Tuesday, September 2, 2014

USD Dollar Index Daily Chart Upward-Sloping Channels

The dollar is jumping higher today tagging 83 (the chart is one-day behind) at the top rail of the upward-sloping channel. The dollar has pierced the upper standard deviation band (not shown) so a move back towards 82.0-82.50 would be expected going forward. RSI, histogram and stochastics are negatively diverged wanting the dollar to pull back for a rest, along with the rising wedge and overbot conditions, but the MACD remains long and strong so a higher high should print above 83 in the day or days ahead before a more solid pull back occurs. The pink box shows a strong uptrend in place for the dollar since June (ADX above 25) but the 50+ level is very overextended.

Price is also overextended above the moving averages requiring a mean reversion. The weekly chart has more upside available but price has gone parabolic for the last two months and desperately needs a rest. The expectation would be for the dollar to trade through 82.3-83.6 for the coming days, a few weeks, call it about one month's time, and then trend flat to lower for the months ahead but the charts will need reassessed in a couple weeks time.

The higher dollar is smacking oil and gold lower today. The euro and yen are weaker. The dollar/yen explodes higher overnight now only a hair under 105. The weaker yen creates a strong up move in the Nikkei Index overnight. The big event this week is the ECB's rate decision and press conference on Thursday morning. Draghi's words will create a wild reaction in the euro and directly affect the dollar. Traders are sending the euro lower anticipating stimulus but the October meeting is a more likely target for Draghi to fire the money bazooka. The level of shorts against the euro are at the highest levels in a couple years. Even the cab driver said he took his entire life savings and is shorting the euro so obviously the risk on Thursday morning is that Draghi under delivers and the euro catapults higher and dollar drops. This behavior would sync up with the chart above that will want a  pull back after the MACD line negatively diverges (which could set up over the next couple days). 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, August 31, 2014

EEM Emerging Markets Weekly Chart Sideways Channel Overbot Rising Wedge Negative Divergence

EEM is another favorite flavor of long traders nowadays as everyone is flush with central banker cash looking for another suitcase to stuff. Emerging market were in a multi-year sideways funk through the 35-43 channel until 3 and 4 months ago when price broke up and out of the 43-44 area. As a result, many are waving banners with EEM letters saying the breakout will lead to wildly higher prices ahead. The chart disagrees.

The breakout is important since a multi-year ceiling gave way, however, an important top is at 45-ish from 2011 so in essence price continues through a larger sideways 5-year 34-45 channel. The red lines show universal negative divergence across all indicators both in the couple-year time frame and the shorter-term few week time frame. The current action shows price climbing up into a rising wedge and stochastics are overbot coming off higher levels both favoring the bears. Watch for the MACD line cross and that will tell you that EEM is cooked, or not.

Projection is for EEM to top out at 45-48 over the coming days or week or three and then roll over down to a back kiss of the 43-44 area and likely move down into the long-term sideways channel through 35-43. The EEM bears need the negative MACD line cross. If the MACD lines remain positive price will coninue drifting higher. The volume of the selling weeks are far larger than the buying weeks. Perhaps the smart money is pumping and dumping. Pundits are cheer leading the emerging market stocks daily and may be sneaking out the back door as Ma and Pa takes their entire life savings and buys EEM always showing up late to the party. 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.

SSEC Shanghai Index China Weekly Chart Sideways Channel

The SSEC has exploded higher in recent weeks causing traders to chase the latest shiny object. The blue sideways symmetrical triangle has 180 points as the vertical side so the upside target after the breakout at 2055 is 2235; bingo. So the triangle pattern is satisfied. Price is at the top rail of the longer term sideways channel through 1980-2260. Many traders are proclaiming the all-clear for China but may be disappointed as the weeks play out.

