Sunday, August 31, 2014

EEM Emerging Markets Weekly Chart Sideways Channel Overbot Rising Wedge Negative Divergence

EEM is another favorite flavor of long traders nowadays as everyone is flush with central banker cash looking for another suitcase to stuff. Emerging market were in a multi-year sideways funk through the 35-43 channel until 3 and 4 months ago when price broke up and out of the 43-44 area. As a result, many are waving banners with EEM letters saying the breakout will lead to wildly higher prices ahead. The chart disagrees.

The breakout is important since a multi-year ceiling gave way, however, an important top is at 45-ish from 2011 so in essence price continues through a larger sideways 5-year 34-45 channel. The red lines show universal negative divergence across all indicators both in the couple-year time frame and the shorter-term few week time frame. The current action shows price climbing up into a rising wedge and stochastics are overbot coming off higher levels both favoring the bears. Watch for the MACD line cross and that will tell you that EEM is cooked, or not.

Projection is for EEM to top out at 45-48 over the coming days or week or three and then roll over down to a back kiss of the 43-44 area and likely move down into the long-term sideways channel through 35-43. The EEM bears need the negative MACD line cross. If the MACD lines remain positive price will coninue drifting higher. The volume of the selling weeks are far larger than the buying weeks. Perhaps the smart money is pumping and dumping. Pundits are cheer leading the emerging market stocks daily and may be sneaking out the back door as Ma and Pa takes their entire life savings and buys EEM always showing up late to the party. 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.

SSEC Shanghai Index China Weekly Chart Sideways Channel

The SSEC has exploded higher in recent weeks causing traders to chase the latest shiny object. The blue sideways symmetrical triangle has 180 points as the vertical side so the upside target after the breakout at 2055 is 2235; bingo. So the triangle pattern is satisfied. Price is at the top rail of the longer term sideways channel through 1980-2260. Many traders are proclaiming the all-clear for China but may be disappointed as the weeks play out.

SSEC is moving sideways without an up or down trend through 2013 into 2014. The pink standard deviation lines squeezed in for a big move which resolved upwards two months ago. Since the central banker money has to flow somewhere, and SSEC had been beaten down in a malaise, and the PBOC (China's Central Bank) keeps adding stimulus as well, the tight band squeeze sends price higher. The indicators are long and strong except for the ROC. The stochastics are overbot at high levels with very little further space higher available. The RSI squeezes out a higher high than the early 2013 high which is bullish that will want to see a higher high in price going forward.

On the bear side, price has seriously violated the upper band so a move back to the middle band at 2089 is on the table as well as the lower band at 1937. The 1937 is under the lower line of the long-term sideways channel. The SSEC still has upside strength available but the move should be more sideways to sideways up rather than parabolic like July. The projection would be for price to top out in the 2250-2300 area, in the vicinity of the upper channel line, say over the next month but will then roll over again and return to the long-term channel targeting the 2090-2140 area as an initial downside target. 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 9/2/14: The SSEC pops +1.4% today up to 2266 within the 2250-2300 area.

TSLA Tesla Weekly Chart Overbot Negative Divergence Sideways Channel

TSLA is a clear outperformer running from under 20 to 272 in four years, +1260%. In the last 17 months, price moves from 40 to 272, +580%, a seven-bagger. The red lines show the negative divergence, overbot conditions and rising wedge that created the February-March top and spank down. The histogram wanted to see another high so price came up for that higher high. With the new all-time high at 272, the dark red lines show universal neggie d across all indicators.

Price has also pegged the upper standard deviation line at 269 so a move back to the middle band at 222 is on the table as well as the lower band at 175. The sideways range through 175-275 is a reasonable expectation going forward. In the VST, the MACD line and stochastics are trying to squeeze out some more upside juice for price but that may only delay the top for a week or two. If you enjoyed the trip higher and held on for these new highs, now would be the time to scale-out moving forward.

Perhaps Tesla is only one car fire away from its chart dropping. TSLA is no longer set up for the long side. Sure some more juice may be squeezed but it is like picking up nickels in front of a bulldozer. Projection is for price to top out in the week or three ahead and travel down to 175-190 where it will bounce and maintain the sideways channel. An 80 or 100-point drop over the weeks and months ahead would be a -30% pull back but no biggie considering the stock is up +580% over the last 1-1/2 year. 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 9/2/14 at 8:55 AM:  Stifel Nicolaus upgrades TSLA proclaiming a 400 price target. TSLA jumps +2.6% pre-market printing at 276.76. Analysts and television personality James Cramer say people are crazy that want to short Tesla. TSLA hits 282.40 in a +4.4% buying frenzy as the 9/2/14 trading day plays out. Shorts are covering creating upside juice.

SPX Weekly Chart Overbot Rising Wedges Negative Divergence Fractals Price Extended

The SPX weekly chart is negatively diverged across all indicators and would be fully agreeable to rolling over right now and trending lower for weeks and months ahead. One fly in the bear ointment would be a positive cross for the MACD lines. The prior fractals for the MACD are shown in the blue boxes. This area is where price topped out in th eprior blue boxes. The caveat would be if the MACD positive cross occurs then the top will likely print at 2010-2030.

The large volume weekly candlestick at the end of July as price was plummeting should be retested so a move into the 1900-1970 area would be prudent to see if volume appears for the bulls, or not. Price is back testing the trend lines from the rising wedge patterns. The daily chart is topping out but may play around for a few more days first so this behavior would be in sync with the weekly chart topping out now or in the week or two ahead. Price is extended above the moving averages requiring another mean reversion (pink dots). Note the pink dots are consistent with the fractal boxes and would project a top anytime between now and a week or two.

So the projection is for the SPX to roll over for lower prices for weeks and months to come, however, if the positive MACD line cross occurs, the SPX should stay elevated at 2010-2030 for a couple extra weeks then roll over for lower prices 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.

