Sunday, May 22, 2016

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

The SPX remains under the 200 EMA on the 60-minute at 2059 signaling bearish markets for the hours and days ahead. The 200 EMA cross on the 60-minute is one of Keystone's key short term market signals. Bulls came up five days ago to tap on the 200 EMA but the bears quickly spanked price back down. That high is interesting since it also occurred directly at the top trend line of the downward-sloping channel.

The 2059 is a very big deal for the week ahead. Market bulls win big if they move above 2059. Bears will maintain pressure on markets and cause them to break down again the longer that price remains under 2059. The last hammer candlestick hints at a trend change so price may float higher to begin Monday morning. Watch the upper trend line at 2055-2057; this would be the first clue that the SPX wants to battle at the critical 2059 level. Bears need to maintain price inside the downward-sloping channel.

The strongest price support/resistance is 2072, 2067, 2061, 2057, 2046, 2042, 2032, 2022, 2019 and 2011. Combining the 200 EMA with price resistance sets up a key 2057-2061 resistance gauntlet; a key bull-bear battle ground. This information is for educational and entertainment purposes only. Do not invest based on anything you read or view here. Consult your financial advisor before making any investment decision.

SPX S&P 500 Support, Resistance (S/R), Moving Averages and Other Important Levels for Trading the Week of 5/23/16

SPX (S&P 500) support, resistance (S/R), moving averages and other important levels are provided for the trading week of 5/23/16. Levels shown in bold are strong resistance and support. Bold and underlined levels are very strong and important S/R.

For 2016, the intraday high for this year is 2111.05 on 4/20/16 and the closing high for this year is 2102.40 on 4/20/16. 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 catastrophic path ahead for stocks.

The SPX has exploded higher over the last three months due to the central banker intervention especially the BOJ, ECB and Federal Reserve. The highs for the year thus far printed on Wednesday, 4/20/16, one month ago. The SPX topped at the 2110-2114 resistance area and then retreated. Note how price got tangled up in the closing and intraday highs from last November and last December and did not have the energy to move up through; at this time. The 2102 R is very strong and important. If 2102 gives way to the upside new all-time highs may be coming. Pay close attention to the 2110-2116 resistance zone; this would be the last chance area for bears to stop the stock market from marching towards new all-time highs. Bulls will throw confetti and drink Fed wine if the SPX moves above 2116.

The VIX remains under the 200-day MA so the bears are not a huge threat to the bulls. The SPX is attacking the important 200 EMA  on the 1-hour chart at 2058.74. This is a very critical level for price. The market bulls will rejoice with a strong rally higher if 2059 is taken out. The market bears must fortify positions and prevent 2059 with all their might. The SPX under the 200 EMA on the 60-minute chart at 2059 signals bearish markets for the hours and days ahead. Thus, it is imperative for the bulls to push above 2059 to prove they got the beans to take equities higher. Market bears will win if SPX fails to climb above 2059.

The full moon peaked for the month yesterday and stocks are typically bullish moving through the full moon. Markets are closed next Monday, Memorial Day, 5/30/16, so stocks may be buoyant to end the week. Typically, stocks are bullish the two days in front of a three-day holiday weekend. Thus, only based on seasonality factors, stocks may be elevated to begin the week, then sluggish mid-week say Tuesday to Thursday, and then rally into the holiday weekend on Thursday and Friday.

The SPX began May at 2065 so this level is key for the days ahead. The month ends, EOM, on Tuesday when traders return from the holiday on Monday. There are only 6 trading days remaining in May and 2065 determines if the month finishes positively or negatively.

The SPX begins Monday at 2052 eight points above the starting year number at 2044. The bulls need to push above 2058-2059 to accelerate the upside. The bears need to push under 2042 to accelerate the downside. A move through 2043-2057 is sideways action for Monday.

If the SPX pushes up through 2052-2053 resistance, price will tackle the 2057-2061 resistance gauntlet which is extremely strong. Bulls would win big above 2061.

If the bears push under the 2038-2042 support floor, 2032 will occur very quickly, then price will bounce or die. If price continues lower under 2032, the very strong 2024-2029 support gauntlet is in play. If 2024 fails, bad things will happen to the stock market and the 2K level is likely on tap.

Looking at the near-term picture the strongest price support/resistance is 2110-2114, 2102 (extremely strong resistance; if 2102 gives way new all-time highs are likely), 2094, 2089, 2079-2084, 2074, 2072, 2067, 2061, 2057, 2046, 2042, 2032, 2022, 2019, 2011, 2002, 1997, 1993 and 1985-1988.

