Monday, December 5, 2016

Keybot the Quant Turns Bullish

Keystone's trading algo, Keybot the Quant, flips back to the bull side today at SPX 2204. Pay attention to VIX 13.90; it is the rudder steering market direction. Bulls win below 13.90 (now with a 12-handle) and bears above. Keep alert for a whipsaw back to the short side which would be likely if the VIX moves above 13.90.

More information is found at Keybot's site;

Keybot the Quant

Sunday, December 4, 2016

SPX S&P 500 Daily Chart

Remember last week, Keystone posted this SPX daily chart when the top was printing six days ago. That was the thin blue line where you see that the overbot stochasits, and slightly neggie d stoch's and neggie d with the histogram conspire to create the pull back but the green lines for RSI, MACD line and money flow were long and strong printing higher highs as the SPX prints higher highs. This hinted that price needed to come back up for another matching or higher higher. It did.

The SPX comes up to test the 2213-2214 all-time highs three days ago and then collapsed. That day is a key reversal day with price printing at or above the prior high and then below the low as compared to the three prior days; a bearish indication. Most importantly, the horizontal red line shows price printing the matching high so the indicators can be judged to see if they are in negative divergence and all the indicators are neggie d (red lines) so price is spanked down from the top.

The RSI stalls, ditto the money flow, over the last two days creating enough oomph to provide a small recovery move last Friday. The MACD line is weak and bleak and the MACD cross may turn negative to begin the week (bearish). The stochastics are weak and bleak wanting to see a lower low in price after any bounce. The 20-day MA at 2177 and rising needs back tested. The SPX may want to come down to test the 2175-2188 level before bouncing. Bears need the RSI and stochasitcs to move below the 50% level into bear territory, and the negative MACD cross, to guarantee further downside for stocks. 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 12/5/16

SPX (S&P 500) support, resistance (S/R), moving averages and other important levels are provided for the trading week of 12/5/16. 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 print occurs last Wednesday, 11/30/16, at 2214.10 and the all-time closing high is 2213.35 from 11/25/16. 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 is 2214.10 and closing high is 2213.35. The intraday low for this year is 1810.10 on 2/11/16 and the closing low for 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.

The three-week Trump Rally stalls last week. The month of November is a big up month. December begins at SPX 2199. Interestingly, the Bradley turn date a few days ago marks the top in stocks and trend change on the daily basis. The low CPCE put/call ratio has not resolved to the upside yet so it hints that some additional market selling is on the way. The first week in December is the strongest tax loss selling week of the year so this would be expected to create a slight negative bias in the stock market over the next few days. The NYMO daily chart has not fully resolved to the downside to create a tradeable stock market bottom so it hints that a bit more downside in equities is on the way.

The SPX began the year at 2044. The new week begins at 2192, a148-point gain, +7.2%, this year. The central bankers saved the markets in February and the coordinated global money printing creates the multi-month rally. The Trump election victory now creates optimism that money will be spent on infrastructure so commodities, basic materials and industrials stocks soar higher, as well as the bankers. The central bankers and government spending is the market. Market prognosticators continue upping their estimates with many proclaiming SPX 2300 and far higher. The future is so bright that you have to wear shades.

Interestingly, however, from a non-optimistic perspective, the SPX monthly chart is printing negative divergence across its indicators as well as a rising wedge pattern and overbot conditions. This set up on the monthly chart is just like May 2015 when the significant top occurred in the stock market. It is very likely that stocks are currently printing a multi-year top. The central bankers have supported markets for eight years but perhaps the party finally ends, at least according to the monthly chart it does. The central bankers, however, are extremely powerful.

For the new trading week ahead, Monday, 12/4/16, beginning the first full trading week in December, with the S&P 500 at 2192, the bulls need to touch the 2198 handle to create an upside acceleration that will jump strongly above 2000 and target the 2205 R. The bears need to push below 2187-2188 to accelerate the downside to 2182-2183 in a flash on Monday. A move through 2189-2197 is sideways action to begin the week. The daily chart needs to back kiss the 20-day MA which his at 2177 and rising. Price may want to poke around at 2175-2188 before recovering.

Stocks will be in big trouble if the 200 EMA on the 60-minute at SPX 2173 fails. Bulls will continue to keep the stock market buoyant and happy as long as they do not lose 2173.

