Sunday, November 30, 2014

SPX Weekly Chart Overbot Negative Divergence

The SPX monthly chart was posted yesterday so scroll backwards for further study or type 'SPX' into the search box at the right to bring up that chart. The weekly shows the spectacular central-banker fueled orgy from the mid-October bottom at 1820 to the all-time historic top on Friday at 2075.76; a 256-point move in the last six weeks, +14%! If you recall, the top in September was an easy call with the negative divergence (red lines), overbot conditions and the rising wedge pattern. It is very surprising that price recovered as strongly as it did but then again the six-week rally is purely due to the collusion of global central bankers so it is not all that surprising. In 'normal' markets price would have never recovered like it has.

The maroon lines show the neggie d remaining for the new price highs with the exception of the histogram trying to squeeze out more upside juice as well as the very near-term momo in the MACD line. So a jog move may be on tap where equities sell off for a week then recover for a week then roll over again. The volume is dropping off during the entire up move and nowhere near the capitulatory-style volume at the mid-October lows. The brown circles show distribution taking place during 2014 with the smart money handing off shares to the dumb money. The smart money is trying to tip toe out the back door trimming and dumping positions as their lieutenants appear on television each day pumping the markets.

Price came within three points of tagging the upper standard deviation band at 2079. A move back to the middle band, the 20-week MA at 1985 would be on tap as well as the lower band at 1890 in play. The bulls have a lot of momentum on their side, however, markets typically hit a lull period early December due to tax loss selling so if the bears fight back now is the time. The stochastics are overbot and want price to fall. The inverted hammer candlestick last week shows that buyers pumped the price to new all-time highs but the sellers were able to push price back down to end the week; this behavior places a question mark as to how strong the trend actually is and a move lower for the new week ahead will verify the inverted hammer as a trend change candlestick.

Equities may jog at these levels at 2052-2076 for a couple weeks but the expectation would for price to roll back over again and the happy ending for the year may not materialize as the universal consensus expects. 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 12/1/14

SPX (S&P 500) support, resistance (S/R), moving averages and other important levels are provided for trading the week of 12/1/14. Levels shown in bold are strong resistance and support. Bold and underlined levels are very strong and important S/R. The SPX all-time intraday high is 2075.76 on 11/28/14 and the SPX all-time closing high is 2072.83 on 11/26/14.

For Monday with the SPX starting at 2068, the bulls need to touch the 2076 handle and bingo, the SPX will accelerate to 2080 plus in a heartbeat. The market bears need to push below the strong 2065 support and a downside acceleration will occur into the 2050’s. A move through 2066-2075 is sideways action to begin the week. The bears can start the week in their favor if they push the S&P futures down -3 and more overnight.

The parabolic move higher in stocks continues fueled by the global central banker collusion with the new all-time historic high printing on Friday. The central bankers are the market. Everything has gone the bull’s way since the mid-October bottom. In early December, tax loss selling typically occurs which sends stocks lower into a lull period and then there is a typically a recovery into year end. So if the bears have a tiny window to fight back it is now over the next week or two.

The bullish seasonality factors such as the third year of the presidential cycle (now into Fall 2015) and years ending in ‘5’ (2015) are encouraging the bulls to chase prices higher. In addition, a major percentage of the stock buybacks occur in the last two months of the year, November and December, so this further boosts stocks. Also, the huge moves higher in AAPL and MSFT, with traders willing to buy regardless of price, send the stock indexes higher especially the Nasdaq Indexes.

Keystone’s 80/20 rule says 8’s typically lead to 2’s, and if 2080 is taken out the 2120’s would be on the table. The stock market euphoria is at fevers pitch with the VIX remaining tame at 13.33. The bears need the VIX above the 200-day MA at 13.82 to create selling pressure in equities. The CPC and CPCE put/call ratios have printed lows over the last few days verifying complacency in markets. Traders and investors know the Fed and global central bankers will always pump the stock markets with easy money so there is no reason for any worry or concern. The elevated CBOE SKEW is flashing caution signs.

Price needs to back kiss the 20 and 50-day MA’s moving forward; especially the 20-day. The 20-day MA is 2043 and rising and the 50-day MA is 1986 and rising. December begins at 2068 so this level is key as the year draws to a close. The bulls remain in firm control supported by the never-ending central bank money-printing. As long as everyone maintains confidence in the central bankers the party continues indefinitely.

For the bears, a breach of the strong 2065-2067 support gauntlet is a big deal and would send price down to test the strong 2056-2057 level which is a gap fill; call it the 2052-2057 zone. Since price is on an elevated island for the last five days, price may come down to 2057-ish and immediately collapse to 2052 and lower, falling through the gap, to create an island reversal pattern.

2076 (11/28/14 All-Time Intraday High: 2075.76) (11/28/14 Intraday High for 2014: 2075.76)
2075.76 Previous Week’s High
2075.76 Friday HOD
2075
2074
2073 (11/26/14 All-Time Closing High: 2072.83) (11/26/14 Closing High for 2014: 2072.83)
2071 (11/21/14 Intraday High: 2071.46)
2070
2069
2068
2067.56 Friday Close – Monday Starts Here
2067.56 December Begins Here
2067
2065.06 Friday LOD
2065
2064.75 Previous Week’s Low
2064
2057
2056 (11/18/14 Intraday High: 2056.08)
2054
2053
2052
2051
2049
2046 (11/13/14 Intraday High: 2046.18)
2043.25 (20-day MA)
2042
2041
2040
2039
2038
2035
2034
2032
2031
2030
2025
2024
2023.04 (200 EMA on 60-Minute Chart a Keystone Market Turn Signal)
2023
2019 (9/19/14 Intraday High: 2019.26)
2018
2016
2014
2012
2011 (9/18/14 Closing High: 2011.36) (9/4/14 Intraday High: 2011.17)
2010
2009
2007 (9/5/14 Closing High: 2007.71)
2006
2005 (8/26/14 Intraday High: 2005.04)
2004
2003 (8/29/14 Closing High: 2003.37)
2002
2001
1999
1998
1997
1995
1993
1991 (7/24/14 Intraday Top: 1991.39)
1988 (7/24/14 Closing High: 1987.98)
1986 (7/3/14 Intraday Top: 1985.59)
1985.78 (50-day MA)
1985 (7/3/14 Closing High: 1985.44)
1984.64 (20-week MA)
1983
1982
1980.15 (100-day MA)
1980
1978
1976
1973
1970
1968 (6/24/14 Intraday Top: 1968.17)
1965
1964
1963 (6/20/14 Closing High: 1962.87)
1962
1961.32(150-day MA; the Slope is a Keystone Cyclical Signal)
1961
1960
1958
1956 (6/9/14 Intraday Top: 1955.55)
1951 (6/9/14 Closing High: 1951.27)
1949.15 (10-month MA; a major market warning signal)
1949
1947
1942
1940
1937
1936
1935.78 (200-day MA)
1931
1928
1926.87 (12-month MA; a Keystone Cyclical Signal) (the cliff)
1925
1924 (5/30/14 Intraday Top: 1924.03) (5/13/14 Closing High: 1923.57)
1920
1917
1916.91 (50-week MA)
1912
1910
1906
1902 (5/13/14 Intraday Top: 1902.17)
1901
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
1886
1885
1884 (3/21/14 Intraday Top: 1883.97) (3/7/14 Intraday Top: 1883.57)
1882
1880
1879
1878 (3/7/14 Closing High: 1878.04)
1877
1874
1873
1872
1871
1868
1867
1865
1862
1859
1855
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, November 29, 2014