SPX Daily Chart Overbot Negative Divergence Developing

The daily chart is negatively diverged across both the longer three-month period and the very short term except for the MACD line and potentially the RSI in the VST. So price will need to pull back right away or say in a day or so, then will want to come back up for another look at current price levels then likely roll over. The intraday all-time record high at 2005.04 printed on Tuesday, 8/26/14, was created with the gravestone doji candlestick. Since then, the next three candlesticks are a doji, doji, and a hanging man for Friday. All four candlesticks indicate a trend change in price on tap but follow-through is needed to the downside for verification.

The RSI is important since if it climbs back up into overbot territory at 70+, the SPX is likely going to top out in the 2020's. The upper standard deviation band is at 2025 and has not yet been touched; this band may trend lower in the days ahead. The 1.24% Fibonacci extension for the move down from late July to early August that retraced 100% is the 2010-2015 level. The upper and lower red trend lines are interesting since they are squeezing price in for an up or down decision on Tuesday or Wednesday (markets are closed on Monday).

If the SPX moves higher in price, it is doubtful the money flow, stochastics and histogram would reverse their bearish slope lower. Markets are very news-driven nowadays in fact the whole rally from the 1905 bottom is on Russia and central banker happy talk. The bottom occurred when Putin said he wanted to seek a peaceful solution in Ukraine. No doubt that Russia had bot a boatload of calls before they goosed the markets with words. Putin gave the rally a second bump at about 1950. Then the Jackson Hole push came with ECB President Draghi hinting at stimulus coming as soon as this Thursday, 9/4/14, and voila, instant rally. Equities continue to be driven higher by the central banker money printing.

The upside resistance is the all-time high at 2005 and the support below is 1990-1991 and then 1985-1986. The 1940-1960 area is the zone where the bulls and bears fought it out intensely with the red doji candlestick displaying equal shadows 11 trading days ago. This zone represents the strong selling volume candlestick and it would be prudent for price to come down into this zone to print a new volume candle and decide if the bulls are stronger to bounce price and head back up to the highs or if the bears are stronger to take price lower. Volume is validity.

The projection is for the SPX to top out at anytime in the days ahead. The upside 2010-2015 and 2020-2030 levels have to be respected. The daily chart will be able to tell a lot more after Tuesday and Wednesday play out especially in respect to the RSI. The SPX weekly chart is negatively diverged across all indicators and would be fully agreeable to price rolling over right now and trending lower for weeks and months 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.

SPX Support, Resistance (S/R), Moving Averages and Other Important Levels for Trading the Week of 9/2/14

SPX support, resistance (S/R), moving averages and other important levels are provided for trading the holiday-shortened week of 9/2/14. Levels shown in bold are strong resistance and support. Bold and underlined levels are very strong and important S/R. The SPX closing and intraday all-time highs from late July were taken out last week. The SPX all-time intraday high is 2005.04 on 8/26/14 and the SPX all-time closing high is 2003.37 on 8/29/14. The bulls are relentless and merciless against the bears. The non-stop stock market upside is fueled by perpetual central banker easy money.

Since price closed at the highs on Friday, any smidge of green in the overnight futures for Monday evening (US markets are closed on Monday for the Labor Day holiday) will catapult the SPX to 2010 and higher. The bears must push under 1995 to create a downside acceleration that will quickly test the strong 1990-1991 support level. A price move through 1996-2003 is sideways action for Tuesday.

The new month of September begins at 2003.37 and money typically flows into the stock market to start a new month. Fireworks will occur on Thursday morning with the ECB Rate Decision and Press Conference at 7:45 AM EST and 8:30 AM EST, respectively. On Friday, the Monthly Jobs Report is released providing the grand finale for the week. The SPX is extended above its moving averages. The daily chart candlesticks for the last four days are interesting with a gravestone doji on 8/26/14 (marking the top) when the all-time high was printed, then a doji, doji, then a hanging man candlestick on Friday, all indicating a change in trend but follow-through to the downside would be needed for verification.

The bulls appear unstoppable and are now in frenzy salivating over the easy money heroin that ECB President Draghi is planning to distribute on Thursday; another central banker drug pusher keeping the long addicts alive. As long as the central bankers keep goosing markets, astute long traders will keep raping the upside for all its worth. The 1990-1991 level is very strong support and the bears would need failure here to prove they can take markets lower. The 1990-1991 failure would lead to a test of 1985-1986 and if that fails, price will drop into the low to mid 1970's.

According to Keystone's proprietary algorithm, Keybot the Quant, copper and volatility are dictating broad market direction currently. Watch JJC 38.77 and VIX 12.53 for clues (bulls need higher copper; bears need higher volatility).