Looking at the near-term picture the support/resistance is 2214, 2213, 2210, 2205, 2198-2199, 2194, 2190-2191, 2187, 2182-2183, 2178-2179, 2175, 2169-2170 and 2164.

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

2214 (11/30/16 All-Time Intraday High: 2214.10) (11/30/16 Intraday High for 2016: 2214.10)
2214.10 Previous Week’s High
2213 (11/25/16 All-Time Closing High: 2213.35) (11/25/16 Closing High for 2016: 2213.35)
2198.81 December Begins Here
2197.95 Friday HOD
2194 (8/15/16 Intraday High: 2193.81)
2191.95 Friday Close – Monday Starts Here
2190 (8/15/16 Closing High: 2190.15)
2188.37 Friday LOD
2187.44 Previous Week’s Low
2177.47 (20-day MA)
2172.96 (200 EMA on 60-Minute Chart a Keystone Market Turn Signal)
2162.62 (100-day MA)
2161.97 (20-week MA)
2156.25 (50-day MA)
2135.76 (150-day MA; the Slope is a Keystone Cyclical Signal)
2135.06 (10-month 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)
2026.94 (150-week MA)
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: 2111.04)
2110.71 (200-day MA)
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)
2101.92 (12-month MA; a Keystone Cyclical Signal) (the cliff)
2094 (12/29/14 Intraday High: 2093.55)
2091 (12/29/14 Closing High: 2090.57)
2080.48 (50-week MA)
2079.67 (20-month MA)
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 (11/21/14 Intraday High: 2071.46)
2070.72 (100-week MA)
2056 (11/18/14 Intraday High: 2056.08)
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)
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)
1938.40 (200-week MA)
1924 (5/30/14 Intraday Top: 1924.03) (5/13/14 Closing High: 1923.57)
1916.98 (50-month MA)
1902 (5/13/14 Intraday Top: 1902.17)
1897 (5/13/14 Closing High: 1897.45) (4/4/14 Intraday Top: 1897.28)
1891 (4/2/14 Closing High: 1890.90)

EURUSD Euro Weekly Chart; Italy Rejects Reforms Voting No on Referendum; Downward-Sloping Channel; Oversold; Positive Divergence Setting Up

Italy rejects reforms voting no on the referendum. Italians prefer to keep the status quo;  a bloated slow bureaucracy that is unable to institute reforms to help the sick economy. Have another glass of wine and relax; it is the Italian way.

Renzi speaks minutes ago, at 6:20 PM EST Sunday evening, 12/4/16. It is just after midnight in Rome, Italy, Monday morning. Renzi concedes the referendum vote and resigns. The drama will continue today as to what the next step is for Italy.

The euro drops like a stone to 1.0510, now at 1.0550, at levels not seen since March 2015 and at record-breaking lows. The euro drops so the dollar pops. USD 10.44. A stronger US dollar sends commodities lower including oil. US futures are soggy. S&P -8. Dow -40. Nasdaq -25.

The dark green lines and circle show where the euro is slipping, however, the indicators are set up with positive divergence. Stochastics are overbot. These are bullish indications for the euro. Since it is a weekly chart, and the Italy referendum news is only getting priced into the euro chart now, a few days or week or two of weakness may persist. The ECB meeting is on Thursday so an extension of QE will create further euro weakness. However, the euro may be a long play say in a week or two and bounce from the possie d on the weekly basis. But there is no rush to trade the euro especially with the ECB on tap this week but place it on the radar as a potential long side trade maybe starting in a couple weeks.

Price may want to test that bottom rail of the downward-sloping channel and bounce from there, call it the 1.03-1.05 area. Price is overextended to the downside far under the moving averages so a mean reversion higher is desperately needed which is another bullish indication setting up. 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 Monthly Chart; Overbot; Rising Wedge; Negative Divergence

November ended last Wednesday, 11/30/16, so the monthly charts receive a new print. November was a big up month as the white candlestick shows. The red lines show the rising wedge, overbot conditions and negative divergence that Keystone used to call the May 2015 market top. There was no reason for price to come back above those levels; that was a multi-year top. But alas, the central bankers are extremely powerful and the ECB, Fed, BOJ, BOE, PBOC and other central bankers keep providing easy money joy and here we are over one year later printing record all-time highs on all four major indexes (SPX, INDU or DJI, COMPQ and RUT).