Historic October-November 2014 Stock Market Rally Created by Global Central Banker Collusion


The historic and epic 31-day stock market rally is created by the collusion of global central bankers. Grab a cup of coffee or tea or other beverage of choice and read the following to understand how the central bankers collude to goose the stock market and save a potential crash scenario in mid-October. The central bankers threw the kitchen sink at the stock market to save the day. The remaining central banker fuel is the official announcement of a full-blown ECB QE (sovereign bond-buying) program and perhaps QE4, even QE5 and QE6, by the Fed as time moves along. The end game occurs when all confidence is lost in the modern-day central bank 'money changers'.

On Thursday, 10/16/14, S&P futures are down 30 points before the opening bell. At 10:25 AM EST, one hour into trading, the SPX is printing a LOD at 1835. The Federal Reserve realizes the stock market is in a potential crash mode and must intervene to prevent an all-out collapse. The FOMC sends St Louis Fed’s Jim Bullard to the media to stop the stock market selloff. Fed’s Bullard surprisingly says the Fed should consider delaying the end of QE. QE 4 may actually be the next path forward. Traders are happy at the prospect of more Fed easy money and the wealthy can start raping the upside in the stock market again. All hail the Fed! The central bankers are the market. Bullard’s comments create a firm stock market bottom. The market selloff immediately ends and a ‘V’ recovery rally begins that launches equities higher like a rocket. A parabolic move occurs into early November where the stock market recovers all the losses during the September-October selloff and prints new all-time highs in early November. Fed’s Lockhart cites negative data providing more dovish reasons for the Fed to offer easy money and keep rates lower longer and send stocks higher.

On Friday, 10/17/14, The PBOC announces plans to inject 200 billion yuan ($33 billion US) into the economy which creates a more optimistic tone. BOE chief economist Andy Haldane takes a page from Fed governor James Bullard’s playbook yesterday and says the central bank may consider more intervention to assure a continued recovery. The ECB plans to start purchasing asset-backed securities sooner than originally scheduled. The world’s central bankers are colluding to successfully create a bottom in stocks and stop the global cascading selloff. Fed’s Bullard began the party yesterday hinting at QE 4. China’s PBOC chimes in overnight planning more stimulus. The BOE echoes the same easy money talk and now the ECB plans to pump the stock market right away with its Keynesian policies. Make no mistake; the central bankers are the market. European indexes jump higher. The world’s central bankers (Fed, PBOC, BOE and ECB) are out in force promising to pump the stock market higher with easy money.

On Monday, 10/20/14, the dollar/yen moves higher to 107.22 so the weaker yen creates bull fuel. Banzai! The NIKK explodes +2.6% higher to 14917. Japan PM Abe may delay the decision on a second consumption tax and pension funds plan to buy more Japanese stocks creating a happy mood. US futures are in a joyous mood. China’s PBOC plans to inject $33 billion of liquidity into the banks which creates market positivity. The BOJ and PBOC news sends stocks higher.

On Tuesday, 10/21/14, European indexes move higher as rumors and reports of ECB stimulus circulate on trading floors. DAX +1.1%. MIB +1.5%. Global central banker collusion continues. The trading day begins with equities exploding higher. Bullish traders are fueled by the weaker yen overnight and the ECB providing more stimulus. Dip-buyers are rushing in to buy the long side and traders chase stocks at any price for fear of missing the recovery rally. The SPX blows up through the 200-day MA at 1906 and 10-month MA at 1908 like they are not there. The SPX prints above 1922 recovering 100 handles off the 1820 low only four days ago. Traders abandon puts and other downside protection fully convinced the markets are in strong rally mode again and perhaps on the way to SPX 2K again. The bullish enthusiasm turns euphoric. At lunch time, equities are printing at the highs. The SPX is in a straight non-stop march higher all morning now above 1930. The Dow is melting up with a huge 135-point gain. The computer screens are green. The stock market is in complete melt-up with major indexes and sectors moving +2% higher. The day ends with equities printing the best day of the year. The news that the ECB will begin purchasing corporate debt creates the strong rally in Europe and the US.
On Wednesday, 10/22/14, Asia generally follows the US stock rally that follows the European rally created by news that the ECB will begin buying corporate bonds (although the ECB will not confirm the news).

On Thursday, 10/23/14, long traders are in a party mood drinking the Fed booze and raping the market upside. Caligula would be proud. Short-sellers throw in the towel today creating a huge short-covering rally. The TICK prints the initial +1200 at the open and three more +1000 numbers today in sync with the intraday stock market tops verifying the bullish euphoria in play. The adage “don’t fight the Fed” is back in play and the central banker market manipulation is far too powerful to fight. The weaker yen (dollar/yen running above 108) sends equities strongly higher. Long players are tripping over each other buying stocks indiscriminately convinced that the train has left the station. Many money managers are playing the bullish third year presidential cycle where October (now) into the following November (2015) of the president’s third year is typically a multi-month bullish period. In addition, about 25% of all buybacks announced during any given year occur in the last couple months of the year to pump stocks higher. Also, years ending in ‘5’ are always up years (2015) further fueling a bull frenzy.