2005 (8/26/14 All-Time Intraday High: 2005.04) (8/26/14 Intraday High for 2014: 2005.04)
2005.04 Previous Week’s High
2003.38 Friday HOD
2003.37 Friday Close – Tuesday Starts Here
2003.37 September Begins Here
2003 (8/29/14 All-Time Closing High: 2003.37) (8/29/14 Closing High for 2014: 2003.37)
2002
2000
1999
1998
1997
1995
1994.65 Friday LOD
1992
1991 (7/24/14 Intraday Top: 1991.39)
1990.52 Previous Week’s Low
1989
1988 (7/24/14 Closing High: 1987.98)
1987
1986 (7/3/14 Intraday Top: 1985.59)
1985 (7/3/14 Closing High: 1985.44)
1984
1982
1980
1979
1978
1977
1976
1974
1973
1971.06 (200 EMA on 60-Minute Chart a Keystone Market Turn Signal)
1970
1968 (6/24/14 Intraday Top: 1968.17)
1966.28 (50-day MA)
1965
1964
1963.35 (20-day MA)
1963 (6/20/14 Closing High: 1962.87)
1962
1961
1960
1959
1958
1956 (6/9/14 Intraday Top: 1955.55)
1955
1951 (6/9/14 Closing High: 1951.27)
1949
1947
1942
1940
1937
1936
1935.62 (20-week MA)
1931
1930.97 (100-day MA)
1929
1928
1925
1924 (5/30/14 Intraday Top: 1924.03) (5/13/14 Closing High: 1923.57)
1923
1920
1919
1912
1910
1907
1902 (5/13/14 Intraday Top: 1902.17)
1901
1900.83 (150-day MA; the Slope is a Keystone Cyclical Signal)
1897 (5/13/14 Closing High: 1897.45) (4/4/14 Intraday Top: 1897.28)
1894
1891 (4/2/14 Closing High: 1890.90)
1889
1887.03 (10-month MA; a major market warning signal)
1886
1885
1884 (3/21/14 Intraday Top: 1883.97) (3/7/14 Intraday Top: 1883.57)
1882
1880
1879
1878.82 (200-day MA; not tested for 20 months extremely odd behavior)
1878 (3/7/14 Closing High: 1878.04)
1877
1874
1872
1871
1868
1867
1865
1862
1859.04 (12-month MA; a Keystone Cyclical Signal) (the cliff)
1859
1855
1854.68 (50-week MA)
1853
1852
1851 (1/15/14 Intraday Top: 1850.84)
1849 (12/31/13 Intraday High Top for 2013: 1849.44)
1848.36 Trading for 2014 Begins Here
1848 (1/15/14 Closing High: 1848.38) (12/31/13 Closing High for 2013: 1848.36)
1846
1845
1843
1842
1841
1840
1839
1838
1837

Saturday, August 30, 2014

INDU Dow Industrials Monthly Chart Overbot Rising Wedge Negative Divergence Price Extended

The prior SPX monthly chart shows a long and strong MACD line for the last few months that will want to see another high for the SPX price after a pullback occurs. The COMPQ (Nasdaq) monthly chart is set up the same as the SPX. The RUT monthly chart has already rolled over and received the spank down off the top with its negative divergence. Interestingly, the Dow chart above has now locked in universal neggie d across all indicators after the new all-time intraday high printed at 17153.80 last Tuesday. The MACD is negatively diverged so the Dow has ran out of gas.

The RSI may sneak up into overbot territory again if the SPX and COMPQ keep goosing equities higher but the RSI should remain negatively diverged compared to the December 2013 high and the 2007 top. Ditto the money flow. What does all this mumbo-jumbo mean? The Dow should roll over from here and it is likely that the Dow has printed a multi-year top or will in the days ahead. The pink dots show what happens when price becomes overextended above the moving averages; a mean reversion. The red rising wedge is extremely ominous since the failures from rising wedges can be quite dramatic.

The projection is for the Dow to receive the negative divergence spank down in September. After equities sell off and a bounce occurs, the SPX and COMPQ should come back up to the current levels for one last look, however, the Dow has no interest in printing any further higher highs in price. THE top may be in for the Dow which follows THE top in the RUT placed in July with the intramonth high and bearish engulfing monthly candlestick. So the Russell 2000 small caps rolled over first, Dow should be next then the SPX and Nasdaq. The chart forecasts the Dow to roll over moving forward for the weeks, months and potentially year or two ahead. These are monthly charts so give or take a few weeks but a prudent call is that equities are printing a multi-year top with all indexes likely peaking and rolling over within the coming weeks. 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 Monthly Chart Overbot Rising Wedge Negative Divergence

The monthly charts receive new prints on Friday as the last day of August trading occurs. The SPX is up six of the last seven months and up 10 of the last 12 months. The central bankers can throw one heck of a party with the easy money from the Fed, BOJ and other printing presses flooding into markets pumping equities higher to make the rich, that own stocks, richer. The people in power are simply making themselves wealthier and to H*ll with the rest of the country especially the middle class, now the lower middle class, and poor. No matter how much the Fed and democrat and republican politicians wax faux worry about the lack of jobs and such, they are fully aware of what they are doing and how it is lining their own pockets where they will never have to worry about finances in their personal lives ever again.

Last month, we were continuing to look for upside since the indicators were not completely negatively diverged to identify the multi-year top. The bulls keep finding ways to squeeze out juice (the rich uncle that constantly saves the day is the central bankers) and the MACD line still has a sliver of bull juice available to create additional highs in the SPX after a selloff occurs. The rising maroon wedge is extremely ominous since the collapses from rising wedges can be quite dramatic. The long holders will be whacked as the weeks and months play out. The overbot conditions, rising wedge and negative divergence (sans the MACD in the VST) all indicate a substantial top is forming and nearly in place. If the SPX would not have closed the month at the highs, the MACD line may be negatively diverged right now which would identify the multi-year top but instead the bulls are going to stretch it out for a couple more months due to the long and strong MACD line. The neggie d with RSI, histogram and stochastics, however, will slap the SPX south for an initial spank down in September.

The chart set-up forecasts a lower September, or September-October, then move back to current levels for October-November, which would be the multi-year top where prices will then trend lower for months and perhaps years ahead. October has a reputation as the crash month but there probably needs to be two candlesticks to create the neggie d on the MACD so perhaps late October or early November may be more likely for THE top. Note that for the ADX, the downtrend in 2008-2009 was stronger than the current 5-1/2 year rally uptrend. The market top will be identified by the ADX rolling over to the downside. Volume is weaker and weaker as time moves along. A more selective group of stocks, such as AAPL, are driving the upside on thinner volume which is a bearish signal.