The maroon lines show the SPX printing a new all-time high in November at 2214.10 on 11/30/16 above the high in July that was above the high in May 2015. This month, December, is only 2 trading days old, currently displaying matching highs compared to November's candlestick. Thus, price is moving steadily higher since the summer time. How do the indicators look?

The RSI is unenthusiastic meandering sideways, which would be negative divergence, and over the two-year period is in clear neggie d.  The MACD line is neggie d over the last two years but has a sliver of upside it is trying to create over the last couple months. The MACD cross is positive so watch to see if that black line dips below the purple line at 71.33 since that is a tell for trouble ahead for stocks. Stochastics are overbot. The price action displays a rising wedge pattern. All these items are bearish.

The pink box shows the glorious uptrend in stocks through 2013, through 2014 and into the May 2015 top. That uptrend was the real deal. The ADX is now down at 13.75 laying on its back which indicates the recent multi-month upside move in the stock market is not a strong trend. If the stock market expects joyous higher highs ahead, that ADX should be above 20 and heading to 25 and higher. Instead it keeps sinking lower. The up move in stocks since the February bottom early this year is not a strong uptrend.

The chart favors lower prices ahead in the monthly time frame. Stocks would be expected to print a multi-year top now, say anytime from now to January, and the top may already be in, and stocks should trend lower for many months perhaps a year or two. Watch that MACD cross. 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.

November Publication of the Daily Chronology of Global Markets and World Economics 2016-11 is Available on Amazon; Trump Wins Stocks Rally; Donald Trump 45th President of the United States; Stocks Print All-Time Highs SPX 2214 INDU 19225 COMPQ 5404 RUT 1347; Global Bond Rout (Yields Explode Higher); India Cash-Swap Program; Oil Rallies on OPEC Production Cut; Market Angst Ahead of Italy Referendum

The November publication of the Daily Chronology of Global Markets and World Economics 2016-11 is available through Amazon (AMZN). The epic market action continues with Donald Trump elected as the 45th president of the United States (POTUS). A huge (or as Donald Trump says, “‘yuge”) Trump Rally occurs in the stock market after the election with a corresponding bond rout (lower prices higher yields).

November’s Cover Highlights;
SPX 2214 INDU 19225 COMPQ 5404 RUT 1347

The month of November is historic for markets. The polls were wrong in predicting the Brexit vote and they were wrong again predicting Hillary Clinton to defeat Donald Trump. The orange-headed bombastic clown took the prize from the scandal-ridden liar in the pantsuit. The S&P futures crashed as the election results came in, however, after Trump’s early Wednesday, 11/9/16, well-received acceptance speech, stocks took off to the upside and never looked back for an epic three-week rally.

The Daily Chronology of Global Markets and World Economics is the only document available that recorded the futures, stocks, bond and currency moves in real-time as election results came in. That was quite a night of drama on Tuesday, 11/8/16, into Wednesday morning and it can only be re-lived by reading the chronology. Market enthusiasts will reference this month’s chronology for years to come since the 2016 presidential election drama is explained as it unfolds in real-time, hour by hour.

The four major stock indexes, the S&P 500, Dow Jones Industrials, Nasdaq Composite and Russell 2000 small caps all print historic all-time highs in November. Global bonds crash with yields going parabolic. Those that have been touting inflation for several years proclaim that this time inflation is here to stay. The jury remains out.

The November issue includes the results and market reactions to both the 11/4/16 and 12/2/16 job reports. OPEC reaches an oil production cut agreement which sends oil prices vertically higher with WTIC (West Texas Intermediate Crude oil) testing the 50-52 price level for the fourth time since May.

India is undergoing a major currency shift where all large cash bills are being removed from society as a means of decreasing corruption, tax evasion and black market movement of goods. The highest bill now in circulation in India is equivalent to about $15 in the United States (between a $10 bill and $20 bill). The India government does not have enough of a supply of small bills showing a gross lack of planning. India’s economy suffers from the move with GDP slipping a touch and the stock market sinking.

The drama ahead is the Italian referendum vote on Sunday, 12/4/16. This may create turmoil with the insolvent Italian banks which are pieces of garbage. Austrian elections are also occurring on 12/4/16.

