Sunday, September 18, 2016

Quarterly Reminder September 2016

It's time for the Quarterly Reminder,

The KE Stone blogs (Keybot the Quant; Keystone Speculator; Keystone the Scribe) generate huge international interest with thousands of daily followers and continue to increase but the support does not match the strong interest. At the same time, ad blocking software continues to destroy free original content on the internet.

Daily updates to the Keystone the Scribe website are suspended but the Daily Chronology of Global Markets and World Economics monthly publications will continue through Amazon. The September Daily Chronology 2016-09 will be published and available internationally on 10/1/16. The October release is tentatively set for a 11/5/16 publication date.

The Keybot the Quant algorithm updates are suspended. Ditto all the charts and valuable technical analysis on the Keystone Speculator site. The support for the sites do not match the thousands of daily users. Proceeds from the blogs go to charity.

Thursday, September 15, 2016

VIX Volatility Daily Chart

The VIX slips under the important 200-day MA at 16.72 ushering in bullish markets for the hours and days ahead. Bulls win below 16.72. Bears win above 16.72.

Keybot the Quant identifies XLF 23.84 as a key bull-bear line in the sand. Price is at 23.88 which creates lift in the broad stock market. Thus, bulls have lower volatility and higher banks on their side. Bears got nothing unless they push VIX above 16.72 and XLF below 23.84. 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 11:47 AM EST: VIX 16.29. XLF 23.92. SPX 2142.

Tuesday, September 13, 2016

SPX S&P 500 2-Hour Chart

The SPX is printing at 2124. From the SPX S/R article on the weekend, S/R in this area shown by the brown lines is 2169, 2164, 2160, 2156-2157, 2152, 2135, 2131, 2129, 2126, 2123, 2121 and 2118. The 100-day MA is 2121 and the 20-week MA is 2123. Price is testing the critical 2123 level for a bounce or die decision.

Note the positive divergence (green lines) for the indicators that want to see price bounce and recover. The MACD line, however, is weak and bleak. Thus, some buoyancy in price should occur in this 2-hour time frame then price will come back down again, and, if the MACD line is positively diverged at that time, the near-term bottom will be in place. The 1-hour chart is set up to bounce with possie d across all its indicators.

The expectation would be for the SPX to recover, say, after a bottom is placed either before the closing bell today or shortly after tomorrow's open. The bottom can occur at anytime. Stocks are usually bullish from a Tuesday low to a Wednesday high during OpEx week so price may want to bottom today and perhaps rally into tomorrow afternoon. Keystone bot some index longs a few minutes ago to play this counter trend rally perhaps beginning at any time forward. It would be expected to be a quickie long trade maybe only a day or so. If stocks collapse, Keystone will ditch the longs and make a run for it.

The lower standard deviation band is violated so the middle band at 2157 and falling is in play. The 2156-2157 level is key S/R. A near-term bounce may target this level. The 50-day MA is 2166. The critically-important 200 EMA on the 60-minute chart at 2166 will need back kissed at some point forward.

Keybot the Quant identifies XLF 23.84 as the key line in the sand today. XLF is holdinig at 23.90. You will know that stocks will slide down the rabbit hole if XLF 23.84 fails. If XLF floats higher, then the above analysis would be likely where stocks will recover at anytime and rally for a few hours forward. 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 3:15 PM EST: Stocks weaken and are at the lows. SPX is at 2122.78 with a LOD at 2120.27. XLF is 23.86 fighting at the important 23.84 level. VIX is 18.69 not printing higher than the high at 18.97 about an hour ago.

Note Added 3:32 PM EST: SPX 2130. XLF 23.93. VIX 18.26.

SPX &P 500 60-Minute Chart 200 EMA Cross

Stocks should remain bearish for the hours and days ahead with the SPX under the 200 EMA at 2169. Bulls got nothing unless they move SPX above 2169.

The brown lines show a sideways channel at 2164-2185 in play. Price fell through the bottom rail and then recovered to back kiss the bottom trend line yesterday. The indicators are long and strong wanting to see matching or higher price highs once any pull back occurs in the hourly time frame so it appears that a test of the critical 200 EMA at 2169 is likely. Price will bounce or die from the 200 EMA and tell the story forward.

Key S/R is 2169-2171 (200 EMA on 60-minute 2169September begins at 2171), 2164-2165 (price resistance 2164; 50-day MA at 2165), 2156-2157, 2152 and 2135. The SPX begins Tuesday at 2159.

During OpEx each week, stocks usually rally from a Tuesday low to a Wednesday high. The full moon is Friday and stocks are typically bullish moving through the full moon. 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 at 2:28 PM EST on Tuesday, 9/13/16: Stocks take back Monday's gains. The SPX is printing at 2124 so it fell down through the support levels listed. From the SPX S/R article on the weekend, S/R in this area is 2135, 2131, 2129, 2126, 2123, 2121 and 2118. The 100-day MA is 2121 and the 20-week MA is 2123. Price is testing the critical 2123 level for a bounce or die decision.