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

2135 (5/20/15 All-Time Intraday High: 2134.72)
2133 (7/20/15 Intraday High 2132.82)
2131 (5/21/15 All-Time Closing High: 2130.82)
2130 (6/22/15 Intraday High 2129.87)
2128 (7/20/15 Closing High: 2128.28)
2126 (4/27/15 Intraday High: 2125.92)
2124 (6/23/15 Closing High: 2124.20)
2121 (4/24/15 Intraday High: 2120.92)
2120 (2/25/15 Intraday High: 2119.59)
2118 (4/24/15 Closing High: 2117.69)
2117 (3/2/15 Closing High: 2117.39)
2116 (11/3/15 Intraday High: 2116.48)
2111 (4/20/16 Intraday High for 2016: 2111.05)
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 Closing High for 2016: 2102.40)
2094 (12/29/14 Intraday High: 2093.55)
2091 (12/29/14 Closing High: 2090.57)
2079 (12/5/14 Intraday High: 2079.47)
2076 (11/28/14 Intraday High: 2075.76)
2075 (12/5/14 Closing High: 2075.37)
2073 (11/26/14 Closing High: 2072.83)
2071.88 Previous Week’s High
2071 (11/21/14 Intraday High: 2071.46)
2065.30 May Begins Here
2064.58 (20-day MA)
2060.54 (50-day MA)
2058.74 (200 EMA on 60-Minute Chart a Keystone Market Turn Signal)
2058.35 Friday HOD
2056 (11/18/14 Intraday High: 2056.08)
2052.32 Friday Close – Monday Starts Here
2046 (11/13/14 Intraday High: 2046.18)
2044 (12/31/15 Closing High: 2043.94)
2043.94 Trading for 2016 Begins Here
2041.88 Friday LOD
2040.87 (20-month MA)
2029.37 (100-week MA)
2026.06 (12-month MA; a Keystone Cyclical Signal) (the cliff)
2025.91 Previous Week’s Low
2024.43 (50-week MA)
2019.53 (150-day MA; the Slope is a Keystone Cyclical Signal)
2019 (9/19/14 Intraday High: 2019.26)
2014.58 (10-month MA)
2011.07 (200-day MA)
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)
1996.72 (100-day MA)
1994.10 (20-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)

SPX S&P 500 Daily Chart Showing Keybot the Quant Algorithm Turns in 2016

Here are the turns thus far this year for the Keybot the Quant algorithm. The red line is where the Keybot algo went short and the green line is where Keybot goes long. The year was off to a wild start. As you will recall, Keybot flipped short on the very last trading day of 2015 during the last one minute of trading. That was interesting. The algo benefited from the losses in stocks early in the year. The choppy sideways activity, that chews up bulls and bears alike, continues. Last December was a mess; look at all that back and forth choppy slop that ultimately resolved to the down side. As per the algorithm, the bulls are in charge as the week of 5/23/16 begins.

Saturday, May 21, 2016

VIX Volatility Daily Chart

The VIX remains  under the 200-day MA sending the stock market higher. Low volatility is the bulls best friend and the corrupt central banker's maintain their jack boots on the neck of the VIX holding it down so stocks can rally. The stock market rally began mid-February as was expected due to the elevated fear with the VIX above 30. As March began, the VIX lost the 200-day MA so the bulls win and bears lose. Note the textbook back test of the 200-day in early March the VIX coming back up for a bounce or die decision and deciding to fail. Lower volatility creates a higher stock market.

The purple sideways channel represents the market bulls punching the bears in the face. Bears got nothing unless the VIX moves above the 200-day MA at 18.74. The Keybot the Quant algorithm is on the long side currently and tracking the VIX 18.22 level as a key bull-bear inflection point (red bar). Thus, the market bears need to move above 18.22 and you will see the stock market deteriorate extremely fast. If the VIX remains below 18.22, the bulls have their feet up on the desk relaxing, smoking cigars, and dabbing the ashes in the bear's face. 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.

Keybot the Quant Turns Bullish

Keystone's proprietary trading algorithm, Keybot the Quant, flips long at SPX 2054 shortly after Friday's opening bell. The chips, SOX, catapulted above its key 649 level which sent stocks wildly higher. The algorithm is tracking three key parameters currently controlling stock market direction; retail stocks, chips and financials. Market bulls need stronger retail stocks to prove they got the beans to take stocks higher. Market bears need weaker semiconductors and banks to mount a charge lower for equities. As always, remain alert for a potential whipsaw move back to the short side early next week. More information is found at Keybot's site;

Keybot the Quant

Thursday, May 19, 2016

CPC Put/Call Ratio Daily Chart Signals Near-Term Bottom

Traders are experiencing rampant fear and panic which indicates that a near-term stock market bottom is at hand. Traders have not been this fearful since the mid-February bottom. The market bulls are happy to see this chart. The CPCE put/call ratio has not jumped higher as yet. Thus, stocks may perform a rally move and then retreat again after a few days to reset for another bounce after the CPCE spikes higher to match the CPC.