The chronology explains the reaction in stocks, bonds and currencies to key events and economic data releases. If you are trying to make sense of the markets this is the resource for you. No other publication exists in this format where the stock, bond and currency moves are provided and explained as world events take place in real-time.

The chronology records economic history preventing revisionist tampering in future years. Many of the same asset managers telling everyone to go long the market in 2007-2008 repeat the same mantra in 2015-2016. The stock market topped out in May 2015 which placed anyone that listened to television pundits over the last couple years either flat or underwater on their long trades. The central banker go juice has pumped stocks higher from February of this year to present creating new all-time highs and rewarding those that blindly remain long with full confidence in the Federal Reserve’s Keynesian schemes.

Analyst and strategist quotes and words are recorded in the chronology so credit or disdain can be handed out in the future. If a multi-year top is printing, the chronology serves as the most accurate accounting of the stock market topping process ever recorded in economic and market historyThe chronology is the most reliable and easy to understand source for explaining global marketsThe chronology is cheap and very easy to read and avoids using fancy ten-dollar college words.

As always, all monthly publications of the Daily Chronology of GlobalMarkets and World Economics are available from the links in the margins or simply searching on Amazon or Google. The monthly publication contains updated information not posted on this web site as well as clarifications, edits and refinements to the ongoing daily blog text.

We are living through historic stock market and economic times. The daily chronology is the most accurate accounting on how the stock market tops and bottoms occur in real-time. The monthly publications are compatible with any electronic device and include an extensive Business Acronym List and Ticker Symbol List. The Acronym List is the most comprehensive business-related acronym list available on the internet. The chronology is not available in hard copy and only distributed around the world electronically.

The KE Stone Series of blogs are viewed by 100's of thousands of people around the globe each month including money managers, strategists, analysts, traders, investors, teachers, students, historians, economists, current event enthusiasts, hedge fund managers, political junkies, futurists and folks that truly want to understand how the world's economic systems and markets function. All readers should support the KE Stone family of blogs so more information, articles, stories, market and economic insight, charts and technical analysis can be provided. The blogs aid charities and will only continue if supported by the thousands of daily users.

Friday, December 2, 2016

US Monthly Jobs Report Explained 12/2/16; Focus on Wages and Unemployment Rate

Here is the Reader's Digest of the Jobs Report. As always, reference Keystone the Scribe for the daily market chronology and more details.

At 8 AM EST, Friday, 12/2/16, traders are focused on the imminent jobs report the last jobs data before the expected FOMC rate hike on Wednesday, 12/14/16. The wage data is critical. Wages must continue to increase for a rate hike path forward to be viable. Inflation cannot exist without wage inflation.

Fed Funds futures indicate a 96% chance of a rate hike on 12/14/16. More importantly, the Federal Reserve’s comments on future hikes will impact global markets. The current thinking is that the Fed will hike twice in 2017 and three times in 2018. The FOMC has lost credibility since Fed Chair Yellen and company had communicated the intent to hike four times this year and there has not been one single rate hike as yet. The 12/14/16 meeting is the last chance for the Fed to hike rates in 2016. The first rate hike off the zero bound (ZIRP; zero interest-rate policy; 0.00% -0.25%) occurred last December with the key rate currently at 0.25%-0.50%.

The consensus of traders and analysts expect 170K jobs compared to last month’s 161K jobs. The unemployment rate is expected to remain unchanged at 4.9%. Private payrolls are expected at 155K compared to the prior month’s 142K. The Labor Participation Rate should remain at decade lows at 62.8%. The Average Workweek is expected to remain unchanged at 34.4 hours.

The critically-important Average Hourly Earnings are expected at +0.2% month-on-month versus last month’s robust +0.4% gain. The wage data is more important than the headline numbers since it dictates whether the Fed’s desired inflation will appear, or not, going forward.

Wages are increasing at +2.8% per year. The three-month uptrend in annualized wages are as follows; August at 2.5% annual wage increase, September is +2.7% and October +2.8%. Wages are rising so Yellen touts the rate hike line. Any move backwards from the +2.8% gain per year in wages will disappoint the Fed.

As a rule of thumb, wage increases of from +4.0% to +4.5% per year create sustainable and longer term inflation. Thus, wages are increasing but Fed Chair Yellen and other FOMC members know they cannot sleep until wages continue moving higher and the annual wage gains start running far above to +3% and above +4%.

