Wednesday, December 10, 2014

NYA NYSE Composite Weekly Chart 40-Week MA Cross Signals Cyclical Bear Market

One of Keystone's cyclical market indicators is the NYA 40-week MA cross. The 40-week MA is 10750; watch this level very closely going forward. The NYA is at 10662 about ninety points under the 40-week MA ushering in a cyclical bear market. Market bulls are in big-time trouble. The two-year cyclical bull market is over.

Reviewing the previous crosses, the Fed stepped in with QE 1 to pump the stock market and prevent capitalism from taking place in March 2009 which created the rally into the early 2010 top. That 14-month cyclical bull ended and the four-month cyclical bear took over in 2010. QE 2 was announced so the Fed's money printing schemes make the rich richer and a cyclical bull runs for 11 months into the August 2011 waterfall crash. That was created by a loss of confidence in the Fed, the budget crisis and the US credit downgrade. The cyclical bear market lasted about six months into the start of 2012.

In 2012, the ECB was jumping on the stimulus bandwagon, Draghi promised to do whatever it takes and the full-fledged global collusion of central bankers was well underway. The Fed began QE Infinity and ZIRP Forever easy money policies so the wealthy, that own stocks, could become filthy rich. Former Fed Chairman Bernanke and Fed Chair Yellen perform the bidding of the large banks, like puppets, since they are rewarded monetarily with easy and lucrative speaking gigs once they leave office. It is all one big incestuous relationship with former bank employees given jobs within the Fed.

From summer 2012 to present the bulls never looked back. The cyclical bull market was a long one about two years. Look at how price stayed above the 40-week MA refusing to fail. In 2013, the obscene stock market gain was due to the BOJ destroying the yen to pump the Japanese and US stock markets higher. The BOJ pumping continues, as well as the Fed this year, and the ECB is ready to offer QE. The PBOC has been pumping the Chinese stock market. The central bankers are the market and have been since free markets and capitalism were flushed down the toilet in March 2009.

In late September the negative NYA 40-week MA cross occurred ushering in the cyclical bear market but the global central bankers colluded once again and came out with both barrels with the Fed, BOE, PBOC, BOJ and ECB all coordinating their policies to goose the stock market from the mid-October low to the high a couple days ago. The rally is historic and driven by the central banker easy money without anything to do with fundamentals. The bulls created the positive cross moving the NYA back above the 40-week punching the bears in the face in October.

The rupture of the 40-week today is a serious matter; markets are in big trouble especially since the 40-week MA was already recently violated and now price has collapsed again. As long as the NYA stays under 10750, the equity markets are in a cyclical bear market pattern which means the bias will be to the downside for stocks for weeks, months and perhaps a year or two ahead. Bulls can reverse the negativity and begin the upside party again if the NYA moves back above 10750. Each day the NYA stays under the 40-week MA another nail is placed in the bull's coffin. If a week or three goes by and the cyclical bear market signal remains, those that stayed long the market will regret it. Watch the 40-week MA closely to guide your trading path 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 1:02 PM on Friday, 12/12/14: The NYA is down to 10583 about 170 points below the critical 40-week MA at 10750 signaling a cyclical bear market ahead (for weeks, months and/or a year or two). The battle continues and the bears keep pressing lower. If the NYA stays under the 40-week MA, the stock market is toast. Bulls will be celebrating with a fantastic recovery and happy holidays if they send NYA back above 10750. If NYA remains weak, the bulls will be crying in their eggnog.

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