Tuesday, December 11, 2018

USD US Dollar Index Weekly Chart; Overbot; Rising Wedge; Negative Divergence; Upper Band Violation

The consensus keeps calling for a rising dollar along with rising rates. Usually the consensus is wrong. At the start of this year, the Wall Street analysts proclaim that the dollar will crumble into oblivion. They expected the downward-sloping blue channel to continue. At the same time, Keystone highlighted the possie d (green lines) so you knew the dollar was going to bounce not head lower and boooiiiinnngg, it bounces early this year.

USD travels higher into the red rising wedge, a bearish pattern, and hits resistance corresponding to the congestion from late spring early summer 2017 (blue circle). The stochastics are overbot agreeable to a pullback. The RSI lightly tapped overbot territory in early August. The red lines show universal negative divergence across all indicators as the dollar makes new price highs above 97.

Price violated the upper band at 97.58 so a move to the middle band at 95.76, and rising, is on the table. The ADX was in a very strong downtrend in the back half of 2017 into early 2018 (purple box) but this trend petered out by April-May of this year. Note that for the big rally in the USD this year, the ADX is down at 21. The big multi-month rally is NOT a strong trend higher.

Watch the Aroon for the red to cross above the green which signals trouble for the dollar. The neggie d should spank the dollar lower going forward on the weekly basis. This means metals and commodities should feel love as the dollar retreats. Considering the moving averages and price support levels, the 95.7-96.2 range is an initial downside target for the weeks 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.

AAPL Apple Daily and 2-Hour Chart; Oversold; Falling Wedges; Positive Divergence; Lower Band Violation


The Apple has grown rotten in recent weeks. The neggie d spankdown occurs in early October along with the broad stock market in fact Sapple drags the entire market lower. CEO Cook climbs out from under his mahogany desk to take a look at the landscape. By the looks of the short-term charts, the head cook pronounces an all-clear signal.

Both charts show universal positive divergence. RSI and stochastics are coming off oversold levels. The falling wedges are easy to see. All these parameters are bullish. Price will want to seek the middle bands, at a minimum, which are at 182 and 174, and moving lower, for the daily and 2-hour charts, respectively. If price begins running higher due to the possie d, AAPL may receive rocket fuel from short-covering.

You can see the death cross coming later this month or to welcome the new year. Perhaps Santa is planning to provide a death cross under Timmy Cook's Christmas tree.

The Apple weekly chart remains weak. Thus, the short-term joy that is set up in the charts above for the near-term will be short-lived. AAPL will likely bounce and move higher for a few days but then roll right back over and drop taking out the lows again on the weekly basis. Thus, either play AAPL long now remaining extremely nimble, Keystone had opened a long on AAPL, and play this pop and then get out in a day or few, or, wait a week or so to see how things set up for a potential short. The daily chart above will likely need to rally a few days up towards overbot levels and then you can watch for the neggie d to develop to know when to flip back to the short side. This information is for educational and entertainment purposes only. Do not invest based on anything you read or view here. Consult your financial advisor before making any investment decision.

NYMO McClellan Oscillator and NYA NYSE Composite Daily Charts


The NYMO is consistent with where a near-term bottom is on the table. The green circles show stock market bottoms and the red circles show stock market tops. What do you think will happen? Generally, the stock market rallies when the sub -40 level and lower is reached. The McClellan Oscillator is in that ball park now.

The NYMO above +40 tells you a near-term top is at hand very soon and boom, the NYA drops from 12620-ish to 11696 in four quick days; a -5% drubbing.

The SPX 2-hour and daily charts are set up with possie d. The NYMO is agreeable to a bounce. The CPC and CPCE put/calls are at elevated levels indicating heightened fear and panic agreeable to a near-term bottom. The S&P futures were down -10 a couple hours ago and now are launching higher up +17 points.The Chinese communists are talking nice on car tariffs providing buoyancy in the futures. Copper is up +1.4% creating market optimism. The bulls are cheering ready to buy stocks with both hooves. This information is for educational and entertainment purposes only. Do not invest based on anything you read or view here. Consult your financial advisor before making any investment decision.

SPX S&P 500 2-Hour Chart; Oversold; Falling Wedge; Positive Divergence; Lower Band Violation

The 2-hour SPX chart is set up with oversold conditions, a falling wedge and positive divergence all bullish indications. Price jumps out of the falling wedge which would be expected. The possie d forms over the last couple candlesticks so the Tuesday open will have to play out to see if it can launch price higher. If not, the relief rally would only be delayed a day or so because price would come down and the indicators would likely all be firmly positively diverged ready to push price higher.

The lower band is violated so the middle band at 2692, and dropping, is on the table. S&P futures are up +14 about 3 hours before the opening bell for the Tuesday session. The bulls are walking around with their chests puffed-out ready to launch a relief rally. Both the SPX 2-hour and daily charts are set up with possie d which is a big feather in the bull's caps. 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; Positive Divergence; Lower Band Violation

Stocks crumble since early October and are in a sideways chop ever since. The indicators oscillate sideways not tipping their hands. The S&P 500 recovers 55 points intraday yesterday, Monday, 12/10/18. Look at the long lower tail on yesterday's candlestick stabbing through the lower standard deviation band at at 2608. The middle band at 2703, and falling, is now on the table.

With the three low price tests since Halloween, each a matching or lower low in price, the indicators are positively diverged. This energy should launch price off the bottom again as may have started yesterday. The chart is very agreeable to a relief rally. Note the death cross that just formed. Price typically bounces after a death cross occurs which would hint that a move to 2700-ish may be in the offing. S&P futures were down -10 points a couple hours ago now up +13 points with the opening bell for the regular Tuesday session about three hours away. If a relief rally takes hold, shorts will begin covering and running for their lives which may add more upside fuel. This information is for educational and entertainment purposes only. Do not invest based on anything you read or view here. Consult your financial advisor before making any investment decision.