Stocks will likely begin a rally at anytime any day ahead so if you are not short the stock market already then it is likely not worth chasing stocks lower and consideration should be given to cover shorts in the hours and couple days ahead and put on a couple longs (for VST trading and day trading). Market bears need bad geopolitical or other news which would create negativity, otherwise, the bulls are going to get a turn at bat going forward in the very short term. 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 Morning, 5/21/16: Stocks launch higher in the Friday trade due to the excessive negativity as evidenced by the elevated CPC put/call above. 

SPX S&P 500 2-Hour Chart H&S (Head & Shoulders) Downward-Sloping Channel Positive Divergence Lower Band Violation

The bears keep trying to push lower but the bulls are not giving up the fight. Keystone's prior H&S chart receives a lot of interest on the web so let's take a closer look at the head and shoulders chart pattern with a 2-hour chart. All those lines look like spaghetti. The blue lines clearly show the head and shoulders pattern that is in play with neckline at 2040, which is also very strong price support, and head at 2111. This is a difference of 71 points so a downside target of 1969 is in play if the 2040 fails and the SPX stays under the 2040 level.

The neckline failed today but price recovered due to the positive divergence (green lines) and oversold stoch's. The move today is a textbook back kiss of the neckline of a textbook H&S pattern. Price has to make a bounce of die decision from 2040 tomorrow morning. The SPX violated the lower standard deviation band so a move back to the middle band at 2051 is on the table and also the upper band at 2074 (pink). The downward-sloping channel (purple) clearly shows a pattern of lower lows and lower highs a bearish indication.

Considering the possie d, oversold conditions, lower band violation and bottom channel trend line support, the bulls likely have the advantage in the hours ahead. If the top standard deviation band moves lower and joins the upper channel trend line, price may seek the top of the channel at 2060-2070 to confirm the pattern of lower highs before potentially resuming the downward path which remains in play on the daily time frame.

The full moon peaks on Saturday and stocks are typically bullish moving through the full moon another plus for bulls. OpEx is tomorrow so volume will be robust after the opening bell and before the closing bell adding to the excitement.

Note that price did not come down to oversold conditions for the RSI and money flow. Typically, when price eventually washes out at some point in the future you will see the RSI and money flow print very low into the oversold zone.

Keybot the Quant trading algorithm remains on the short side and is tracking SOX 649.27 (semiconductors) and XLF 22.79 (banks) s the two key drivers of stock market direction currently. The market bulls need SOX above 649.27. The bears need XLF under 22.79. If the status quo remains with bearish chips and bullish banks, the stock market will float along sideways with an upward bias into the weekend.

The strongest price support/resistance levels are; 2071, 2067, 2061, 2057, 2046, 2040, 2032, 2022-2023, 2019, 2011, 2002 and 1997. The 20-day MA is 2067. The 50-day MA is 2059. The 12-month MA is 2025 ( a critical cyclical market signal).  The 50-week MA is 2024. The 200-day MA is 2011. The S&P 500 started the year at 2044 and is negative by four points; the SPX benchmark index is down -0.2% in 2016.

What does all this mumbo-jumbo mean? Boiling things down to a simple level for Keystone's simple mind, if the SPX heads lower from 2040 and if the XLF loses 22.79, stocks will be in huge trouble with lots more downside ahead. At that point, watch the SPX 2025 level a major line in the sand where market mayhem and carnage would begin. The SPX will likely target the 1997-2002 landing zone if 2025 fails and then price would continue lower to the 1969 H&S target as time moves along.

If stocks sell off but the XLF does not go under 22.79, then bears got nothing and stocks will recover and rally. If stocks move above 2040 heading higher, but the SOX does not go above 649.27, the bulls got nothing and stocks will reverse and head lower intraday. If stocks trade higher and the SOX 649.27 is taken out to the upside, the rally will gather strong steam and stocks will be rocking and rolling higher into a triumphant and glorious weekend.

The bulls are favored in the hourly time frame ahead as per the above discussion; the bears need either negative geopolitical news or bad news with the banks. Watch SOX 649.27, XLF 22.79 and SPX 2025 since these three parameters determine market direction for Friday and the fate of bulls and bears going 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 Saturday Morning, 5/21/16: The chips catapulted higher so the bear's fate was sealed. The scenario, ' if stocks trade higher and the SOX 649.27 is taken out to the upside, the rally will gather strong steam and stocks will be rocking and rolling higher into a triumphant and glorious weekend' occurs. Market bulls will need stronger retail stocks to continue the stock market rally. Market bears will need weaker semiconductors and financials to take stocks lower.

