOD 31.22. Go Peloton's! Go pelican's!

Note Added Saturday Morning, 12/7/19, at 9:26 AM EST: The Peloton drama continues. The actress in the ad at the center of the controversy is Monica Ruiz now dubbed "Peloton Wife" and "Peloton Girl." That is hilarious. PTON stock crashed -7.4% this week to 32.63; the stock had collapsed as much as -15% before recovering late in the week. PTON was up on Monday and then collapsed due to social media's criticism of the ad, printing three black crow candlesticks Tuesday to Thursday, and then a rebound on Friday. Peloton says the ad will not impact holiday sales. At least that is what they are hoping. Go Peloton's!

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


The SPX drops below the 200 EMA on the 60-minute chart at 3084 ushering in a VST (very short term; hours and days) bear market. All Hades breaks loose. The negative 200 EMA cross on the 60-minute now confirms the negative 8/34 MA cross on the SPX 30-minute chart. Hence, the bulls are slapped and beaten. Copper sinks. Volatility pops with the VIX above 17 which is above its critical 200-day MA and Keybot the Quant algorithm's key level at 15.11. Stocks collapse. As Bob Dylan would say, "It's All Over Now, Baby Blue."

Now that the 200 EMA on the SPX 60-minute at 3084 has failed; it's ovah. Equities will fall like rocks and a -5% pullback is on the table. The bulls must push the SPX above 3084 to save the day and stop the imminent carnage. The chart is setting up with possie d. You see the MACD line is weak and bleak, and the histo, so price needs another two to four candlesticks, a jog move, up, down, or up, down, up, down, to place a matching low and set the MACD up with possie d. So the S&P will bounce, say, in about an hour or three.

As the SPX comes back up, watch the 200 EMA at 3084; it is for all the marbles. If the back kiss is successful (for bears), the S&P 500 will collapse and potentially accelerate wildly lower. If the SPX comes up for the back test, and then keeps on moving higher and recovers above 3084, the stock market bulls will be fine.

Price has violated the lower band so the middle band at 3127, and dropping sharply, is on the table. Bears need to keep the SPX below 3084 and they will create bloody market carnage and misery each day ahead. Bulls need the SPX above 3084 to start building on a strong relief rally. 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 11:35 AM EST: The SPX is down an ominous 36.66 points, -1.2%, to 3077. VIX is at 16.93 retreating off the HOD at 17.99 which was one penny shy of an 18-handle. For lower lows to occur with stocks, higher highs must occur with volatility. The central banks are in there with their jack boots on the throat of volatility trying to get things under control. Treasury yields are; 2-year 1.52%, 5-year 1.52%, 10-year 1.70%, 30-year 2.15%. The 2-10 spread is 17.5 bips. The 2's-5's are basically inverted again.

Note Added 11:44 AM EST: The SPX is down 32 points, -1.0%, to 3082. VIX drops to 16.44; it is choked lower by Jerome and the gang, so equities pop. The chart indicators on the SPX 60-minute are all positively diverged except for the MACD line so a down-up move with the candlesticks will place the bottom in this 60-minute time frame; so the bottom should be in say in one or two hours, let's call it later this afternoon. The move higher will then begin and the underside test of the 200 EMA at 3084 will dictate who wins going forward. Price is at 3080 now so the bears will need to fight hard to keep it below 3084.

Note Added 12:02 PM EST: Today has lots of moving parts. The SPX 2-hour chart displays positive divergence with the RSI and stochastics indicators, as well as oversold conditions, so this supports the bounce that will be coming for the 1-hour chart. However, the 2-hour shows weak and bleak MACD line and ROC wanting to see a lower low in the SPX in this time frame. Thus, mixing the one and two-hour charts together and sprinkling on some magic dust, the SPX should bottom on the one-hour chart this afternoon. Price will likely come up and test the critical 3084 level, and fail, due to the weak and bleak indicators on the 2-hour. The SPX will then drop away from the 3084 but about four of the 2-hour candlesticks out, say in about 8 hours, which would be tomorrow morning, would be a bottom for the SPX in the 2-hour time frame. This will likely be a more solid bottom and may have a better chance to come up and attack the 3084 resistance. Markets are moving fast and will continue that way today and tomorrow. Note that Keystone's 80/20 Rule works again. 8's lead to 2's and 2's lead to 8's so the failure of SPX 3120 opened the door to 3080, which occurs. The 3082 opens the door to 3078 which occurs. Copper -1%.

Note Added 1:19 PM EST: The SPX is down 29 points, -0.9%, to 3085, one point above the critical 200 EMA on the SPX 60-minute chart at 3084. Even though bloody and bruised, the bulls cheer since they have regained the critical 3084 battleground. The SPX will probably be spanked back down for a potential more healthier VST bottom to be placed tomorrow (as discussed above). The SPX tags 3086 so the bulls are starting to puff their chests out. The fifth 65-minute trading segment of the day begins at 1:50 PM EST and the sixth and final 65-minute segment of the trading day begins at 2:55 PM EST. The stock market may experience inflection points when these time segments switch over.

Note Added 1:27 PM EST: The SPX is at 3086. The bears are trying to beef up the resistance and hold the line at 3084-3086 and push price lower. Bam. Comrade Powell and the gang jam volatility lower smacking the VIX down to 16.02, check that, bloop, 15.97, so stocks rally. The SPX recovers to 3087 starting to put distance between itself and the critical 3084 level. The Fed members are huddled around the flat screen in the conference room at the Eccles Building and shout a cheer of joy as stocks slowly ramp higher. SPX 3088. Herr Powell and the gang call the local pizza joint for a delivery. VIX 15.94.

Note Added 2:18 PM EST: Price pulls back to the key 3084 and may be sticky around here the remainder of today and tomorrow morning. VIX 16.34. It is difficult for the corrupt central bankers to keep the VIX beachball underwater. The bottom in the VIX at 15.85-ish, and the drop off the day's high at SPX 3090, both occur during the handover from the fourth trading segment to the fifth between 1:45 PM and 1:55 PM. Watch that 2:50 PM to 3:00 PM time slot for potential market excitement.

Note Added 2:23 PM EST: The SPX is down 30 points, -1.0%, to 3084. VIX 16.32.


Note Added 7:05 AM EST: The SPX finishes down 21 points, -0.666%, to 3093. The 200 EMA on the SPX 60-minute is 3084 so the bulls are in control for the VST. VIX 15.96. The bears must push the SPX below 3084 pronto or they got nothing. The MACD is weak and bleak on the SPX 2-hour so price likely needs to come back down tomorrow to the sub 3080 area and that may place a bottom in the VST. The battle for 3084 continues.