On Monday, 10/27/14, the PBOC says China’s growth is expected to slow to 7.2% (the central bank expected 7.5% at the beginning of the year). The comment hints that more PBOC stimulus will be provided to prop-up the economy and stock market. Bad news is good news since it means more easy money from the Fed, BOJ, ECB, BOE and PBOC to pump the stock markets higher.

On Tueday, 10/28/14, the dollar/yen moves above 108. Banzai! The BOJ is weakening the yen and sending stocks higher over the last couple hours (the weak yen creates a flood of buying into Japanese and US stocks). The central bankers are the market. Traders also anticipate additional stimulus from the ECB providing a lift to stocks. In the final minute, the Dow moves above 17000. Markets jump higher pricing in dovish comments from the Fed tomorrow. The session ends with the SPX up 23 points, +1.2%, to the important 1985 resistance level. Price takes out the 50-day MA at 1967. The Dow prints above the psychological 17K level gaining 187 points, +1.1%, to 17006.

On Wednesday, 10/29/14, Chinese data is weak but traders send stocks higher anticipating more easy money from the PBOC.

On Thursday, 10/30/14, China promises to support the important sectors such as housing, e-commerce, tourism and education with more stimulus. Railroad stocks explode higher. The SSEC gains +0.8%. European markets bounce and begin moving strongly higher as traders sniff out an ECB quantitative easing announcement likely coming over the next few weeks. Europe is moving into a bad news is good news mindset like the States for many years. It is great news for bulls that the banks are hurting this morning since this virtually guarantees that the ECB will provide more stimulus. Long traders dance with glee as they plan to continue raping the upside in European and US stocks with the central banker’s easy money.

On Friday, 10/31/14, a Halloween treat is provided with a double whammy of Japan shock and awe. The Nikkei Index is sent higher in early trading following the US rally and on news that the Japanese Government Pension Investment Fund (GPIF) plans to increase the weighting in domestic and foreign stock positions by 25% across the board. The dollar/yen jumps to 109.40 and the weaker yen catapults the NIKK up +1.4%. Traders ignore the tame inflation and weak household spending data for Japan since the BOJ and government policies are focused on pumping the stock market higher. The equity markets are clearly manipulated by the central bankers and propped up by money printing. After an afternoon policy meeting, BOJ Governor Kuroda shocks the markets by announcing more stimulus. Japan fires a double whammy money bazooka promising to buy 25% more stocks in the government pension fund as well as providing more easy money. Banzai!! The dollar/yen explodes higher to 111.57 (7-year low in yen). The NIKK rocket launches over +5% and settles up +4.8% to 16414 to a 7-year high. US futures catapult higher. S&P +21. Dow +180. Nasdaq +59. The central bankers are the market and continue to pump the stock market with money printing for the last six years. The SIP data feed outage yesterday coincided with a purchase of 15000 E-mini S&P’s so obviously the  insider’s are told ahead of time so they can make easy stock market gains in a few hours time. Is Wall Street rigged? Of course it is. The Japan decision is Abenomics on steroids and smacks of desperation since the inflation target of 2% remains difficult to attain. Japan is cheapening their currency through money printing. Global currency wars continue as nations compete in a race to debase; a race to the bottom. China indexes jump higher. SSEC +1.3%. HSI +1.3%. Aussie markets run higher on the news. SPASX200 +0.9%. Banzai!! European indexes launch on the Japan double-whammy news. CAC +2%. IBEX +1.8%. DAX +1.6%. FTSE +1.2%. The trading session begins with equities launching higher continuing a global short-covering rally. The major indexes explode over +1% higher. The market bears are running for their lives. Semiconductors leap higher with SOX up +3.5%. The day ends with the equity markets gapping higher on the Japan stimulus announcements. Halloween is a trick for the bears and treat for the bulls. The SPX gains 23 points, +1.2%; a new all-time closing high at 2018.05 The twelve-day rally is a phenomenal parabolic move higher that began with Fed’s Bullard comments that more QE is on the way. In about two weeks time, the SPX moves from 1820 to 2018, a huge 200 handle turnaround, nearly +11%. The power of the central bankers is impressive although obscene. Free markets died in late 2008 and early 2009 when the Fed bailed out the banks and other companies such as AIG and GM and began the quantitative easing. The Dow moves from 15860 to 17396, 1536 points, nearly +10% over the last few days. The COMPQ is up from 4123 to 4642, a ridiculous 519 points, nearly +13%! The RUT rallies from 1040 to 1174, 134 points, +13%! Major indexes simply do not move over +10% in a matter of days unless goosed by the central bankers. When traders were expecting the ECB to pump the markets higher with stimulus, instead the Japanese government pension fund and the BOJ fire a double-whammy money bazooka creating a shock and awe wave of easy money. Traders expect a further upside orgy with ECB President Draghi announcing stimulus next Thursday at the ECB meeting or in the weeks ahead. The central bankers are the market; can it be any more obvious? Bullish traders are celebrating into the weekend raping the market upside with the central banker’s easy money.

On Tuesday, 11/4/14, the SSEC is at 2431 at highs not seen since early 2013 and about to break higher up to numbers comparable to early 2012. The PBOC’s liquidity injections into the banks over the last few months and the Japan QE shock and awe last week create the gains. ECB President Draghi will be forced to fire the QE money bazooka since the central banks are the only mechanism available to pump stock market prices higher.

On Wednesday, 11/5/14, the recent PBOC stimulus pumps the infrastructure and power and energy stocks higher. US stocks are boosted after the elections that give the republicans control of Congress. Fed’s Kocherlakota, an uber dove and the lone dissenting vote at the last meeting wanting to see more quantitative easing, flaps his Keynesian wings and says the first rate hike should be pushed out of 2015 into 2016. Trades buy stocks and raise wine glasses toasting Kocherlakota’s praise for zero interest rates forever (ZIRP Forever).

On Thursday, 11/6/14, Draghi says growth is slowing which leads to a lowering of GDP targets moving forward and the need for more stimulus. Draghi says there is unanimous commitment from all ECB members to use unconventional measures to support the economy (although many members are opposed to implementing full-blown QE). He says there are increasing differences in the member nation economies hinting that further monetary easing measures are coming to help the weaker countries. Draghi says the ABS program will continue for two years. Draghi says media reports are overblown about dissention in the ranks and he says the ECB membership remains united although willing to discuss differences. Draghi says, “It is fairly normal to disagree about things.” The dovish ECB words create a frenzy of stock buying. European indexes rocket launch higher. DAX +0.8%. CAC +0.6%. US futures run higher fueled by the non-stop central banker joy. S&P +7. Dow +84. Nasdaq +18. Stocks run higher as Draghi speaks. US Treasury yields move higher with the 2-year at 0.53%, 5-year 1.65%, 10-year 2.37% and 30-year 3.09%. The 10-year yield gains four basis points in a heartbeat. Copper is at the flat line. The central bankers are the market.