Wednesday, May 18, 2016

BPSPX S&P 500 Bullish Percent Index Daily Chart

The BPSPX is on a double-whammy market sell signal. The BPSPX peaked at 79.70. A six percentage-point reversal constitutes a trend direction change and 79.70-6 = 73.70, which failed issuing a market sell signal. The drop under the important 70% level is very key and creates the double-whammy sell signal.

Check the BPSPX each day forward. If the BPSPX remains under 70, the stock market is toast and will begin tumbling lower going forward. If the BPSPX regains the 70 level, the bulls will recover and markets will at least remain in a choppy sideways direction. 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 8 PM EST Thursday Evening: The BPSPX continues lower to 66.6 so the bears cheer. Price under the 70% level is a major win for bears. The only way the bulls can confirm a trend change back to the upside is if a move above 70% occurs. Bulls would receive big time juice higher if a six percentage-point reversal occurs which would be above 72.6 (66.6+6). For now, the bears are driving the bus as per the BPSPX tool.

SPX S&P 500 Daily Chart H&S (Head & Shoulders)

The sideways choppy market action continues chewing up bulls and bears alike. If you do not like the market direction, wait until the next day since stocks will move the opposite way. The blue lines show a head and shoulders (H&S) pattern in play. Keeping it simple for Keystone's simple mind, the neck line is 2040 and head at 2100 (the intraday top was 2011) for a difference of 60 so the downside target is 1980 (2040-60) if the 2040 level fails. Note the intraday lows from early March that create a strong downside support target for the H&S at 1965-1970. If price moves lower the 200-day MA at 2012 will create support on the way down.

The 20-day MA is 2072, the 50-day MA is 2057 and price is below at 2047. The year began at 2044 so the S&P 500 is only positive by 3 points this year. You could have went on vacation and ignored all the market drama this year and you would have not missed a thing. Pay attention to the 50-day MA resistance.

The MACD line and money flow remain weak and bleak hinting at lower lows ahead for price. The tiny red circles clearly show steady distribution taking place for the last six weeks. After stocks move higher one day, stronger volume comes in on the sell side the next day; this is institutions and funds handing off shares to the dumb money like Ma and Pa Kettle and Joe Sixpack. Amazon is printing record highs so many blindly confident retail investors are touting their stock market expertise at the office water cooler announcing that they have placed their entire life savings in AMZN stock.

The ADX is down to 14 verifying that the big rally move higher in the stock market is not a strong trend. When stocks tumbled lower to begin the year, the ADX ran above 25-ish which indicated that the trend lower in price was very strong. That strong downtrend petered out in late February as the rally began so you knew the bulls had legs. As stocks moved higher, the ADX tried to sneak above 25 as April began to signal that the upside trend was strong, however, it did not. According to the ADX, there is no strong uptrend.

The green lines show the possie d launch off the February bottom as forecasted. The falling wedge and oversold conditions also create the recovery move for stocks. The purple W pattern bottom is very powerful, especially since it formed under both the 50-day and 200-day MA's, and this proved correct with the SPX nailing the 2050-ish upside target in quick order. The red lines show the neggie d that created the spankdown off the top as forecasted. The rising wedge and overbot conditions also signaled the top. For the last two months, sideways choppy slop continues.

Watch the H&S neckline at 2040-ish since big trouble begins below. Bulls need to push the SPX above the 50-day MA at 2057 to celebrate. The FOMC Minutes at 2 PM EST (7 PM London; 8 PM Frankfurt; 2 AM Tokyo) may act as a pivot point today. This information is for educational and entertainment purposes only. Do not invest based on anything you read or view here. Consult your financial advisor before making any investment decision.

Monday, May 16, 2016

CPC and CPCE Put/Call Ratios and SPX S&P 500 Daily Charts

The sideways choppy behavior continues for the stock market chewing up bulls and bears alike. The low put/calls (red circles) at the end of April identified the market top, which occurred, and then some selling action takes place into the near-term bottom about one week ago with the elevated put/calls. Markets move choppy sideways and then rally big today.

Note, however, that traders went from fear and panic back to complacency in a heartbeat. Today's trading took on a party atmosphere. Goldman Sachs pumped the oil markets higher, perhaps to help their own positions, which created a rally in energy stocks and the broad indexes. Warren Buffett is buying tech stocks like Apple so the party was in full swing. Strong semiconductors helped the party continue.

Over the coming days the complacency will be at the point where it identifies a stock market near-term top again and stocks will retreat. The put/calls are already low enough to create s snap back move tomorrow to the downside for equities but there is likely a couple-three days of sideways choppy slop ahead. The put/calls tell  you that the stock market is probably not worth trading form the long side; stocks can definitely run higher but price will be running into a near-term top due to the low put/calls. 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.