If the wage number comes in less than the +0.2% month-on-month expected, or less than the annualized +2.8%, it will throw a wrench into the works for the proposed 12/14/16 rate hike that everyone expects. A portion of this year’s wage gains are due to the minimum wage increases at MCD, WMT and many other companies and businesses. These adjustments may have run their course. The Federal Reserve will be extremely disappointed if the wage data now trails off as the year ends and 2017 begins especially when they appear ready to raise rates.

S&P -3. Dow -16. Nasdaq -14. VIX 14.32. WTIC 50.58. Brent 53.30. Gold 1172. Silver 16.46. Copper 2.6065.

Treasury  yields are; 2-year 1.13%, 5-year 1.88%, 10-year 2.42%, 30-year 3.07%. German bund 0.329%. Japan 10-year yield 0.035%. UK gilt 1.44%. France 10-year yield 0.79%.

One minute before the data, the S&P futures are -2. Dow -8. Nasdaq -8. Euro 1.0643. Dollar/yen 114.00. Pound 1.2621.  Gold 1173. Silver 16.47. Copper 2.6095.

Treasury  yields are; 2-year 1.14%, 5-year 1.88%, 10-year 2.43%, 30-year 3.08%.

At 8:30 AM EST (1:30 PM London and GMT; 2:30 PM Frankfurt and Paris; 10:30 PM Tokyo), the Monthly Jobs report is 178K jobs with an unemployment rate at a low 4.6%. The rate will be the headline news number with 4.6% the lowest since August 2007. The jobs number is right in line with the 170K expected with the rate far lower than the 4.9% estimate. The unemployment rate for adult men is at 4.3%. The prior two months of job gains are revised lower by a net 2K jobs. September is revised higher from 191K to 208K and October is revised lower from 161K to 142K.

Wages fall out of bed. Average Hourly Earnings drop -0.1%. Employees lose about three cents per hour. The annualized wage number drops from 2.8% to 2.5%. Wages are going the wrong way. The clock just fell off the wall in Janet Yellen’s office at the Eccles Building. Inflation cannot exist without wage inflation.

If the Fed goes ahead with the hike in a few days, and inflation is a mirage, and wages and job opportunities sink, Yellen may have to lose face in early 2017 reversing the hiking path and considering ZIRP again. That would destroy Fed credibility. Yellen has a lot to think about over the next 11 days; it will be the most important decision she makes as the Fed Chair. The projected two-hike path for 2017 may be reconsidered by the Fed due to the shaky wage data.

Private payrolls are at 156K exactly in line with the 155K expected. The gains in jobs came with professional and business services up 63K, healthcare up 28K jobs and construction gaining 19K jobs. Retail jobs decrease by 8K and 4K jobs are lost in manufacturing. Interestingly, retail jobs are lost at bricks and mortar stores but increase for those providing support to online retail sales.

The Labor Participation Rate is lower to 62.7%. The number of people working in America remains the lowest since the 1970’s. The U-6 rate is at 9.3% the lowest since April 2008. The Average Workweek remains unchanged at 34.4 hours.

The low unemployment rate of 4.6% is immediately plastered across internet news sites. This number is very revealing but not in the happy context everyone is now touting. First of all, any number at 5% or lower is in essence full employment. There are always folks that are unemployed due to factories temporarily closing, seasonal layoffs, workers taking time off to help with a sick relative, a host of reasons, so there is always a base unemployment rate at 3% to 5%.

Therefore, the 4.6% rate is simply a more full unemployment number. Typically, the low rate portends a vibrant growing economy running on all cylinders but that is not happening. In fact, more high-paying manufacturing jobs were flushed down the toilet last month. There are no animal spirits in the economy and markets. People are not running out to look for jobs. An interesting phenomena occurs with the rate after recessions and prolonged slow economic periods.

When the economy is truly improving and ramping higher to receive its glory, the unemployment rate actually pops higher for a short period of time. The reason is the way the data is compiled. The rate is based on whether the person is actively looking for a job. When economic conditions improve and ‘Help Wanted’ signs are in every window, unemployed workers run back to the workforce finally confident that better times are ahead; they have animal spirits of hope and confidence in the economy and future.