On Friday, 11/7/14, The dollar/yen is above 115. Banzai! The NIKK is up +0.7% in the early going above 16.9K. SNE bounces +3%. Other exporters such as Panasonic are also boosted by the weaker yen creating a positive mood. The three-week rally is a phenomenal parabolic move higher that began with Fed’s Bullard comments that more QE is on the way. Other Fed members promise more dovish action, the BOE hints at more stimulus, the PBOC injects billions into China’s economy, the BOJ announces QE shock and awe on Halloween and the ECB promises a QE program in the weeks ahead. Obviously, the central bankers are the market and created the parabolic move higher in stocks off the bottom last month. Typically, stocks take the stairs up (long rallies) and the elevator down (sharp drops) but the vertical rally shows that the bulls have taken control over the elevator as well. In only three weeks time, the SPX moves from 1820 to a new all-time record high at 2034, a huge 214 handle turnaround, nearly +12%! The power of the central bankers is impressive although extremely obscene. Free markets died in late 2008 and early 2009 when the Fed bailed out the banks and other companies such as AIG and GM and began the quantitative easing programs. The Dow moves from 15860 to 17575, 1715 points, nearly +11% over the last few days! The COMPQ is up nearly +13%! The RUT rallies +13%! Major indexes simply do not move over +10% in a matter of days unless goosed by the central bankers. It is all as plain as the nose on your face. Smart traders are raping the upside for all its worth courtesy of the Fed and other central bankers until it all falls apart.

On Sunday, 11/9/14, China President Xi talks up the economy and highlights ongoing and future investment programs. China announces a $40 billion stimulus plan for infrastructure more closely linking China to its Asian trading partners. World governments continue to pump markets higher with easy money.

On Tuesday, 11/11/14, more shock and awe from Japan. The dollar/yen is 115.50 and climbing higher to 116. Banzai! The weaker yen yesterday created the up move in US stocks and new all-time highs. Japan PM Abe says the sales tax hike may be delayed and a snap election may be called for the government. The delay of the sales tax bludgeons the yen lower, dollar/yen pair higher and sends the Nikkei Index rocketing higher. The BOJ is in the stock market purchasing ETF’s. The NIKK jumps +2.1% closing at 17124 a seven-year high at 17K. Japan continues to goose its markets with easy money and promises of rainbows and sunny skies forever; the party, however, will likely end in financial collapse in the coming months.

On Wednesday, 11/12/14, the NIKK is up +1% above 17.2K out of the gate printing a new seven-year high fueled by the weaker yen. Dollar/yen 115.80. News reports say Japan PM Abe is delaying the sales tax hike and will call for a snap election within the next month. Abe has not yet confirmed the reports. The tax hike delay news, however, continues to send the Nikkei higher.

On Thursday, 11/13/14, Fed’s Dudley says it is too early to raise rates. Dudley wants to see higher inflation before the first rate hike. European stocks and US futures bump higher on the dovish talk. The ECB survey of economists reports a drop in forecasts. The weak economic commentary encourages traders that the ECB will act with more stimulus. Bad news is good news since the central bankers are the market. European stocks and US futures remain buoyant.

On Monday, 11/17/14, the potential delay of the Japanese sales tax hike created strength in Japanese and US stocks during the back half of last week. Traders expect the GDP number to be very weak thus delaying the sale tax hike. The worst than expected number will pave the way for Abe to announce snap elections and delay the sales tax hike for six months or one year. The dollar/yen jumps to 116.92 and then prints above 117 at 117.04 a new seven-year high. Fed’s Powell says low rates are not creating asset bubbles in markets. Maybe he should remove those rose-colored glasses? A dividend stock bubble as well as general multi-year stock market top may actually be at hand. Since its inception in 1913, over 100 years ago, the members at the Federal Reserve have never been able to predict an asset bubble ahead of time. At 10:25 AM EST, ECB President Draghi says the members are unanimous in using unconventional measures to boost the European economy. Draghi says, “Buying government bonds (sovereign debt) is an option.” Stocks rocket higher since the buying of European government debt was uncertain but Draghi now says it is firmly on the table. The central bankers are the market. European indexes catapult higher on the news erasing all of today’s losses. The SPX pops above 2042. European indexes finish the session at the highs after the Draghi pump. DAX and CAC are each up +0.6%. FTSE +0.3%. The IBEX is up +1.6% turning around a huge 2.6 percentage-points intraday. The central banks are powerful and as long as traders believe in the magical abilities of the Fed, BOJ, ECB, BOE and PBOC to print money, markets float higher. Shamefully, the sick banks rally strongly. Italian banks are up from +3% to +4% across the board since the ECB will likely buy their garbage paper.