SSEC is moving sideways without an up or down trend through 2013 into 2014. The pink standard deviation lines squeezed in for a big move which resolved upwards two months ago. Since the central banker money has to flow somewhere, and SSEC had been beaten down in a malaise, and the PBOC (China's Central Bank) keeps adding stimulus as well, the tight band squeeze sends price higher. The indicators are long and strong except for the ROC. The stochastics are overbot at high levels with very little further space higher available. The RSI squeezes out a higher high than the early 2013 high which is bullish that will want to see a higher high in price going forward.

On the bear side, price has seriously violated the upper band so a move back to the middle band at 2089 is on the table as well as the lower band at 1937. The 1937 is under the lower line of the long-term sideways channel. The SSEC still has upside strength available but the move should be more sideways to sideways up rather than parabolic like July. The projection would be for price to top out in the 2250-2300 area, in the vicinity of the upper channel line, say over the next month but will then roll over again and return to the long-term channel targeting the 2090-2140 area as an initial downside target. 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.

TSLA Tesla Weekly Chart Overbot Negative Divergence Sideways Channel

TSLA is a clear outperformer running from under 20 to 272 in four years, +1260%. In the last 17 months, price moves from 40 to 272, +580%, a seven-bagger. The red lines show the negative divergence, overbot conditions and rising wedge that created the February-March top and spank down. The histogram wanted to see another high so price came up for that higher high. With the new all-time high at 272, the dark red lines show universal neggie d across all indicators.

Price has also pegged the upper standard deviation line at 269 so a move back to the middle band at 222 is on the table as well as the lower band at 175. The sideways range through 175-275 is a reasonable expectation going forward. In the VST, the MACD line and stochastics are trying to squeeze out some more upside juice for price but that may only delay the top for a week or two. If you enjoyed the trip higher and held on for these new highs, now would be the time to scale-out moving forward.

Perhaps Tesla is only one car fire away from its chart dropping. TSLA is no longer set up for the long side. Sure some more juice may be squeezed but it is like picking up nickels in front of a bulldozer. Projection is for price to top out in the week or three ahead and travel down to 175-190 where it will bounce and maintain the sideways channel. An 80 or 100-point drop over the weeks and months ahead would be a -30% pull back but no biggie considering the stock is up +580% over the last 1-1/2 year. 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 Weekly Chart Overbot Rising Wedges Negative Divergence Fractals Price Extended

The SPX weekly chart is negatively diverged across all indicators and would be fully agreeable to rolling over right now and trending lower for weeks and months ahead. One fly in the bear ointment would be a positive cross for the MACD lines. The prior fractals for the MACD are shown in the blue boxes. This area is where price topped out in th eprior blue boxes. The caveat would be if the MACD positive cross occurs then the top will likely print at 2010-2030.

The large volume weekly candlestick at the end of July as price was plummeting should be retested so a move into the 1900-1970 area would be prudent to see if volume appears for the bulls, or not. Price is back testing the trend lines from the rising wedge patterns. The daily chart is topping out but may play around for a few more days first so this behavior would be in sync with the weekly chart topping out now or in the week or two ahead. Price is extended above the moving averages requiring another mean reversion (pink dots). Note the pink dots are consistent with the fractal boxes and would project a top anytime between now and a week or two.

So the projection is for the SPX to roll over for lower prices for weeks and months to come, however, if the positive MACD line cross occurs, the SPX should stay elevated at 2010-2030 for a couple extra weeks then roll over for lower prices for weeks and months to come. 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 Daily Chart Overbot Negative Divergence Developing

The daily chart is negatively diverged across both the longer three-month period and the very short term except for the MACD line and potentially the RSI in the VST. So price will need to pull back right away or say in a day or so, then will want to come back up for another look at current price levels then likely roll over. The intraday all-time record high at 2005.04 printed on Tuesday, 8/26/14, was created with the gravestone doji candlestick. Since then, the next three candlesticks are a doji, doji, and a hanging man for Friday. All four candlesticks indicate a trend change in price on tap but follow-through is needed to the downside for verification.