The bulls have a smidge of juice remaining due to the MACD line. The forecast is a pull back over the next month or two, then back up for another look at SPX 2000, where the MACD will roll over and the multi-year top will be in place. It will not be long for the bears; they will finally receive their retribution for the central banker 5-1/2 year rally in the weeks and months ahead. Equities should place the multi-year top, like 2000 and 2007, at any time over the next few weeks or two months as soon as the MACD line rolls over. As markets drop in the weeks and months ahead and the selling exceeds -10% for a correction, the long holders will probably start dumping positions unwilling to relinquish the obscene gains in recent years which will accelerate a down move and likely expose the air pockets underneath. There is likely from 15% to 80% fluff in the stock market due to the central banker intervention that has destroyed price discovery across all asset classesWatch the 10 and 12 MA's very important market levels. The bear's day in the sun will be coming very soon; pay attention to the MACD line rollover. 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.

Friday, August 29, 2014

SPX 30-Minute Chart 8/34 MA Cross Sideways Symmetrical Triangle Tight Squeeze on Standard Deviation Bands

When a month is strong, it tends to finish weaker which occurs with the top on Tuesday and a drift sideways to sideways lower since. Seasonality-wise, the couple days in front of a three-day holiday weekend tend to be bullish. Today is typically about a 70% bullish day. So the bulls may be able to muster up some bullishness into the weekend.

The 8 MA remains below the 34 MA signaling bearish markets for the hours ahead. Bulls got nothing unless the receive the positive 8/34 cross. The 8 MA is at 1997.20 so bears need the SPX below 1997 to keep this moving average moving lower while bulls need the SPX above 1997 to send the 8 MA higher to provide a positive 8/34 cross. The tight standard deviation bands (green) are squeezing in tight for a big move (in this 30-minute candlestick time frame). The blue sideways symmetrical triangle is in play reinforcing the deviation bands also predicting a strong move one way or the other. The vertical side of the triangle is 15 to 17 handles thus, if bulls win with a move above 1998 then 2013-2015 is targeted. If bears win with a move under 1995 then 1978-1980 is targeted. The triangle only has space for one to three more candlesticks so a winner will likely be christened today leading to a happy finish to the week ahead of the holiday for one side at the expense of the other.


Keybot the Quant remains long but almost flipped short yesterday. If the VIX moves above 12.54 today, Keybot will likely flip short. VIX is currently at 12.30. Volatility and copper are dictating market direction currently. Bears win big if VIX moves above 12.54. Bulls win big if JJC moves above 38.79. There should be a big move on tap today unless bulls and bears can line things out dead flat from here delaying the move until Tuesday's opening bell. Equities will travel sideways today with a slight upward bias if VIX remains bullish and JJC remains bearish (which is the current price action in real-time now). This would set up the big move for Tuesday morning (US markets are closed on Monday in Observance of the Labor Day holiday). Markets finished strongly higher the day before the Independence Day holiday only to be bludgeoned when traders returned to work the following week nursing hangovers. The Labor Day holiday may follow similar behavior to the July 4th holiday?


Watch the bull breakout level at 1998-2001 and bear break down level at 1994-1996. The SPX would flush lower if the 1990-1991 support is lost. The SPX will accelerate higher if the all-time high resistance at 2005 is taken 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 11:14 AM:  The JJC is 38.37 remaining firmly bearish under the 38.79 bull-bear line in the sand. The VIX is 12.15 retreating lower remaining below the 12.54 bull-bear line in the sand providing upside bull juice. The SPX is at 1999, now 2000, threatening to break out higher as discussed above. The TRIN is 0.87 firmly in the bull camp helping create market buoyancy today. The beat goes on. Watch the HOD at 2001.35 which will open the door to 2005 and the path higher. Bears need to push volatility higher immediately and prevent the SPX 2001 handle from printing.

Note Added 5:53 AM on Saturday, 8/30/14: The bulls slap the bears in the face again, as is typically the case. A late days surge higher finishes the day with the SPX closing at the highs at 2003.37. The 8 MA crossed up through the 34 MA at 11:30 AM only fifteen minutes to one-half hour after the last message placing the bulls in charge of markets for the hours ahead; the fix was in. The pre-holiday bullishness carries the day verifying the 70% bullish seasonality expected for yesterday. Since the surge occurred at the very end of the day to move the bulls up through the 1998-2001 breakout area, the bears have a sliver of a door opening available on Tuesday morning to create negativity with a negative news flow over the weekend. If the geopolitics are stable, the bulls will continue running higher to the 2013-2015 target and at that point the 2020's are likely. The bears can revese the positive thrust higher if they prevent a breach of the all-time high at 2005. If 2005+ prints, the SPX is likely on its way to 2013-2015. JJC ends at 38.34 well below the 38.79 line in the sand continuing to cause market negativity. Bulls need higher copper or they will stall. VIX ends at 11.98, under 12, and well under the 12.54 line in the sand causing market bullishness. Note how the bears made a run in the afternoon pushing VIX all the way up to 12.44; only one more dime and markets would have sold off hard into the weekend, instead, the bears are slapped in the teeth and volatility drops like a stone during the last hour of trading creating the bull fuel for the upbeat bull finish. The newspaper and headline writer's are happy since the SPX 2K printed and this can be hyped all weekend long. The SPX continues the trend higher, however, the bulls will have limited juice unless they can push copper higher.

Thursday, August 28, 2014

COMPQ Nasdaq Daily Chart Megaphone Expansion Patterns Upward-Sloping and Sideways Channels Overbot Negative Divergence

The Nasdaq shows a strong sideways channel through 4350-4500. The 4350 level was/is the level for a neck line for head and shoulders patterns. An H&S pattern was nullified in early August where price kept on moving higher instead of creating a right shoulder. That 4480-ish level is the area of the triple top and worth a mention. Many technicians will say "there is no such thing as a triple top." Sometimes they are correct and sometimes not. Keystone considers it a 50/50 toss-up since some triple tops hold, and some do not, likewise, some triple bottoms hold, and some do not. There is no firm guideline to use. But in this instance, note how price came up in early August and instead of holding the triple top kept on going nullifying the triple top pattern.