On Tuesday, 11/18/14, Europe indexes begin the session trading higher up from +0.3% to +0.6% across the board buoyed by ECB President Draghi’s comments yesterday about potentially purchasing sovereign bonds. It is amazing that the central banks and governments are in complete control of the global stock markets and yet market participants are sanguine about this ongoing intervention and manipulation. And why wouldn’t they be? The obscene central banker money printing has made the wealthy filthy rich over the last few years so for those that own stocks (the upper middle class and the elite) every day is a joyous party. In this new modern day bazaar world, bad economic data is cheered since it will cause the central bankers to provide more stimulus to pump stock prices higher. Investors believe the central banks will continue to print money indefinitely. The party continues as long as everyone has confidence in the central bankers; it will all come to a crashing end when confidence is lost. There is no allegiance to staying bullish long term. Traders and investors are simply raping the market upside courtesy of the Fed and other central bankers. Once the markets roll over, traders will toss stocks in the trash can like throwing out an old worn-out rag. Japan PM Abe confirms that the sales tax hike will be delayed. The stock market explodes higher day after day fueled by central banker easy money while fundamental economics are ignored. Corporate executives, bankers, politicians and other elite are creating huge sums of wealth for themselves with the blessing of the Fed and at the expense of the common citizens. The middle class has disappeared in America with an upper middle class (that own stocks) joining the elite upper class while everyone else (that do not own stocks) is lower middle class and poor mired in debt without job opportunities. The Fed and other central banker easy money allows the elite to use financial engineering to pump stocks higher rather than buy capital equipment or hire additional workers to help put people back to work. The bankers and other elite then pay back the Fed members for their collusion by paying former officials such as former Chairman Bernanke huge $250K speaking fees for a token luncheon. Fed Chair Yellen is salivating knowing that in a couple years she will receive these obscene monetary kickbacks for her service to the wealthy and live a life of luxury. The country appears broken. The elite are raping the stock market upside each day; other power brokers are taking advantage of any loophole possible that allows for easy profits and monetary gains with little effort regardless of whether it hurts America. In respect to the disadvantaged and poor in the US, the response by the elite is the same as Marie Antoinette’s famous quote when she learned that the peasants had no bread, “Let them eat cake.” Compassion for the less fortunate is lost in America and in the world. The country has descended into a narcissistic Caligula-style party each day with many Americans only concerned about short-term materialism and daily self pleasure. There is a total disregard for the future of the country even though the power brokers profess faux concern. If there was ever a time for a serious reset for the US the time is at hand so prepare yourself for any coming storm. Reduce all debt and save and set aside a large cash reserve. Make preparations and separate yourself from the ongoing debauchery; do not look back at the city of Sodom.

On Friday, 11/21/14, ECB President Draghi pumps the global stock markets overnight saying he is ready to act to tackle low inflation. Draghi talks dovishly promising more stimulus. Traders thought that Draghi would not announce new stimulus measures and potentially sovereign bond buying until early 2015 but now over one-half of traders believe he may announce action at the December meeting only days away on 12/4/14. Interestingly, behind the scenes, the Fed and BOJ are becoming increasingly concerned over the drastic drop in the yen. Draghi says, “We will do what we must to raise inflation expectations as soon as possible.” Global markets rocket higher. The euro plummets from 1.2555 to 1.2435 on the dovish promises. European indexes catapult higher at the opening bell. DAX +1.7%. MIB +1.7%. CAC +1.2%. FTSE +0.4%. German bund (10-year yield) is 0.79% remaining subdued so traders are buying both stocks and bonds with the ECB’s easy money. At 5:30 AM, the PBOC announces shock and awe cutting interest rates for the first time since 2012. The one-year benchmark lending rate drops from 6.00% to 5.60%. The one-year benchmark deposit rate drops 25 bips. The PBOC slightly lifts the ceiling for deposit rates. Global markets catapult higher doubling the gains from Draghi’s dovish talk. Obviously, the central bankers are the market. The global race to debase continues. US futures go vertical. S&P +13. Dow +114. Nasdaq +25. The US indexes were set up to roll over on the daily charts so the collusion by the central bankers saves the day. Dollar/yen 117.79. Euro 1.2448. The Aussie dollar leaps above 0.8700. ECB President Draghi continues pumping markets announcing the start of purchases of asset-backed securities today. This action is dubbed QE Light. Full-blown quantitative easing would be in play if Draghi announces sovereign government bond buying which appears likely going forward after his speech this morning. The Dow is at new all-time highs above 17.8K for the first time in history. Ditto the SPX above 2060 and running above 2070. The COMPQ moves above 4750. European indexes close with a sea of green; every nation across the pond prints higher stock markets. Italy is up an obscene +3.9%. Since central bankers plan on pumping stocks traders are buying the most beaten down garbage to ride easy gains higher. Spain’s IBEX is up a huge +3.1% above 10.5K. CAC +2.7%. The DAX is up +2.6% to 9733. The FTSE came on strong late in the session gaining +1.1%. The ECB and PBOC create a shock and awe market melt-up. Draghi is now all-in committed to providing full-blown QE in the future and the question remains how he can purchase government bonds with all the different member countries in play and especially Germany remaining very cold to the idea. Draghi promises a brand new government bond purchasing full-blown QE pony so he had better deliver that pony perhaps before Christmas. European indexes are generally up about +3% this week. Europe moves into the weekend joyously celebrating the central banker’s power and influence on global markets. The week ends with the fifth straight up week for the SPX gaining +1.2% this week. The SPX is up +13% off the 1820 bottom in mid-October. The historic rally is parabolic up 240 SPX handles in only 27 days.

On Monday, 11/24/14, Asian indexes are a sea of green. The new trading week, and holiday-shortened week in the States, begins in a festive party mood. The PBOC lowering rates on Friday creates a wild upside orgy in Asian stocks. China is already talking about further cuts increasing the feeding frenzy. Chinese banks, brokerages and especially property stocks catapult higher. All 65 of the 65 major real estate stocks are substantially higher from +3% to +15%. The lower rates will pump the Chinese real estate bubble larger. All 11 major financial stocks are higher. The Shanghai Index hits a three-year record high with the SSEC gaining +1.9% to 2534. The SSEC begins printing new three-year highs day after day. The HSI is up +2%. The central banker-fueled five-week stock market rally is historic. The SPX is up from the 1820 low in mid-October to 2070, a huge +14%!

On Tuesday, 11/25/14, the SSEC is up +1.4% to a new record three-year high. At 8:30 AM, the first revision to Q3 GDP is +3.9% only one tick from a four handle beating the expectations at +3.3% to +3.5%. Consumer spending increases. Apple is all the rage these days as the market capitalization approaches $700 billion. Traders are buying at any price with the stock gapping up each day. AAPL is sending the Nasdaq Indexes to new record 14-1/2 year highs each day. Television personality James Cramer advises television viewers to buy and hold AAPL at these levels above 119. Cramer says “Apple is trading at a discount to the S&P 500” and is an attractive valuation despite the high price. AAPL has run from 95 to 120, +26%, in only 30 days. Cramer cites technician Mark Sebastian that predicts the SPX will move above 2100 and the VIX will drop to 10. The parade of market bullishness continues across the television and computer screens. The wealthy dance with glee lighting cigars and back-slapping each other while poking fun at the stupid middle class and poor that do not own stocks. The SPX, TRAN and AAPL print new all-time highs. Apple is over $700 billion in market cap (at 119.36) which is more than XOM and JNJ combined. The Nasdaq prints a new 14-1/2 year record high. TRAN gains +0.6% with gains in trucks, trains and planes.