Monday, September 12, 2016

VIX Volatility and RUT Russell 2000 Daily Charts at Key Pivot Points

As the market bulls stage a small comeback rally after Friday's drubbing, the jury remains out as to whether the rally has staying power. The two parameters above determine today's market fate.

Volatility will provide an up or down signal at the VIX 200-day MA at 16.70. Price came down to test, and slipped under to a LOD at 16.55 but recovered now back above at 17. Market bears win if VIX is above 16.70. Market bulls win if VIX drops under 16.70.

The RUT 50-day MA at 1219 also provides market drama. Price is sticky at this level deciding to bounce or die. As small caps go, so goes the markets.

Thus, if the VIX drops under 16.70 and RUT moves above 1219, the bulls will throw confetti since the selling is over and the rally will gain steam higher. If VIX remains above 16.70 and the RUT starts to stumble lower under 1219 the bears will begin growling strongly again. 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 11:04 AM EST: The VIX is at 16.78 and the RUT is at 1220. The mixed signals create a sideways stumble for stocks. Bulls need 8 more pennies lower in the VIX to claim victory ahead. Bears need to push the RUT back under 1219 or they will fold like a cheap suit. The SPX is at 2136 trying to punch up through the very strong 2135 resistance (reference the SPX S/R article from the weekend). Bulls will recover nicely if they can hold the S&P 500 above the important 2135 S/R so watch this level along with VIX 16.70 and RUT 1219.

Note Added 11:13 AM EST: VIX 17.00. RUT 1220. SPX 2135. The beat goes on.

Note Added 11:49 AM EST: VIX 16.54. RUT 1224. SPX 2140. The bulls tentatively celebrate the pivots in their favor by throwing small amounts of confetti.

Note Added 7:31 AM EST Tuesday Morning, 9/13/16: The bears were slapped in the face yesterday as the VIX failed through the 200-day MA at 16.70 and RUT jumped higher above 1219. The SPX punched up through the strong 2135 resistance and the bears were toast. Key S/R is 2169-2171 (200 EMA on 60-minute 2169; September begins at 2171), 2164-2165 (price resistance 2164; 50-day MA at 2165), 2156-2157, 2152 and 2135. The SPX begins Tuesday at 2159.

Sunday, September 11, 2016

SPX S&P 500 Support, Resistance (S/R), Moving Averages and Other Important Levels for trading the Week of 9/12/16

SPX (S&P 500) support, resistance (S/R), moving averages and other important levels are provided for the trading week of 9/12/16. 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 prints on Monday, 8/15/16, at 2193.81. The all-time closing high is 2190.15 on 8/15/16. The SPX has taken out the May 2015 highs after this stock market top held in place for 15 months. The bulls were correct to expect new highs in stocks as new records were printed one month ago. The bulls, however, receive a firm slap in the face last Friday with the 53-point drop in the S&P 500 (SPX) and nearly 400-point drop in the Dow Jones Industrials (INDU; DJI). 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 for this year is the 2193.81. The closing high for this year is at 2190.15. The intraday low for this year is 1810.10 on 2/11/16 and the closing low thus far 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. Obviously, a failure under the 1810-1868 zone would lead to a further catastrophic path ahead for stocks.

The SPX finished August printing a negative month. The SPX begins September at 2170.95. The SPX is at 2128 which is 84 points, +4.1%, above the starting year number at 2044. The central bankers saved the markets in February and the coordinated global money printing creates the multi-month rally into the top one-month ago. The central bankers are the market. Always.

Last Friday, 9/9/16, long investors were smacked in the face with a 2x4 (a piece of wood). On the top side, that 2183-2186 area is very strong resistance; it stopped the bull’s upside hopes. Price failed from this area. The SPX lost the important 200 EMA on the 60-minute chart at 2171 on Friday which ushers in bearish stock market action for the hours and days ahead. The bulls are in trouble as long as the SPX remains under 2171. The low CPCE put/call ratio chart verified the rampant market complacency so traders were slapped back to reality as was forecasted.

Once the 2169-2171 level failed, it was over. Price collapses to the strong support and 50-day MA at 2164 and fails. The SPX then falls through very strong and sturdy support at 2135, 2131 and 2129, that is now very strong resistance. The 2118-2135 range is a very solid support area for the S&P 500. The 2126 support holds during Friday's carnage. If the 2121-2126 level fails, price will be at 2118 in a flash for a critical bounce or die decision. If price moves lower from 2118, then it is likely headed sub 2K. The SPX will drop from 2118 to 2110 to 2102 and then to 2094. The 2072 level is the cliff for markets; under here and stocks can easily go into free fall.