Price is honoring the megaphone patterns shown in blue and purple. The handle is drawn to create the picture of a megaphone. These patterns are also simply called expansion patterns. Price blew out the top rails but is retreating for back kisses today. The expectation is that price would continue lower back inside the megaphones. The current price levels may serve as the head for a future H&S pattern that will have to be followed as it develops. Note that the lower targets for the megaphone patterns are in the 4250-4300 zone exactly where the 200-day MA will be coming up through to form a confluence of support.

The red lines show negative divergence for the indicators except for some VST juice in the money flow (green line) that would like to see a higher high in price after today's initial pullback occurs. The weekly chart is setting up very weak with negative divergence in place or developing so the projection would be for price to roll over in the days and weeks ahead. The volume continues to drop off showing a lack of trader enthusiasm. 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.

JGBS Inverse Japanese Government Bond Futures Daily Chart

Keystone continues to like the JGBS play which is a very thinly traded inverse Japanese Government Bond Futures ETN. It is a play to hold as an insurance policy in case any bad news hits concerning Japan on any given night. Japan yields remain extremely low the lowest around the world. With notes and bonds as demand rises price rises and yields drop and inversely, as demand falls price falls and yields rise. The JGBS is an inverse to the price. Thus, the chart above drifts ever lower as the Japanese Govt Bond Futures price moves ever higher with yields lower. A long play with JGBS is looking for a rise in Japan yields and corresponding lower price, which will send the chart above higher. Japan's economy is very shaky and may create an event out of left field.

JGBS continues slipping lower into a falling wedge with oversold conditions and positive divergence. Price may play around at these levels over the next month but a move higher is likely on the way receiving a possie d bounce. Price is under the moving averages at where prior mean reversions began. Price tagged the lower standard deviation band (pink) so a move back to the middle band at 18.69, at a minimum, would be expected, if not a move to the upper band at 18.88

Global note and bond yields may remain low for months or even a few years before the inflation and hyperinflation hits, however, Japan may react differently with yields rising faster. The chart set-up is attractive from a long perspective so the narrative is molded around the technical's. Keystone has a JGBS long position open and added more this week. Caution is required since the instrument is thinly traded. 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.

BPSPX Bullish Percent Daily Chart

High drama with the BPSPX market indicator. Type 'BPSPX' into the search box at the right to bring up previous charts for further study on this indicator. From the 84.5 top, price drops six percentage-points through 78.5 which is a market sell signal. A double-whammy sell signal occurs when the BPSPX drops under 70. The bears popped the champagne corks and began celebrating the deteriorating stock market in early August but Russian President Putin provided happy talk to create a news-driven market bottom at SPX 1905 and immediate relief rally. The bears were frantically trying to place the corks back in the bottles.

The bears need the BPSPX under 70 to verify an extended and sustainable move lower for stocks. The bulls have a different idea and want to reverse the down move by six percentage-points to take away the sell signal and create a market buy signal verifying that the upside move is real and has further legs. The recent bottom is 70.5 so the bulls need 76.5 to receive the market buy signal and pop the champagne corks. Close but no cigar; only a half-buck away.

So keep an eye on the BPSPX. If price overtakes 76.5 and heads higher the SPX will easily run to the 2020's and higher. If the bears can reverse the recovery rally move and send the BPSPX under 70, market carnage will follow. 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 Weekly Chart C&H Upward-Sloping Channel Overbot Rising Wedge Negative Divergence

Apple is all the rage nowadays. A smaller and smaller and more selective group of stocks are sending the stock market higher on light volume (not a healthy sign for the overall market). AAPL is one of those stocks. Apple fell out of favor in 2013 but now has rallied from under 55 to over 100, a double, in one year's time. You must wear a toga when you visit the Apple offices since every day is a wild upside orgy, however, Caligula just left the building since AAPL is topping out.

The blue C&H (Cup & Handle) pattern shows a cup base at 55 and breakout line at 80, a difference of 25, thus, a target of 105 is on tap if 80 is violated (80+25), which it was in April and price never looked back. At the 102-103 area the C&H is pretty well satisfied. The indicators are negatively diverged across the two-year peak-to-peak period as well as in the near term (over the last few months) except for the MACD line that wants another high in price after a pull back occurs (green line). Thus, a drop in price is expected say for a few days or week or two, then up again to print above 102-103 over a few days or week or so, then price tops out with the MACD negatively diverging in the short term opening the door to an extend move lower.


The pink standard deviation lines squeezed out the big move higher in the spring time that placed the C&H upside target at 105 in play. The neon green upward-sloping channel is in play with price at the top rail. In the days and weeks ahead, price will jog as previously described topping out in this 102-110 area (although an orgy spike to 125 cannot be completely ruled out especially if there is positive hype released concerning iPhone6 or iWatch in the coming days), followed by lower prices going forward. The 95 is a logical initial downside target (lower channel rail and horizontal support) then 91. The prior top was marked with a doji candlestick.


If long AAPL and having enjoyed the ride higher start scaling out. The momo move higher has energy so it will probably take one month to peak out and roll over. This period will coincide with the releases of the new products. Since the MACD line wants another high, perhaps watch the pending pull back say over the coming days and week or two, then when price rallies again, short into that rally. If you are a nimble trader you can likely play a quickie short position right now since the daily chart is oversold with neggie d and price will drop; just do not get greedy on the near term pullback. The projection is that Apple will top out and roll over during the next four weeks with price dropping back into the 90's headed to the low 90's. 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.

Wednesday, August 27, 2014

SPX Daily Chart Upward-Sloping Channel

The daily chart remains bullish in the VST. The upward-sloping blue channel remains in play with price teasing the lower rail. The rally move off the 1905 bottom is parabolic. It started with Putin happy talk concerning Ukraine and note how the news overrode the weak and bleak indicators that were in place wanting to see lower lows in price. The rally continued with more Putin happy talk about half way along the up move then on Friday happy talk about more stimulus, especially from ECB President Draghi, created the push higher this week. The entire rally over the last couple weeks is news-driven. Traders are like Pavlov's dog and immediately buy stocks when anyone mentions words like the Fed, central bankers, QE, stimulus, etc...