The RSI is important since if it climbs back up into overbot territory at 70+, the SPX is likely going to top out in the 2020's. The upper standard deviation band is at 2025 and has not yet been touched; this band may trend lower in the days ahead. The 1.24% Fibonacci extension for the move down from late July to early August that retraced 100% is the 2010-2015 level. The upper and lower red trend lines are interesting since they are squeezing price in for an up or down decision on Tuesday or Wednesday (markets are closed on Monday).

If the SPX moves higher in price, it is doubtful the money flow, stochastics and histogram would reverse their bearish slope lower. Markets are very news-driven nowadays in fact the whole rally from the 1905 bottom is on Russia and central banker happy talk. The bottom occurred when Putin said he wanted to seek a peaceful solution in Ukraine. No doubt that Russia had bot a boatload of calls before they goosed the markets with words. Putin gave the rally a second bump at about 1950. Then the Jackson Hole push came with ECB President Draghi hinting at stimulus coming as soon as this Thursday, 9/4/14, and voila, instant rally. Equities continue to be driven higher by the central banker money printing.

The upside resistance is the all-time high at 2005 and the support below is 1990-1991 and then 1985-1986. The 1940-1960 area is the zone where the bulls and bears fought it out intensely with the red doji candlestick displaying equal shadows 11 trading days ago. This zone represents the strong selling volume candlestick and it would be prudent for price to come down into this zone to print a new volume candle and decide if the bulls are stronger to bounce price and head back up to the highs or if the bears are stronger to take price lower. Volume is validity.

The projection is for the SPX to top out at anytime in the days ahead. The upside 2010-2015 and 2020-2030 levels have to be respected. The daily chart will be able to tell a lot more after Tuesday and Wednesday play out especially in respect to the RSI. The SPX weekly chart is negatively diverged across all indicators and would be fully agreeable to price rolling over right now and trending lower for weeks and months 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 Support, Resistance (S/R), Moving Averages and Other Important Levels for Trading the Week of 9/2/14

SPX support, resistance (S/R), moving averages and other important levels are provided for trading the holiday-shortened week of 9/2/14. Levels shown in bold are strong resistance and support. Bold and underlined levels are very strong and important S/R. The SPX closing and intraday all-time highs from late July were taken out last week. The SPX all-time intraday high is 2005.04 on 8/26/14 and the SPX all-time closing high is 2003.37 on 8/29/14. The bulls are relentless and merciless against the bears. The non-stop stock market upside is fueled by perpetual central banker easy money.

Since price closed at the highs on Friday, any smidge of green in the overnight futures for Monday evening (US markets are closed on Monday for the Labor Day holiday) will catapult the SPX to 2010 and higher. The bears must push under 1995 to create a downside acceleration that will quickly test the strong 1990-1991 support level. A price move through 1996-2003 is sideways action for Tuesday.

The new month of September begins at 2003.37 and money typically flows into the stock market to start a new month. Fireworks will occur on Thursday morning with the ECB Rate Decision and Press Conference at 7:45 AM EST and 8:30 AM EST, respectively. On Friday, the Monthly Jobs Report is released providing the grand finale for the week. The SPX is extended above its moving averages. The daily chart candlesticks for the last four days are interesting with a gravestone doji on 8/26/14 (marking the top) when the all-time high was printed, then a doji, doji, then a hanging man candlestick on Friday, all indicating a change in trend but follow-through to the downside would be needed for verification.

The bulls appear unstoppable and are now in frenzy salivating over the easy money heroin that ECB President Draghi is planning to distribute on Thursday; another central banker drug pusher keeping the long addicts alive. As long as the central bankers keep goosing markets, astute long traders will keep raping the upside for all its worth. The 1990-1991 level is very strong support and the bears would need failure here to prove they can take markets lower. The 1990-1991 failure would lead to a test of 1985-1986 and if that fails, price will drop into the low to mid 1970's.