On Wednesday, 11/26/14, SSEC is up +1.5% to another three-year record high at 2605. HSI +1.1%. SPASX200 +1.2%. ECB Vice President Vito Constancio says the central bank can decide on buying bonds as soon as Q1, music to bullish ears. The orgy of easy money will continue pumping the stock market higher forever.

On Thursday, 11/27/14, Thanksgiving, the SSEC prints another record three-year high up +1% to 2630. Samsung catapults +7% higher on the buyback news. Buybacks have fueled obscene gains in US stocks over the last couple years. The buybacks are funded by a company’s cash reserves as well as the Fed and other central banker’s easy money policies. The central banker intervention does not improve the economy but instead makes the wealthy that own stocks wealthier due to buybacks and other financial engineering encouraged by the wash of easy money liquidity. Traders expect Draghi to announce a full-blown QE program to buy sovereign bonds (in addition to the ongoing corporate bond purchases dubbed QE Light) as early as the next ECB meeting on Thursday, 12/4/14.

On Friday, 11/28/14, The SSEC continues a seven-day winning streak up +2% printing another record three-year high. China stocks are an outperformer in November with the SSEC up +11%. Traders are sniffing out more ECB stimulus including full-blown QE with the purchase of government bonds and are ready to rape the upside in European stocks just as US stocks were ridden higher over the last few years. No one cares about weak economies and data. The only thing that matters is central banker’s printing money that sends stocks higher. If you are upper middle class and wealthy the gains in stocks are fantastic. If you are lower middle class and poor and do not own stocks you continue to fall behind in life financially since the central banker easy money does nothing to boost your dilemma. Companies use the easy money for financial engineering offering dividends and buybacks to pump stock prices higher instead of buying capital equipment or hiring workers. The SPX prints a new all-time high at 2075.76. Trannies print a new all-time high as stocks dependent on gasoline and diesel fuel surge higher. TRAN prints above 9310 up +1.2%. The COMPQ prints a new 14-1/2 year record high at 4811. The NDX, Nasdaq 100, prints another high and is up from 3700 to nearly 4350, +18%, in only 31 days. 45% of the huge move in the NDX is created by Apple. MSFT also pumps Nasdaq Indexes higher. For the week, the SPX is up a marginal +0.2% up for six consecutive weeks. The Dow ekes out a small +0.1% gain this week continuing a six-week up streak. The Nasdaq is up +1.7%. TRAN is up +1.1%. For the month of November, the SPX and Dow are each up +2.5%. The Nasdaq gains +3.5%. TRAN gains +5.1%. AAPL is up nearly +11% during the month creating big gains and optimism in US stocks.

On Saturday, 11/29/14, as the dust settles after the historic 31-day rally, the SPX catapults from 1820 to a new all-time high at 2076, a colossal 256 points, +14%. The Dow rallies from 15855 to new all-time record highs at 17903, an enormous 2048 points, +13%! Obviously, markets do not function like this normally. The rally is the most robust ever in history and created by the collusion of the global central bankers. How long will traders and investors maintain their confidence in the modern-day central bank 'money changers'?

COMPQ Nasdaq Composite Monthly Chart Overbot Rising Wedge Negative Divergence Price Extended

The central banker's stick-save the markets in mid-October. Price now ekes out higher highs but on far lower volume. The blue circles show distribution taking place with the smart money handing off shares to the dumb money. The Nasdaq violated the upper standard deviation band one year ago and has yet to return to the middle band, the 20-month MA at 4079 and rising, at a minimum, as well as the lower band at 3241 and rising.

Price is extended above the 20-month MA above the 50 above the 100 above the 200 requiring a mean reversion. The central bankers are powerful and the global collusion previously explained from the October low to present creates the thrust higher to new highs. AAPL creates the huge pump higher in Nasdaq Indexes. Trades are tripping over each other to buy Apple stock hyped each day in media. The Nasdaq 100, NDX, catapults vertically higher and about 45% of that move is solely due to Apple stock. It is not healthy for a market to be moving up on a limited number of stocks. AAPL and MSFT have driven much of the upside in tech stocks.


The projection is that a multi-year top is very near. The SPX and Dow are topping at now and likely will place their top anytime between now and February but the Nasdaq has more juice due to the huge momentum in Mr Softy and Apple. The momo has created a higher high for the MACD line which will want to see one more high after a pullback on the monthly basis. Thus, a jog move is likely for the Nazzy, a drop in December-January, then a move back up in December-February to create the multi-year top.

The collapses from rising wedges can be quite dramatic; very quick and painful if you choose to stay blindly long. The September-October pullback is child's play compared to the quick and substantial damage a collapse from a rising wedge can create. If you enjoyed the long rally higher and have substantial gains, it would be prudent to simply cash-out and take a few weeks or months off. If you are a nimble trader, you can cash-out now, look for the pull-back and then play a recovery move back up, and then short the next top which should serve as THE top for the tech-heavy Nasdaq. Watch for the negative MACD cross to form into the new year which will confirm the extended downside ahead that can last a few months or year 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.

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

The central banker's stick-save the markets in mid-October. Price now ekes out higher highs but on far lower volume. The blue circles show distribution taking place with the smart money handing off shares to the dumb money. The Dow high of the month is only 25 points from the upper standard deviation band which will require another retracement to the middle band, the 20-month MA at 16152 and rising, at a minimum, as well as the lower band at 14382 and rising.

Price is extended above the 20-month MA above the 50 above the 100 above the 200 requiring a mean reversion. The negative MACD cross had locked-in a firm multi-year top but the central bankers are too powerful and the global collusion previously explained from the October low to present creates the thrust higher to new highs. The projection is that a multi-year top is at hand now, or a jog move may occur to satisfy the near-term strength in the RSI and MACD line where the Dow drops in December-January, then comes back up for the top in January-February for the multi-year top.


The collapses from rising wedges can be quite dramatic; very quick and painful if you choose to stay blindly long. The September-October pullback is child's play compared to the quick and substantial damage a collapse from a rising wedge can create. If you enjoyed the long rally higher and have substantial gains, it would be prudent to simply cash-out and take a few weeks or months off. Short-sellers can continue to bring on positions against the broad markets. Watch for the negative MACD cross to confirm the extended downside ahead that can last a few months or year 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.