The unemployment rate climbs higher since these folks are now counted as seeking employment but in the near-term they are also counted as unemployed. So a more encouraging number for the unemployment rate would have been a rise to 5.2% or higher (rather than drop to 4.6%). An increasing rate would prove that people really believe the economy is in great shape since they are running out confident that they can finally find a job. With a lower and lower full employment number occurring, now down to 4.6% the lowest in decades, it is more of the same- same-o with the economy.

Unemployed folks continue to see a slow stagnant lackluster economy; there is no reason to pound the pavement since there are no jobs. Nothing has changed. The unemployed are sitting at home waiting for the economy to improve. They are watching television, losing skills, and wondering why the government and Federal Reserve rewards the wealthy each day at the expense of common people. The rich become richer and the poor poorer.

American society will pay for the growing income inequality gap; it already is. The wealthy may find that having money is not much fun in a society that is bifurcated into the very rich versus the very poor without a middle class remaining. Human greed is destructive to any economic system. The Federal Reserve has created this rich versus poor society with their eight  years of obscene Keynesian money printing and spending that only rewards the wealthy.

S&P -3. Dow -16. Nasdaq -8. DAX -0.7%. CAC -1.2%. FTSE -0.7%. USD 100.79. US 2-year yield is 1.11%. The 10-year yield drops to 2.40%. Yields may be dropping (bonds rallying) due to the weak wage data.

At 8:34 AM, markets are calm after the data. S&P -1. Dow -10. Nasdaq -5. Russell -1. VIX 14.15. DAX -0.7%. CAC -1.1%. FTSE -0.7%. MIB -1%. USD 100.81. WTIC oil is down -0.4% to 50.86. Brent oil is down -0.7% to 53.55. Natural gas is down -1.1% to 3.47. Gold 1172. Silver 16.52. Copper 2.609.

Treasury  yields are; 2-year 1.11%, 5-year 1.85%, 10-year 2.40%, 30-year 3.06%. The 2-10 spread is 129 bips.

At 8:36 AM, S&P -4. Dow -21. Nasdaq -11. Russell -3. VIX 14.17.

Euro 1.0653. Dollar/yen 113.75. Pound 1.2645. USD 100.86. Mexican peso 20.7340. Canadian dollar 1.3273. Dollar/yuan 6.8877. Aussie dollar 0.7431.

At 8:48 AM, 18 minutes after the data, S&P -4. Dow -25. Nasdaq -12. Russell -2. VIX 14.27. DAX -0.8%. CAC -1.2%. FTSE -0.8%. Euro 1.0640. Euro/yen 121.32. Dollar/yen 114.04. Pound 1.2644. Euro/pound 0.8415. Aussie dollar 0.7421.

WTIC oil is down -0.3% to 50.91. Brent oil is off -0.6% to 53.65. Natural gas is down -0.9% to 3.47. Metals sink. Gold 1168. Silver 16.44. Copper is down -1.6% to 2.60. XLF -0.8%. GS -0.4%. JPM -0.5%. WDAY -15.3%.

Treasury  yields are; 2-year 1.13%, 5-year 1.87%, 10-year 2.42%, 30-year 3.08%. The 2-10 spread is 129 bips.

Fed’s Brainard discusses new technologies that benefit data collection and analysis in the financial industry. She says the Fed and other institutions must remain on guard against cyber threats and computer hacks. Brainard avoids commenting on monetary policy ahead of the FOMC rate decision meeting in 11 days.

At 9:15 AM, markets are steady. A rise in oil helps stabilize the futures. S&P -2. Dow -16. Nasdaq -5. Russell -1. VIX 14.15. DAX -0.6%. CAC -1.2%. FTSE -0.8%. MIB -0.9%. WTIC oil 51.09. Brent 53.81. Gold 1173. Silver 16.58. Copper 2.604.

Treasury yields are; 2-year 1.13%, 5-year 1.87%, 10-year 2.43%, 30-year 3.09%. Markets are sanguine after the jobs data. German bund 0.33%. UK gilt 1.44%.

At 9:30 AM EST, US stocks begin trading sideways. SPX 2191. INDU 19173. COMPQ 5245. RUT 1312. VIX 14.17. Banks are punished. XLF -0.5%. KRE -0.6%. JPM -0.3%. BAC -0.5%. C -0.4%. WFC -0.7%. Energy is strong as oil prices lift. XLE +0.3%. Chips recover. SOX +0.7%. Utilities lead higher. XLU +0.9%.