Monday, December 10, 2018

RUT Russell 2000 Small Caps 2-Hour Chart; Positive Divergence Developing; Lower Band Violation

The Russell 2000 small caps are falling apart today like the other broad stock market indexes. RUT retreats -1%. Late last week, RUT came down and violated the lower standard deviation band so the middle band, at a minimum, at 1486, is on the table. Price started to rally last week but then collapsed on Friday into today.

The falling wedge pattern is bullish. RSI and stochastics are at oversold levels agreeable to a bounce. The indicators are setting up with possie d except for the MACD line that remains weak and bleak (red). Thus, RUT will likely bounce for a candlestick (2 hours), then retreat for a candlestick or two to print a lower low. The LOD is 1423. At that time, the MACD line should begin sloping higher and positively diverging with the lower low in price. That would be the near-term bottom; say, anytime over the next 2 to 8 hours so today into Tuesday noon time. The MACD line will dictate when. Markets look pretty nasty right now. RUT is at 1433.

The TICK machine is printing -1000 to -1100 readings and lower between 10:45 AM EST and 11:30 AM EST when Europe closed. Also, a few minutes ago at 12:20 PM EST. These are very negative readings showing that people are selling off stocks with fear (selling may be reaching a crescendo). There is blood in the streets. 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, December 9, 2018

OVX Oil Volatility and WTIC Oil Daily Charts; Death Cross


The OVX shows the wild spikes higher in oil volatility as oil fell off a cliff screaming the whole way down. The OVX hit nearly one hundo a couple times. The green circles show the peaks in the OVX at maximum fear and panic. Oil traders are panicking saying price is going to zero and the end of the world is near and, of course, that is when price bounces.

WTIC oil price keeps testing the lows day after day for the last three weeks but note how volatility is not printing sideways or higher; instead, the OVX is trending downward. This divergence with price weak but volatility not as weak hints that oil price may be searching for a bottom.

You can watch the OVX and if you see it spike above 60-65 again, buying oil appears prudent. The death cross for West Texas crude is highlighted with the gray circle. 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.

WTIC and Brent Oil Daily Charts Print Death Crosses


The West Texas Intermediate Crude and Brent Crude daily oil charts print death crosses where the 50-day MA stabs down through the 200-day MA. Typically, when a death cross occurs, price will bounce since it took many, many days of weakness to drive the 50-day MA lower and a recovery is overdue. When price bounces, watch to see if the death crosses remain in play, or not.

If the death cross remains in play, oil prices will be weak 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.

SILVER Daily and Weekly Charts


The silver daily and weekly charts set up with positive divergence in the first half of November and bingo, price bounces. The daily chart shows price traveling from the lower band to the upper band at 14.70 over the last three weeks in a a two-leg bull pattern. Price keeps teasing the top of that blue channel at 14.80-ish. The bottom of the channel is 14.00.

If price breaks out above 14.80, it will likely run the same distance of the channel which is a 15.60 target that just happens to be the 200-day MA moving lower. Therre is a lot of price congestion in July and August at 15.3-15.6.

The weekly chart shows the positive divergence bottom which bounces price although the ADX indicates that the weekly strong downtrend in price continues. Nonetheless, the inciators are long and strong wanting to see more new price highs after any pullbacks. The daily chart indicators are long and strong as well sans the money flow and the stochastics now moving into overbot territory.

The daily chart hints at a couple more days of upside but then price will likely stall again fo a few days, however, the weekly chart remains strong so price should then rally again and likely break above the 14.80 resistance. The weekly chart is encouraging for silver. Keystone does not hold any positions in silver currently.

Watch the stochastics on the weekly chart to see if they move above 50% into bull territory or if they stay below 50%. 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.

COT Commitments of Traders and WTIC West Texas Intermediate Crude Oil Weekly Charts


Oil has been bludgeoned. West Texas peaked at 77-ish and then collapses over a seven-week record selloff to 50 a -35% beating. That's gonna leave a mark. The red circles show oil tops and green circles are oil bottoms. The bars on the COT chart are pulling in towards the center looking for a rally and oil tries to pop the last couple weeks.

Price drastically violated the lower standard deviation band and over the last two weeks moves back above that bottom band. The middle band at 65.29 and dropping is on the table.

The 20-week MA crosses below the 50-week MA which is a negative long-term signal for crude. Price is playing around the 200-week MA at 52.28 so this support level carries a lot of clout. Bad things will happen to oil if 52.28 fails and prices begin closing below.

The neon green lines show price printing matching lows over the last three weeks. The indicators are all in positive divergence as price tests those lows and this creates the bounce in price back above the 200-week. Note, however, that red line with the MACD line that is weak and bleak. The MACD wants price to come down once more to the lows and if it flattens and slopes up (positive divergence), then oil will be set for a multi-week rally.

A two-week pop occurs due to the neon green possie d. Keystone is not trading oil right now. The thought is to wait a few days to see if price comes back down to 50-ish. If so, and if the MACD line flattens and begins sloping higher on the weekly chart, it will be time to buy oil on the long side. On the way up, if price makes it to 58 it should rally back up to 62. This may jive with the middle band that is coming downwards in that 62-64 range. First price would have to move above 57-58.

Once the MACD line on the weekly chart turns possie d and oil is set to recover on a weekly basis, from 50-ish, price will seek the 200 at 52.28, then up to the 57-58 then perhaps 62-64. 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: The oil chart is from Cot Price Charts and annotated by Keystone. There are many interesting COT charts there.