The maroon lines show universal negative divergence across the peaks creating the possibility of a double top, or M top pattern, now in place. For the very near term, however, the short green lines for RSI, MACD line and money flow want to see higher highs for price after any pull back. Typically, what would be expected is a day or two of weakness due to the neggie d on the stochastics, histogram and ROC, then price returns to current levels where the RSI and money flow should roll over creating another move lower, but then one more move higher would likely occur to roll the MACD over to the downside. So that is two jog moves; down, up, down, up, down. Each move likely needs a day or three so equities may stay buoyant at the 1991-2011 area for a week or three before the firm top is in place and more extended downside begins. The weekly chart is in firm negative divergence across all indicators and wants the SPX price to simply begin falling here forward for the weeks and months ahead.

Note the paltry volume for the historic 2K prints; volume is at the lowest levels of the year; the July 4th holiday the only volume candlestick lower. As far as regular session days go these volume levels are the lowest of the year not exactly a ringing endorsement of the upside. Bulls will, however, quickly point out that many traders are on vacation so volume should be light.

The projection is for price to top out in the days and week or two ahead. Typically when a month is strong it will finish weaker in the last days of the month, however, seasonality-wise, markets are bullish in front of a holiday weekend, so choose your poison. The forecast would be for a down move say into mid Thursday then perhaps up into the weekend. Then next week another jog move as the chart sets up with universal negative divergence and the RSI may sneak into overbot territory. A 1.236 Fibonacci extension for the rally would place price at 2009-2011 so perhaps this is the target for bulls next week. Markets are expected to top out over the coming days and week or two and may be potentially printing a multi-year top right now. The weekly chart is agreeable to extended selling and market weakness to occur at any time and continue forward for a few weeks and months. The daily chart above needs a few additional days to roll over. 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 2-Hour Chart Overbot Rising Wedge Negative Divergence Fibonacci Retracements

The 2-hour chart has been interesting to watch over the last week waiting for the negative divergence to develop. It was like waiting for Godot but Godot finally arrived. The red lines show the rising wedge and negative divergence that set up the Friday spank down but the down move did not have any bones to it because of central bankers at Jackson Hole promising to continue the money printing. ECB President Draghi's hinted at a stimulus announcement perhaps as early as the next meeting on Thursday, 9/4/14, creating the spike higher to begin this week. Germany's Finane Minister Schaeuble tosses a wet blanket on the trader zeal for European QE saying that Draghi's comments were "overinterpreted."

Technically, the chart continued setting up negative divergence with the maroon lines as it absorbed the Draghi joy. The indicators are all in neggie d so a spank down and lower prices is expected for the 2-hour candlesticks ahead. The move lower started yesterday so today will determine if it continues. The 1991 is a reasonable downside target in the near term. The Fib retracements show the 1967 level (38% Fib) as a downside target as long as the top remains in at this 2000-2005 level. Since price recovered 100% of the down move from 1991 to 1905, a Fibonacci extension move of 1.236 is a useful target. Applying the 1.236 extension to the 86-point drop yields an upside target at 2009-2011. Price printed an all-time high yesterday at 2005 in the neighborhood but about five points shy of the 1.236 Fib extension (sometimes this is close enough for government work). The money flow and RSI are weakening wanting to see lower lows in price. The MACD lines performed a negative cross (bearish).

The pink boxes show how the trend lower in late July and early August was a strong trend lower (ADX above 30). Note how for this complete price recovery and new market highs the ADX remains far lower than the levels for the selling move one month ago. The ADX is at 29 showing a strong trend for the upside, however, the ADX is below the high from Friday negatively diverging. Considering the rising wedges, overbot levels, neggie d and lackluster ADX, a move lower to the 1991 support is a reasonable expectation and then the action can be reassessed. Any move higher above 2005 should result in further negative divergence. 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 30-Minute 8/34 MA Cross

The 8 MA remains above the 34 MA signaling bullishness for the hours ahead, however, the 8 MA is curling downward towards and upward-sloping 34 MA for a potential negative cross today. Bears got nothing until they receive the negative 8/34 cross. Note how the bulls always spoil any bear joy as they did for the potential negative crosses on Friday, 8/15/14, and Friday 8/22/14. Will the bears finally receive a turn at bat? As long as the SPX price continues to trend lower under the 8 MA at 2001.60 the 8 MA will continue lower.

The red rising wedge, overbot conditions and negative divergence (red lines) place the tops on Monday and yesterday. The indicators remain weak and bleak across the board so lower lows in prices are expected. The S&P futures are up +2 about 3-1/2 hours in front of the opening bell. The pink box shows the ADX above the mid-20's indicating a strong trend higher for price, however, on Friday the ADX drops under 25 and moves lower down to 13 showing that the strong uptrend is over. The market bears need the SPX price to continue leaking lower and the ADX to move above 25 to show that a strong downtrend is in place. If the SPX moves lower in price but the ADX remains under 25, the down move has no bones to it, and the bulls will likely retake control.

The stochastics drop under 50% which will create more negativity. Bears need the RSI to drop into bear territory under 50. A reasonable assumption today is for price to continue falling and the 8/34 negative cross to occur favoring the bears for the hours ahead despite the higher futures currently. Watch the 8/34 cross since it tells you the market direction 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 12:37 PM:  The 8 MA slices down through the 34 MA signaling bearish markets for the hours ahead as long as the bears can maintain the negative cross.