SPX S&P 500 Monthly Chart Overbot Rising Wedge Negative Divergence Price Extended

The monthly charts receive new prints on Friday for the last trading day of the month; EOM (end of month). Wednesday, December 31st will mark the EOM, EOQ4 (end of fourth quarter), EOH2 (end of the second half of the year) and EOY (end of year). The bulls float the stock market higher courtesy of rich Uncle Fed and other global central bankers (CB's). The obscene run-up in 2013 is purely due to the BOJ money printing destroying the yen as well as the ongoing Fed QE (quantitative easing) Infinity and ZIRP Forever (zero interest rate policy). This central banker-fueled orgy continues in 2014.

The pink circle shows the market pull back which was stopped by the Fed that knew a serious negative market event was at the door step. Stocks were sliding down the rabbit hole so St Louis Fed's Jim Bullard was sent out to announce that QE will always remain on the table despite the program ending in the near term. A 'V' bottom was created by the Fed and stocks never looked back. Further gooses occurred by more dovish Fed (US) commentary, the BOE (UK) promising more stimulus, the PBOC (China) injecting liquidity, the BOJ (Japan) shock and awe on Halloween bludgeoning the yen, the ECB (Europe) promising government (sovereign) bond purchases and the BOJ canceling the proposed sales tax hike from October 2015 into April 2017. Banzai! The global central bankers have colluded to throw everything possible at the markets, including the kitchen sink, so the ammunition remaining to prevent the next market collapse is very thin.

There is one more ace in the hole for the CB's where the ECB may announce the sovereign bond-buying program as early as this Thursday, 12/4/14, at the regular monthly meeting which will likely goose markets higher again, perhaps back up to the upper standard deviation band at 2115 and rising. Keystone's 80/20 rule says 8's typically lead to 2's so a breach and close above SPX 2080 would open the door to 2120's. The market bears need to hold the line at 2080 and lower.

The chart is very ominous but against the back drop of central banker intervention. The Fed could reinstate QE again, a QE4 and more, to further goose the stock market, however, the central banker intervention only works if investors and traders have confidence in the Fed and other CB's. Once confidence is lost (and you wonder why it has not been lost already after six years of easy money pumping the stock market but the middle class and poor continue to suffer through structural unemployment) the end game is at hand. CB intervention and quantitative easing only works when one or perhaps two world central bankers are performing the shameful deed.

Over the last few years, what started with the Fed to save the stock market in 2009, has now rippled around the globe with all CB's getting into the act printing money. The intervention has now reached the point where the global CB's have colluded to create the last market stick-save in October. The end game is likely very near since there is no where else to turn to extend the game (except for the ECB sovereign bond purchases). In addition, nations are starting to slit each other's throats with everyone performing central banker intervention in a race to debase; a race to the bottom. The Fed is still in the game as well with the ongoing ZIRP Forever policy (zero rates forever to pump stocks higher).

Against that macro back drop, the chart speaks for itself. The collapses from rising wedges can be quite dramatic and you got a small taste with the September-October selloff. That was child's play compared to the carnage and damage a collapse from a rising wedge can perform. The pull back in September was forecasted by the negative divergence and it was very likely that a multi-year top was placed. The bears were in clover from the September top down to mid-October when the CB's colluded to create all the shock and awe described in the second paragraph. The SPX has needed to return to the middle band, the 20-month MA at 1826 and rising, for the last two years; it is astonishing that price is not permitted to retrace due to the CB intervention. Price is extended above the 10-month MA, 12-month, 20, 50, 100 and 200-week MA's, the ribbon is fully extended, so a mean reversion is desperately needed and a drop to the 1850 and lower would be a realistic expectation at a minimum. As the months proceed, a trip to the lower band now at 1537 and rising is definitely on the table (as the months play out the lower band will likely venture up into the 1600-1700 area serving as a downside target.

Back to the near-term, the power of the central banker actions creates momentum. Note that the MACD line ekes out a tiny higher high which leaves the door open for a jog move in price say down for December and/or January, then back up for January and/or February, where the top would be in. Ditto with the RSI trying to squeeze out a higher high. The other indicators are firmly in neggie d and overbot wanting price to give up the fight now and to retrace for months and perhaps a year or two ahead.

The dip-buyers were tripping over each other to buy stocks in late October once the central bankers sounded the all-clear signal creating robust volume. Also keep in mind that much of that volume was sell-side earlier in the month. For November, higher highs occur in price but the highs occur at only two-thirds of the volume from October. The three blue circles clearly show distribution periods over the last year where the smart money takes advantage of the hype and market euphoria, like now, where pundits parade across television and computer screens telling Joe Sixpack and Aunt Nellie to "buy, buy, buy!" The retail investor is caught up in the hype and rushes in to buy the top of the market with the smart money eager to hand off shares to the incoming bag holders. Every market top needs sucka's. The 'pump and dump' scheme is as old as trading itself and Joe and Nellie will serve as cannon fodder.

What does all this wind-bag rhetoric conclude? The projection is that a major multi-year stock market top is at hand either in place or will top out over the next three months. Two potential paths are in play one where stocks simply top out now in December and move lower for the following months and more, or, stocks top out now and pull back, only to return to the highs one more time in early 2015 (due to the rising MACD) where the multi-year top will occur. A lot depends on the ECB sovereign bond-buying program since the central banker's are the market. The stock market is likely at the juncture where playing more upside is like picking up nickels in front of a bulldozer. If you enjoyed strong stock gains, it would be prudent to cash-out and sit on the sidelines a few weeks or months and see what happens. Ditch all your longs and spend some time enjoying life instead. Short sellers can feel comfortable increasing short positions as time moves forward.

The monthly chart is also completely negatively diverged as compared to the 2007 market top adding more negative energy for the path ahead. ECB President Draghi is the wild card. Perhaps if he back pedals or experiences difficulty in being able to announce the sovereign bond-buying program the multi-year top is likely in now. If he announces shock and awe on Thursday or at the next meeting on 1/8/14 with a government bond-buying program, then another spurt will create the multi-year top probably in January-February. Market bears have to exercise patience but their promised land as shown by the chart above is coming in the weeks ahead. Pay attention to the 10-month MA at 1949 and rising, and the 12-month MA at 1927 and rising (this is a Keystone signal called the 'cliff') since these two support levels confirm that the end is at hand. 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, November 26, 2014

SPX 30-Minute Chart 8/34 MA Cross

The 8 MA remains above the 34 MA signaling bullish markets for the hours ahead, however, the SPX is under the 8 MA which will curl it lower for a potential negative 8/34 cross. An ascending triangle pattern is in play but it is occurring with negative divergence (red lines). Typically you want to see the ascending triangle in concert with long and strong indicators like the green lines to produce an upside breakout. The green lines show long and strong indicators. The other day the thought was price would come back up to the highs which it did. Bears cannot claim any trend change until the negative 8/34 cross occurs and the lower trend line of the triangle fails.