According to Keystone's proprietary algorithm, Keybot the Quant, copper and volatility are dictating broad market direction currently. Watch JJC 38.77 and VIX 12.53 for clues (bulls need higher copper; bears need higher volatility).

2005 (8/26/14 All-Time Intraday High: 2005.04) (8/26/14 Intraday High for 2014: 2005.04)
2005.04 Previous Week’s High
2003.38 Friday HOD
2003.37 Friday Close – Tuesday Starts Here
2003.37 September Begins Here
2003 (8/29/14 All-Time Closing High: 2003.37) (8/29/14 Closing High for 2014: 2003.37)
1994.65 Friday LOD
1991 (7/24/14 Intraday Top: 1991.39)
1990.52 Previous Week’s Low
1988 (7/24/14 Closing High: 1987.98)
1986 (7/3/14 Intraday Top: 1985.59)
1985 (7/3/14 Closing High: 1985.44)
1971.06 (200 EMA on 60-Minute Chart a Keystone Market Turn Signal)
1968 (6/24/14 Intraday Top: 1968.17)
1966.28 (50-day MA)
1963.35 (20-day MA)
1963 (6/20/14 Closing High: 1962.87)
1956 (6/9/14 Intraday Top: 1955.55)
1951 (6/9/14 Closing High: 1951.27)
1935.62 (20-week MA)
1930.97 (100-day MA)
1924 (5/30/14 Intraday Top: 1924.03) (5/13/14 Closing High: 1923.57)
1902 (5/13/14 Intraday Top: 1902.17)
1900.83 (150-day MA; the Slope is a Keystone Cyclical Signal)
1897 (5/13/14 Closing High: 1897.45) (4/4/14 Intraday Top: 1897.28)
1891 (4/2/14 Closing High: 1890.90)
1887.03 (10-month MA; a major market warning signal)
1884 (3/21/14 Intraday Top: 1883.97) (3/7/14 Intraday Top: 1883.57)
1878.82 (200-day MA; not tested for 20 months extremely odd behavior)
1878 (3/7/14 Closing High: 1878.04)
1859.04 (12-month MA; a Keystone Cyclical Signal) (the cliff)
1854.68 (50-week MA)
1851 (1/15/14 Intraday Top: 1850.84)
1849 (12/31/13 Intraday High Top for 2013: 1849.44)
1848.36 Trading for 2014 Begins Here
1848 (1/15/14 Closing High: 1848.38) (12/31/13 Closing High for 2013: 1848.36)

Saturday, August 30, 2014

INDU Dow Industrials Monthly Chart Overbot Rising Wedge Negative Divergence Price Extended

The prior SPX monthly chart shows a long and strong MACD line for the last few months that will want to see another high for the SPX price after a pullback occurs. The COMPQ (Nasdaq) monthly chart is set up the same as the SPX. The RUT monthly chart has already rolled over and received the spank down off the top with its negative divergence. Interestingly, the Dow chart above has now locked in universal neggie d across all indicators after the new all-time intraday high printed at 17153.80 last Tuesday. The MACD is negatively diverged so the Dow has ran out of gas.

The RSI may sneak up into overbot territory again if the SPX and COMPQ keep goosing equities higher but the RSI should remain negatively diverged compared to the December 2013 high and the 2007 top. Ditto the money flow. What does all this mumbo-jumbo mean? The Dow should roll over from here and it is likely that the Dow has printed a multi-year top or will in the days ahead. The pink dots show what happens when price becomes overextended above the moving averages; a mean reversion. The red rising wedge is extremely ominous since the failures from rising wedges can be quite dramatic.