For the new trading week ahead, Monday, 9/12/16, with the S&P 500 beginning at 2128, the bears need any smidge of red in the S&P futures overnight into Monday morning, and the SPX will accelerate several handles lower after the opening bell. The bulls need to recover Friday’s losses to regain their mojo, a formidable task, so instead bulls will try to send volatility lower while pushing utilities, chips and commodities higher. A move through 2129-2185 is sideways action to begin the week.

This week is OpEx with Quadruple Witching on Friday. Stocks are typically bullish from a Tuesday low to a Wednesday high during OpEx week. A full moon, the Harvest Moon (cue Neil Young), peaks on Friday at 3 PM EST. Stocks are typically bullish moving through the full moon each month. The seasonality factors point to buoyancy in stocks from Tuesday to Wednesday and then from late Thursday into next Monday, however, any news event or central banker action will immediately override any seasonality factors. Thus, the bears may flex their muscles to begin the week with a potential low occurring on Tuesday.

Looking at the near-term picture the strongest price support/resistance is 2194, 2190, 2183, 2175-2178, 2169-2171, 2164, 2156-2157, 2152, 2135, 2131, 2129, 2126, 2121-2123, 2118, 2110, 2102, 2094, 2089 and 2079-2083.

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

2194 (8/15/16 All-Time Intraday High: 2193.81) (8/15/16 Intraday High for 2016: 2193.81)
2190 (8/15/16 All-Time Closing High: 2190.15) (8/15/16 Closing High for 2016: 2190.15)
2187.87 Previous Week’s High
2177.60 (20-day MA)
2170.95 September Begins Here
2170.54 (200 EMA on 60-Minute Chart a Keystone Market Turn Signal)
2169.08 Friday HOD
2163.83 (50-day 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)
2127.81 Friday Close – Monday Starts Here
2127.81 Friday LOD
2127.81 Previous Week’s Low
2126 (4/27/15 Intraday High: 2125.92)
2124 (6/23/15 Closing High: 2124.20)
2121 (4/24/15 Intraday High: 2120.92)
2120.16 (100-day MA)
2120 (2/25/15 Intraday High: 2119.59)
2119.75 (20-week MA)
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 (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)
2094 (12/29/14 Intraday High: 2093.55)
2091 (12/29/14 Closing High: 2090.57)
2079.48 (150-day MA; the Slope is a Keystone Cyclical Signal)
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)
2072.45 (12-month MA; a Keystone Cyclical Signal) (the cliff)
2071 (11/21/14 Intraday High: 2071.46)
2070.96 (10-month MA)
2064.69 (20-month MA)
2057.32 (200-day MA)
2056 (11/18/14 Intraday High: 2056.08)
2055.76 (100-week MA)
2054.51 (50-week MA)
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)
1999.14 (150-week MA)
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)
1924 (5/30/14 Intraday Top: 1924.03) (5/13/14 Closing High: 1923.57)
1902 (5/13/14 Intraday Top: 1902.17)
1897 (5/13/14 Closing High: 1897.45) (4/4/14 Intraday Top: 1897.28)
1895.53 (200-week MA)
1891 (4/2/14 Closing High: 1890.90)
1884 (3/21/14 Intraday Top: 1883.97) (3/7/14 Intraday Top: 1883.57)
1878 (3/7/14 Closing High: 1878.04)
1871.02 (50-month MA)
1868 (8/25/15 Closing Low: 1867.61)
1867 (8/24/15 Intraday Low: 1867.01)
1859 (1/20/16 Closing Low: 1859.33)
1851 (1/15/14 Intraday Top: 1850.84)
1849 (12/31/13 Intraday High Top for 2013: 1849.44)
1848 (1/15/14 Closing High: 1848.38) (12/31/13 Closing High for 2013: 1848.36)
1829 (2/11/16 Closing Low for 2016: 1829.08)
1814 (11/29/13 Intraday Top: 1813.55)
1812 (12/9/13 Intraday Top: 1811.52) (1/20/16 Intraday Low: 1812.29)
1810 (2/11/16 Intraday Low for 2016: 1810.10)
1809 (12/9/13 Closing Top: 1808.37)
1807 (11/27/13 Closing Top: 1807.23)
1799 (11/18/13 Intraday Top: 1798.82)
1798 (11/15/13 Closing Top: 1798.18)

Saturday, September 10, 2016

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

Keystone was warning about the potential failure of the 200 EMA on the 60-minute at 2171. It failed and price never looked back. Markets will be bearish for the hours and days ahead as long as the SPX remains below the 200 EMA at 2171 and moving lower.