Thursday, December 1, 2016

Keybot the Quant Turns Bearish

Keystone's trading algorithm, Keybot the Quant, flips short at SPX 2193 after lunchtime. Higher volatility creates market selling. Watch the VIX 13.86 level like a hawk (now at 14.45). Bears win above. Bulls win if VIX falls back below 13.86. Stay alert for a potential whipsaw over the next day. More information is found at Keybot's site;

Keybot the Quant

Note Added Friday Afternoon at 1:54 PM EST:  The VIX 13.86 level is the rudder steering the stock market ship. When the VIX dropped under 13.86 today stocks popped. Then VIX regains the 13.86 and is above 14 so the market bears are winning. VIX 13.86 tells you what you need to know concerning market direction.

Tuesday, November 29, 2016

UTIL Utilities Weekly Chart; Battle for 50-Week MA

UTIL is testing the 50-week MA at 654.49 with important consequences resulting depending on which side price pivots.  Utilities were in a weekly downtrend (a UTIL chart was posted about a week ago; scroll back or type 'UTIL' into the search box at right to bring it up for further study--sort the search by date) and bounced from the initial try at the 50-week support. Price regrouped higher and then ran south again and this time pierced down through the 50-week opening up a trap-door for the stock market. Typically, bad things happen to stocks starting within two months when UTIL is in a weekly downtrend and also loses the 50.

Utes have been weak for a couple months but the stock market shows no sign of weakness in fact the Nasdaq Composite, COMPQ, prints a new all-time high today. This is very surprising behavior for markets and is testimony to the power that the central bankers have in keeping stocks elevated. The Trump Rally is based on government largess which will fund huge infrastructure projects. Government spending and Keynesian central banker money printing rules the markets for the last eight years.

UTIL price bounced off the lows a couple weeks ago and now comes up for a back test of the 50-week MA. This is for all the marbles. Note the beauty in the price movement coming down and bouncing directly off the 50, then falling through and now up for a textbook back test. If the bearish case wins out, UTIL price will collapse from here. This outcome would be very ominous for the stock market in the intermediate term (weeks and months ahead).

If UTIL continues higher leaving the 50-week MA in the rearview mirror, the bulls will rejoice and may be able to keep the stock market buoyant into the new year. Watch 654.49. It tells you a lot about broad market direction 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.

Note Added Friday Afternoon at 1:57 PM EST:  The market bears win the battle with the utilities receiving a firm spank down from the 50-week. UTIL collapses on Wednesday and Thursday down to 622. Ouch. That will leave a mark. UTIL recovers today currently trading at 630 well below the 50-week MA at 654. Market bears smile as they growl softly under their breath.

WTIC West Texas Intermediate Crude Oil Weekly Chart; Sideways Channels; Inverted H&S

Oil is a major focus with the OPEC meeting on tap tomorrow. Iran says it will not agree to a production cut or freeze. Russia says they will not attend the meeting. Prices sink lower WTIC is down -3.9% to 45.27 as this is typed losing that 20-week MA at 46.13. Price may want to back kiss this level.

The big test is the 50-week MA support at 42.75 since it held two times over the last few months. A failure would send oil strongly lower quickly to 40. The green lines show the falling wedge, possie d and oversold conditions Keystone highlighted early in the year and voila, the bottom occurs and oil bounces moving higher. The two-leg bull pattern takes price up to the summer highs.

Price stumbles sideways through the blue channels specifically 40-50. Obviously, bulls win big above 50 and 52 while bears win big below 40 and 38. The red lines show a negative divergence spankdown for October but the indicators now stumble sideways unwilling to predict a path ahead. The ADX is way down at 11 so there is no strong trend in the market which encourages more sideways behavior ahead. The last strong trend was lower during  late 2014 and early 2015.

The inverted head and shoulders (H&S) pattern is in play shown with the grey bars. The head is 30 and neckline at 50 so the upside target is 70 if the neckline is taken out to the upside which is the 200-week MA resistance. The chart hints at a lot of sideways action ahead. The moving averages are lining out sideways representing and encouraging sideways behavior.

Today is OPEC eve so there is no reason to play oil, it is more like gambling than trading. Keystone has no positions in oil currently. Bulls win above 46.13 and bears win below 42.75. Price is at 45.25. 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.