Tuesday, August 26, 2014

INDU Dow Industrials New Record All-Time Intraday High

At 10:48 AM, the SPX prints another new all-time intraday record high at 2003.81. The bulls are in frenzy pushing equities higher. The SPX prints above 2004 at 10:54 AM. The Dow is beginning to break out to new all-time highs now at 17150 only a buck away. The all-time intraday high for the Dow is 17151.56 on 7/17/14 five weeks ago. The Dow all-time closing high is 17138.20 on 7/16/14 so the Dow is already above this number and will print a new record closing high if price remains above 17138.20. The bulls are relentless providing no mercy to bears. Short-covering creates mini boosts in equities.

News wires say that Hamas and Israel have reached a new cease-fire deal which adds further bull fuel.

At 11:10 AM, the Dow moves above the prior all-time record high and prints a HOD at 17152.23 overtaking the prior record by less than one point. At 11:16 AM, both the SPX and INDU print further new all-time highs. The bulls are fueled by central banker easy money and the shorts giving up the fight. Interestingly, the VIX turned positive a short time ago and despite the new record market highs, volatility is moving higher continuing yesterday’s theme. Volatility and equities move inversely over 90% of the time so something very special is ongoing in markets currently. One of them is wrong; either volatility will plummet to prove the market upside is real and sustainable, or, the stock market will begin retreating to honor the higher volatility.

At 11:16 AM, the SPX prints 2004.86 and the Dow prints 17153.80 the highest numbers in stock market history. The trannies are near but not threatening new all-time highs as yet. Dow Theorists will be looking for this follow-through. The NDX is currently logging a 10-day winning streak printing 14-1/2 year highs. The stock market is led higher by the larger cap tech stocks such as AAPL and GOOGL; this is why the NDX is outperforming. This price action is concerning since one of the signs of a significant stock market top is when a smaller and more selective group of stocks continue to push the broad indexes higher; like now.

The joy in today’s market sends European markets strongly higher. At the same time, the European bond yields continue to print record low yields. JPM says that the ECB will provide an easing program next week which creates more stock market bull fuel. Stocks may be printing record highs in the States and strong in Europe but at the same time investors continue chasing into notes and bonds (higher prices lower yields). All asset classes move higher fueled by the central banker easy money. Global assets are overpriced across the board due to the multi-year central banker intervention. The Fed and other CB’s have destroyed price discovery; no one actually knows what any asset is truly worth anymore.

Bullish traders are staggering around trading floors drunk off the Fed wine and buying any stock with a heartbeat; it does not matter what stock since the central bankers will continue pumping markets higher forever. Markets are typically bullish the last two days before a holiday weekend (Thursday and Friday of this week) but the party has already started. The dollar/yen moves above 104 so the weaker yen fuels the market upside. The 10-year yield remains steady at 2.39%. JNK (high-yield bond ETF) sneaks higher above the June record highs.

At 3 PM EST, the INDU is printing at 17126 trying to close above the all-time closing high at 17138 but remaining 12 points away. The Dow HOD and new all-time intraday record high is 17153.80 from 11:16 AM. 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 4:02 PM EST: The session ends with the INDU printing a new all-time intraday high at 17153.80 but not a new all-time closing high. The all-time closing high at 17138.20 from 7/16/14 remains in place. Volume remains light.

SPX Prints New All-Time Record Intraday High and New All-Time Closing High Above 2000

At 9:30 AM EST, the opening bell sounds and the SPX prints 2000 again in the first minute of trading. The bulls are unstoppable as they break open the lock on the liquor cabinet door and begin drinking and celebrating early. The Dow is above 17.1K again and SPX moves above 2001; a stock market odyssey. The dollar/yen is dead flat at 103.88. The VIX is dropping and the SPX is climbing.

At 10 AM, Consumer Confidence is 92.4 up from the 90.3 last month and well above expectations. At 10:01 AM, the SPX prints an all-time intraday record high at 2002.77. The headline Con Con is robust and equities move sideways after an initial drop off the new all-time high.

At 10:48 AM, the SPX prints another new all-time intraday record high at 2003.81. The bulls are in frenzy pushing equities higher. The SPX prints above 2004 at 10:54 AM. The Dow is beginning to break out to new all-time highs now at 17150 only a buck away. The all-time intraday high for the Dow is 17151.56 on 7/17/14 five weeks ago. The Dow all-time closing high is 17138.20 on 7/16/14 so the Dow is already above this number and will print a new record closing high if price remains above 17138.20. The bulls are relentless providing no mercy to bears. Short-covering creates mini boosts in equities with the SPX at 2004.73 at 11:03 AM.

News wires say that Hamas and Israel have reached a new cease-fire deal which adds further bull fuel.

At 11:10 AM, the Dow moves above the prior all-time record high and prints a HOD at 17152.23 overtaking the prior record by less than one point. At 11:16 AM, both the SPX and INDU print further new all-time highs. The bulls are fueled by central banker easy money and the shorts giving up the fight. Interestingly, the VIX turned positive a short time ago and despite the new record market highs, volatility is moving higher continuing yesterday’s theme. Volatility and equities move inversely over 90% of the time so something very special is ongoing in markets currently. One of them is wrong; either volatility will plummet to prove the market upside is real and sustainable, or, the stock market will begin retreating to honor the higher volatility.

At 11:16 AM, the SPX prints 2004.86 and the Dow prints 17153.80 the highest numbers in stock market history. The trannies are near but not threatening new all-time highs as yet. Dow Theorists will be looking for this follow-through. The NDX is currently logging a 10-day winning streak printing 14-1/2 year highs. The stock market is led higher by the larger cap tech stocks such as AAPL and GOOGL; this is why the NDX is outperforming. This price action is concerning since one of the signs of a significant stock market top is when a smaller and more selective group of stocks continue to push the broad indexes higher; like now.