The indicators are weak and bleak but oversold so a bounce is needed in this hourly time frame. Typically price would bounce and then roll back over to the downside again for a lower low due to the weak and bleak MACD line. At that point, in this hourly time frame, a more substantive relief rally may begin.

The full moon, the Harvest Moon, is on Friday and stocks are typically bullish through the full moon. OpEx is this week and stocks typically rally from a Tuesday low to a Wednesday high during OpEx week. So a mosaic develops, only based on the seasonality factors, where weakness in stocks may continue into Monday afternoon and Tuesday morning, then a recovery through Wednesday, then another quick dip on Thursday, but then a recovery into the weekend. Of course news events always override seasonality factors.

The brown lines show the gap up in early September that created an island (brown circle); you can call it Gilligan's Island. Price fell and gapped back down through the same gap creating the island reversal pattern. Pay attention to the 200 EMA especially as the new week of trading progresses. This information is for educational and entertainment purposes only. Do not invest based on anything you read or view here. Consult your financial advisor before making any investment decision.

SPX S&P 500 Daily Chart Tight Band Squeeze Rising Wedge Collapse

Keystone has highlighted the tight standard deviation band squeeze (purple) over the last couple weeks. it was odd behavior for that tight tunnel to continue for one month before price resolved to the downside. Tight bands do not predict direction only that a huge move is about to occur and it was obviously down. The bottom band is violated so the middle band is in play when price decides to stage a relief rally.

The collapses from rising wedges can be quite dramatic. Keystone says this often so it is notable to highlight the pattern in the chart above. Price fell out of the rising wedge a few days ago, then came back up for a back test of the underside of the lower red trend line of the wedge, and then failed and collapsed. Remember, all chart patterns work the same in any time frame whether the rising wedge is on a monthly chart, weekly, daily, hourly or minute chart.

Watch the 100-day MA support at 2120 since the week ahead will likely entertain drama at this key moving average. The 20-week MA is also at 2120 giving this level further street cred as a key pivot point (bounce or die). The bears flex their muscles on Friday and wipe out two months of stock market gains in a heartbeat. The low CPCE put/call ratio forecasted the pull back ahead of time so all of you were prepared for the market theatrics. 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 Daily Chart Battle at 200 MA

An extremely important event occurred yesterday in the market carnage. The VIX moves above its 200-day MA at 16.70 signaling bearish markets for the days ahead. One day does not make a trend so the bulls may push the VIX back under early next week. Bears win with the VIX above the 200-day and bulls win with the VIX under the 200-day MA.

The Keybot the Quant trading algorithm is short currently and tracking the VIX 14.53 level as a key bull-bear line in the sand. If the bulls push the VIX under 16.70, stocks will stage a comeback rally. The bulls, however, will need to push under 14.53 to signal the all-clear for a strong stock market rally ahead. Bears are fine going forward as long as they maintain the VIX above 14.53.

In the very near term, watch VIX 16.70. On Monday, it does not matter which way the stock market moves. Watch the VIX instead and it will be online after 3 AM EST. VIX 16.70 will tell you who wins and loses on Monday. 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, September 8, 2016

CMG Chipotle Mexican Grill Weekly Chart

La Cucaracha, La Cucaracha. Everbody sing for the burrito king. Hopefully, there are no cockroaches in the restaurants. Activist investor Bill Ackman at Pershing Square announces a large stake in troubled Chipotle so the stock pops. Folks became sick after eating the food a few months ago and the restaurateur struggles ever since. Tell that to my nephew who religiously devours the Mexican goodies at Chipotle and is glad that less people are there since he can eat faster.

Ackman has a mixed record on stocks picks and remains mired in his short HLF purgatory. Will he be luckier with CMG? Yes, probably. The falling green wedge, oversold conditions and positive divergence (green lines) forecast a launch in price which occurs over the last 2-1/2 weeks. Indicators remain long and strong so it looks like Ackman may have very good timing with Chipotle on the long side. He likely has a room full of chartists that highlighted the chart above 2 weeks ago when it was prime for a buy.

Price will likely want to tag the upper band at 460, then perhaps retreat back down to the middle band at 418 then resume the upside on this weekly basis. The daily chart gapped up yesterday so there may be some sideways digestion ahead in the daily time frame. Chipotle has been beaten down significantly over the last year so in a market downturn it may not be as negatively impacted as other stocks. Nonetheless, in a recession, people will eat out less.

Keystone does not hold a position in CMG currently but will consider a long play going forward. Ackman will likely be successful with his long Chipotle play as time plays 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 Saturday, 9/10/16: CMG finishes the week up +4.4% sitting at 426.55. Chipotle settles a lawsuit concerning its contaminated food a few months ago. This should help the stock since uncertainty is removed. Google and Chipotle team-up to deliver burritos by drone which will create a new buzz for the flailing restaurateur. Time will tell if the taco's and hot sauce can push it higher.