The projection is for the Dow to receive the negative divergence spank down in September. After equities sell off and a bounce occurs, the SPX and COMPQ should come back up to the current levels for one last look, however, the Dow has no interest in printing any further higher highs in price. THE top may be in for the Dow which follows THE top in the RUT placed in July with the intramonth high and bearish engulfing monthly candlestick. So the Russell 2000 small caps rolled over first, Dow should be next then the SPX and Nasdaq. The chart forecasts the Dow to roll over moving forward for the weeks, months and potentially year or two ahead. These are monthly charts so give or take a few weeks but a prudent call is that equities are printing a multi-year top with all indexes likely peaking and rolling over within the coming weeks. 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 Monthly Chart Overbot Rising Wedge Negative Divergence

The monthly charts receive new prints on Friday as the last day of August trading occurs. The SPX is up six of the last seven months and up 10 of the last 12 months. The central bankers can throw one heck of a party with the easy money from the Fed, BOJ and other printing presses flooding into markets pumping equities higher to make the rich, that own stocks, richer. The people in power are simply making themselves wealthier and to H*ll with the rest of the country especially the middle class, now the lower middle class, and poor. No matter how much the Fed and democrat and republican politicians wax faux worry about the lack of jobs and such, they are fully aware of what they are doing and how it is lining their own pockets where they will never have to worry about finances in their personal lives ever again.

Last month, we were continuing to look for upside since the indicators were not completely negatively diverged to identify the multi-year top. The bulls keep finding ways to squeeze out juice (the rich uncle that constantly saves the day is the central bankers) and the MACD line still has a sliver of bull juice available to create additional highs in the SPX after a selloff occurs. The rising maroon wedge is extremely ominous since the collapses from rising wedges can be quite dramatic. The long holders will be whacked as the weeks and months play out. The overbot conditions, rising wedge and negative divergence (sans the MACD in the VST) all indicate a substantial top is forming and nearly in place. If the SPX would not have closed the month at the highs, the MACD line may be negatively diverged right now which would identify the multi-year top but instead the bulls are going to stretch it out for a couple more months due to the long and strong MACD line. The neggie d with RSI, histogram and stochastics, however, will slap the SPX south for an initial spank down in September.

The chart set-up forecasts a lower September, or September-October, then move back to current levels for October-November, which would be the multi-year top where prices will then trend lower for months and perhaps years ahead. October has a reputation as the crash month but there probably needs to be two candlesticks to create the neggie d on the MACD so perhaps late October or early November may be more likely for THE top. Note that for the ADX, the downtrend in 2008-2009 was stronger than the current 5-1/2 year rally uptrend. The market top will be identified by the ADX rolling over to the downside. Volume is weaker and weaker as time moves along. A more selective group of stocks, such as AAPL, are driving the upside on thinner volume which is a bearish signal.

The bulls have a smidge of juice remaining due to the MACD line. The forecast is a pull back over the next month or two, then back up for another look at SPX 2000, where the MACD will roll over and the multi-year top will be in place. It will not be long for the bears; they will finally receive their retribution for the central banker 5-1/2 year rally in the weeks and months ahead. Equities should place the multi-year top, like 2000 and 2007, at any time over the next few weeks or two months as soon as the MACD line rolls over. As markets drop in the weeks and months ahead and the selling exceeds -10% for a correction, the long holders will probably start dumping positions unwilling to relinquish the obscene gains in recent years which will accelerate a down move and likely expose the air pockets underneath. There is likely from 15% to 80% fluff in the stock market due to the central banker intervention that has destroyed price discovery across all asset classesWatch the 10 and 12 MA's very important market levels. The bear's day in the sun will be coming very soon; pay attention to the MACD line rollover. 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.

Friday, August 29, 2014

SPX 30-Minute Chart 8/34 MA Cross Sideways Symmetrical Triangle Tight Squeeze on Standard Deviation Bands

When a month is strong, it tends to finish weaker which occurs with the top on Tuesday and a drift sideways to sideways lower since. Seasonality-wise, the couple days in front of a three-day holiday weekend tend to be bullish. Today is typically about a 70% bullish day. So the bulls may be able to muster up some bullishness into the weekend.