The joy in today’s market sends European markets strongly higher. At the same time, the European bond yields continue to print record low yields. JPM says that the ECB will provide an easing program next week which creates more stock market bull fuel. Stocks may be printing record highs in the States and strong in Europe but at the same time investors continue chasing into notes and bonds (higher prices lower yields). All asset classes move higher fueled by the central banker easy money. Global assets are overpriced across the board due to the multi-year central banker intervention. The Fed and other CB’s have destroyed price discovery; no one actually knows what any asset is truly worth anymore.

At 11:29 AM, the SPX prints 2005.04 another record high. The COMPQ joins the party printing a new 14-1/2 year high at 4573. Bullish traders are staggering around trading floors drunk off the Fed wine and buying any stock with a heartbeat; it does not matter what stock since the central bankers will continue pumping markets higher forever. Markets are typically bullish the last two days before a holiday weekend (Thursday and Friday of this week) but the party has already started. The dollar/yen moves above 104 so the weaker yen fuels the market upside. The 10-year yield remains steady at 2.39%. JNK (high-yield bond ETF) sneaks higher above the June record highs.

At 3 PM EST, the SPX is printing at the 2002 palindrome trying to close above 2K for the first time in history. The new record all-time intraday high is 2005.04 the 11:29 AM high remaining in place so far 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.

Note Added 4:01 PM EST: The session ends with the SPX printing a new all-time intraday high at 2005.04 and new all-time closing high at 2000.02. The SPX closes above 2K for the first time in history--albeit by two pennies. Volume remains light. Keystone plays the Twilight Zone theme song on his Martin as he watches to see if price settles at the 2000.02 palindrome, or not.

Monday, August 25, 2014

SPX PRINTS 2000 FOR THE FIRST TIME IN HISTORY

US futures are +9 remaining elevated all night long into the opening bell. Global traders are excited that ECB President Dragi will likely announce new stimulus in the near future. The central bankers are the market.

Trading begins with the SPX leaping higher to 1998 in the opening minutes within two points of the psychological 2K level. Surprisingly, the VIX is up with the SPX up so one of them is wrong. The MIB (Italy) is up -1.5% and European markets are printing at the highs firmly above +1% and higher on Draghi joy.

At 9:47 AM, traders are on pins and needles waiting for the SPX 2000 to print. The vendors have already printed SPX 2000 hats so how could the index deny the party? The new all-time high is 1998.26 printing at 9:33 AM. The SPX takes out the new highs at 9:50 AM with price only one point from 2K. Dollar/yen 104.01. The 1999 handle prints at 9:56 AM. The HOD and new all-time record high is 1999.71. The TRIN is at 0.80 clearly favoring the bulls today. The Dow is up over 100 points at 17105 above 17.1K.

At 10 AM, New Home Sales are down -2.4% well under the +7.4% expectations with 412K sales under the 422K last month. The data conflicts with the housing sector news last week which was universally positive helping create the up move in equity markets. The broad indexes stutter sideways after the data with the SPX now only pennies from 2K. HOD 1999.83.

At 10:10 AM EST, the SPX prints above 2000 for the first time in history. The hat vendors are relieved as the imprinted 2K hats are distributed. The SPX crossed the 1000 price level 16 years ago on 2/2/98. The energy sector is the top performing sector over the 16-year period. The remarks from ECB President Draghi at Jackson Hole hinting at pending stimulus fuels the market upside. The central bankers are throwing one heck of a near six-year party.

The SPX retreats quickly after the 2K print now at a 1998 handle at 10:26 AM. The day is young and it will be interesting to see if follow-through occurs, which would be expected once a psychological threshold is overtaken. Volume is light again just like each day of the rally last week. Last Friday's volume was at the lowest levels of the year. 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 8:17 PM: The SPX 2000 hats were donned at 10:10 AM with the SPX above 2K, however, shortly after noon time today, the hats had to be returned as the SPX fell under 2K and closed below but at a new all-time closing high at 1997.92. The HOD and new all-time record intraday high on the SPX is 2001.95; above 2K for the first time in history. The 2002 is a palindrome just like the prior top about one-week ago at 1991. Interestingly, the March 2009 bottom closing print was 676 another palindrome. The SPX 30-minute, 1-hour and 2-hour charts are set up with or setting up with negative divergence. The daily chart still has long and strong juice as mentioned last week. A price move to 2002 to confirm negative divergence across all indicators for the minute and hour charts should begin a down move. The charts were rolling over Friday but the central banker juice sent equities higher and the news is being absorbed into the charts now. Watch for the negative 8/34 MA cross on the SPX 30-minute. If copper continues higher so will markets.

INTC Intel Weekly Chart Inverted H&S Patterns Overbot Rising Wedge Negative Divergence Developing

Intel has been on a tear higher taking no prisoners as long traders trip over each other to buy the chip darling. The price move is parabolic from the May bottom moving from 25.5 to 35.0 in only 15 weeks, +37%, a phenomenal move. INTC is moving up over +2% per week, every week, for over three months. This is wildly bullish behavior. The central banker easy money has to flow into something and Intel is one of the recent favorite flavors. The blue inverted H&S with head at 18 and neck at 21 targets 24 which was easily achieved. Then the green inverted H&S with head at 18 and neck line at 25 targets 32 which was achieved.

As always, day follows night, and all waves crest, and INTC is beginning to top out. The indicators are negatively diverged except for the MACD line that wants a higher high in price after a pull back. The other indicators will create the pull back over the next week or two, then up again at 35+, but at that time the MACD line would negatively divergence and announce the top.

So with INTC it is not attractive to be long or short right now. If you enjoyed the long side you can take half off the table now ahead of a pull back, then the other half when price comes back up to satisfy the MACD long and strong profile. Check the MACD line in a week or two to see if it has rolled over, if so, then a short position can be opened and scaled into with a retreat to 32 likely over the month or two 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 8:35 PM:  INTC begins the week on the downside losing -0.4% on 8/25/14 and ending the day at 34.81.