Stocks are typically bullish in front of the holiday and through the Thanksgiving holiday but the month is up from start to finish and when this occurs the last couple days tend to finish weak. So flip a coin. The MACD cross is bearish. The RSI will need to drop under 50% to point to lower prices. Bears need the negative 8/34 cross or they got nothing. Bulls need to push above 2171 which will target 2089. The 8 MA is 2069.51 so if price moves above this number the bulls are happy and the bears are in trouble. 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 10:25 AM: The SPX is 2069.49 and the 8 MA above is 2069.49. The pivot from here is important.

Note Added 10:31 AM: The VIX is dropping like a stone to 12.03 now 12.01 which will send equities higher. SPX is 2069.35 remaining elevated.

Note Added 11:10 AM:  The 34 MA is 2068. The SPX and the 8 MA are both at 2069. The Three Stooges are squezed together. It's decision time into and through lunch time. Bounce or die. Bears need the negative 8/34 cross. Bulls need to jam price higher above 2069 and 2072 to continue the party higher. The direction should be apparent by lunch time. The RSI is 54% staying in bull territory above the 50%. What say you bulls and bears; who will carry the mantle of victory into Turkey Day?

Note Added 11:17 AM: 8 MA=2068.92. SPX=2068.69. 34 MA=2067.66. The SPX must make a decision.

Note Added 11:34 AM: 8 MA=2068.65. SPX=2068.25. 34 MA=2067.93. The SPX must make a decision. The bulls must jam things higher now to save the day. There is only 72 pennies separating these characters. It is decision time.

Note Added 12:34 PM: The 8/34 MA cross remains bullish. The VIX drops to an 11-handle which fuels the market upside. SPX is 2070 curling the 8 MA higher preventing an 8/34 negative cross frustrating the market bears. TRIN is 1.42 favoring bears today.

VIX Volatility Daily Chart

Two numbers bear watching for the VIX; the 13.83 and 14.15 levels. The VIX 200-day MA is a valuable signal line that dictates bullish versus bearish markets over the short term. The VIX is 12.25 at two-month lows well under the 200-day MA at 13.83 so the bulls are cruising. Market bears got nothing unless the VIX moves above 13.83.

Keybot the Quant algorithm remains long the market and the model is tracking VIX 14.15 as a major market directional force currently. So bears actually need to move VIX above 14 and above 14.15 to kick any market selling into high gear. If the VIX remains under 13.83, the bulls are gliding into Thanksgiving without a care in the world. 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 10:32 AM: The trading day is well underway. The VIX is dropping like a stone to 12.03 now 12.01 which will send equities higher. SPX is 2069.35 remaining elevated.

Note Added 12:37 PM: The VIX drops to 11.97 now printing an 11-handle which is a punch in the face to bears.

Tuesday, November 25, 2014

SSEC Shanghai Index Weekly Chart 3-Year Record Highs

The Shanghai is printing at three-year highs entering the strong resistance zone from 2011 and 2010. Price breaks out of the downward-sloping channel this summer. The blue sideways triangle patterns are about 500 points on the vertical sides. Thus, with the break out occurring from the 2050-2150 area, adding five hundo yields a target at 2550-2650. Price at the lower part of this target range now. The RSI and MACD line are long and strong wanting to see higher highs in price. The stochastics are overbot and negatively diverged and the histogram is neggie d so price should pull back to take a breather for a week or three but the expectation is then for a continued push higher into the 2550-2650 area. Price may not peak out for a few weeks forward definitely not until the RSI and MACD line goes neggie d.

The pink boxes show the ADX above the mid-20's indicating strong trends. The tumble lower through late 2011, 2012 and into 2013 was a strong down trend. Then in late 2013 the down trend petered out (ADX drops to 10-ish). From this summer, as the SSEC breaks out to the upside, the ADX jumps higher indicating that the current uptrend is strong. Marrying a strong up trend and the long and strong RSI and MACD, higher highs in price are anticipated. Overall, for the weeks and months ahead, the expectation is that the 2550-2650 resistance area should hold. As soon as the RSI and MACD develop neggie d, probably in December-January, that will identify the top. 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 8:27 AM: The SSEC closed at 2567 for Tuesday. The chart is always a few hours behind. Price begins the battle in the 2550-2650 resistance zone.

Note Added 10:37 AM on Wednesday, 11/26/14: The SSEC closes at 2605 gaining another +1.5%. The battle continues at 2550-2650.

Monday, November 24, 2014

TYX 30-Year Treasury Bond Yield Sideways Channels

The 30-year yield is moving sideways through a tight range like the 10-year yield and traders are awaiting the move out of the sideways channels to point the direction ahead. The TNX (10-year) wrestles through the 2.30%-2.38% and the lower 2.30% support is currently being tested. For the TYX chart above, the purple sideways range at 3.03%-3.09% has been in play for the 21 days. On Friday, the purple range failed and yield remains under the lower rail now at 3.01%. The purple range encompasses all the closing yields.

Broadening out with the black channel that encompasses nearly all intraday high and low yields a range through 3.01%-3.10% emerges and this is in play for the last 23 consecutive days. The 30-year yield is testing the lower 3.01% boundary right now. The 3.00% level is a psychological level. Thus, a failure here at 3.00%-3.01% will lead to a new lower range perhaps with initial support at 2.94%. Lower yields also indicate a further slippage into disinflation and deflation that the overwhelming consensus of traders say cannot occur moving forward.

A 30-year yield under 3%, with a flattening yield curve overall, indicates the ride to deflation town may not be as far away as everyone thinks. Of course the Fed and other central banker's have been printing money like madmen to prevent deflation thus, if the day of reckoning does arrive in the end, and deflation finally extracts its pound of flesh, it will prove that the Fed's grand Keynesian experiment, the brainchild of former Fed Chairman Bernanke and current Fed Chair Yellen, is a failure. 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 7:10 AM on Tuesday, 11/25/14: The 30-year yield sits at 3.00% making a bounce or die decision today.