The 8 MA remains below the 34 MA signaling bearish markets for the hours ahead. Bulls got nothing unless the receive the positive 8/34 cross. The 8 MA is at 1997.20 so bears need the SPX below 1997 to keep this moving average moving lower while bulls need the SPX above 1997 to send the 8 MA higher to provide a positive 8/34 cross. The tight standard deviation bands (green) are squeezing in tight for a big move (in this 30-minute candlestick time frame). The blue sideways symmetrical triangle is in play reinforcing the deviation bands also predicting a strong move one way or the other. The vertical side of the triangle is 15 to 17 handles thus, if bulls win with a move above 1998 then 2013-2015 is targeted. If bears win with a move under 1995 then 1978-1980 is targeted. The triangle only has space for one to three more candlesticks so a winner will likely be christened today leading to a happy finish to the week ahead of the holiday for one side at the expense of the other.

Keybot the Quant remains long but almost flipped short yesterday. If the VIX moves above 12.54 today, Keybot will likely flip short. VIX is currently at 12.30. Volatility and copper are dictating market direction currently. Bears win big if VIX moves above 12.54. Bulls win big if JJC moves above 38.79. There should be a big move on tap today unless bulls and bears can line things out dead flat from here delaying the move until Tuesday's opening bell. Equities will travel sideways today with a slight upward bias if VIX remains bullish and JJC remains bearish (which is the current price action in real-time now). This would set up the big move for Tuesday morning (US markets are closed on Monday in Observance of the Labor Day holiday). Markets finished strongly higher the day before the Independence Day holiday only to be bludgeoned when traders returned to work the following week nursing hangovers. The Labor Day holiday may follow similar behavior to the July 4th holiday?

Watch the bull breakout level at 1998-2001 and bear break down level at 1994-1996. The SPX would flush lower if the 1990-1991 support is lost. The SPX will accelerate higher if the all-time high resistance at 2005 is taken out. 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 11:14 AM:  The JJC is 38.37 remaining firmly bearish under the 38.79 bull-bear line in the sand. The VIX is 12.15 retreating lower remaining below the 12.54 bull-bear line in the sand providing upside bull juice. The SPX is at 1999, now 2000, threatening to break out higher as discussed above. The TRIN is 0.87 firmly in the bull camp helping create market buoyancy today. The beat goes on. Watch the HOD at 2001.35 which will open the door to 2005 and the path higher. Bears need to push volatility higher immediately and prevent the SPX 2001 handle from printing.

Note Added 5:53 AM on Saturday, 8/30/14: The bulls slap the bears in the face again, as is typically the case. A late days surge higher finishes the day with the SPX closing at the highs at 2003.37. The 8 MA crossed up through the 34 MA at 11:30 AM only fifteen minutes to one-half hour after the last message placing the bulls in charge of markets for the hours ahead; the fix was in. The pre-holiday bullishness carries the day verifying the 70% bullish seasonality expected for yesterday. Since the surge occurred at the very end of the day to move the bulls up through the 1998-2001 breakout area, the bears have a sliver of a door opening available on Tuesday morning to create negativity with a negative news flow over the weekend. If the geopolitics are stable, the bulls will continue running higher to the 2013-2015 target and at that point the 2020's are likely. The bears can revese the positive thrust higher if they prevent a breach of the all-time high at 2005. If 2005+ prints, the SPX is likely on its way to 2013-2015. JJC ends at 38.34 well below the 38.79 line in the sand continuing to cause market negativity. Bulls need higher copper or they will stall. VIX ends at 11.98, under 12, and well under the 12.54 line in the sand causing market bullishness. Note how the bears made a run in the afternoon pushing VIX all the way up to 12.44; only one more dime and markets would have sold off hard into the weekend, instead, the bears are slapped in the teeth and volatility drops like a stone during the last hour of trading creating the bull fuel for the upbeat bull finish. The newspaper and headline writer's are happy since the SPX 2K printed and this can be hyped all weekend long. The SPX continues the trend higher, however, the bulls will have limited juice unless they can push copper higher.