Tuesday, September 29, 2015

SPX S&P 500 Weekly Chart Lower Band Violation

The SPX weekly is a critical chart to assess with all the wild market shenanigans ongoing. Price has violated the lower standard deviation band (pink) so the middle band, the 20-week MA, at 2044 and falling is in play. If price would bounce from here and take 2 to 4 weeks to get its act together, the middle band (20 MA) could easily drop from the current 2044 level down into the 1950-2000 range where the ascending price would try and tag. The negative 20/50-week MA cross was highlighted in a previous post; scroll backwards to check that out.

The green falling wedge is a bullish pattern. With the lower low in price, the histogram, stochastics and money flow are positively diverged wanting to see a bounce in price in this weekly basis. The RSI and MACD line, however, want to see further lows in price after any bounce would occur that lasts say for a week or three. The RSI is not oversold so there would be plenty more downside available; ditto the stochastics not yet oversold.

Stocks may fall back into a choppy sideways pattern only instead of the elevated sideways channel through 2050-2135 that held for much of the year, price may establish a sideways choppiness through either 1820-1920 or through 1860-1920, or, potentially, 1860-1990.

Further weakness would be expected for the weeks ahead due to the weak and bleak RSI and MACD line and the RSI and stochastics not yet at oversold levels. In the shorter term, however, the 2-hour chart is hinting at a bounce tomorrow and the histogram, stochastics and money flow are agreeable to a bounce on the weekly basis. The stock market is typically buoyant from the last day of the month into the first few days of the new month especially for a new quarter so the seasonality is on the bulls side. However, the period from September OpEx to mid-October is typically weak. Stocks may start a relief rally that runs into next week but further weakness should rear its head in October.

Looking at the big picture the strongest S/R is 1985-1988, 1978, 1973, 1965, 1961, 1951, 1942, 1924, 1897, 1884, 1878, 1874, 1872, 1848, 1841, 1808 and 1803. Price parked itself overnight directly on Keystone's 1884 level. The 1872-1878 level is a strong gauntlet of supportNote the air pockets between 1872 and 1848 and between 1841 and 1808This information is for educational and entertainment purposes only. Do not invest based on anything you read or view here. Consult your financial advisor before making any investment decision.

SPX S&P 500 Daily Chart Lower Band Violation

The pink arrows show tight squeeze moves at hand and in both mid-August and a few days ago the move in price is lower. The lower band is violated so a move back to the middle band at 1945.62, also the 20-day MA, and dropping is in play. Note how 4 days ago price tapped the lower band, then 3 days ago tapped the middle band, now it is back down to violating the lower band.

The thin green lines show positive slopes for all the indicators but it is not positive divergence; price needs to be lower than the August 1867 low for official possie d to print. The market bulls would have been better off for price to simply print at 1860-1867 since the chart above would point toward a relief rally with positive divergence. Currently the chart is in limbo; tomorrow is a key day.

The stochastics are oversold and need to see a bounce in price. The momo over the last few days, however, is downside momentum. The CPC and CPCE put/call ratios signal a bottom on tap at anytime. The expectation is that a relief rally is near. If price violates the 1867 level the chart will likely display positive divergence which would signal a relief rally. This information is for educational and entertainment purposes only. Do not invest based on anything you read or view here. Consult your financial advisor before making any investment decision.

SPX S&P 500 2-Hour Chart Positive Divergence Lower Band Violation

Let's zoom in closer on the 2-hour chart after the Tuesday session ends. Two more candlesticks print since about 4 hours of trading time has passed since the previous 2-hour chart. The MACD line is key and it continues to slope lower (red line) by a hair. Over the last five candlesticks, the RSI, histogram, stochastics and money flow are positively diverged wanting to see a bounce in price. The MACD line, however, and perhaps the money flow that is essentially flat, want to see another lower low in price after any bounce. Thus, stocks may need say two more candlesticks to properly bottom when price is at a lower low with the MACD line positively diverging (sloping upwards). That will verify the bottom is in. Two candlesticks is 4 hours of trading time so a bottom would be anticipated tomorrow (Wednesday).

The middle band is on the table since the lower band was violated. This is also the 20 MA that is at 1917 and falling. The key horizontal price support and resistance levels are at 1924, 1897, 1884, 1878, 1874, 1872 and 1848. Note how price parked itself exactly on Keystone's strong 1884 S/R level. The 1897 is a logical upside target. If it takes a couple candlesticks for the MACD line to positively diverge, the middle band will be down at 1905-1910 by then. Then if price bounces, with the middle band dropping, the 1897-1910 range is a logical upside target.

The CPC and CPCE put/calls remain elevated showing fear in the markets so a near-term market bottom should occur at any time. The TRIN Arms Index is wild printing an uber high reading near 3 on Monday that helped create the rally in stocks at this morning's opening bell, but the TRIN drops to 0.6 in the uber bullish territory. This may create some initial selling Wednesday which would be in tune with the chart above taking a couple candlesticks to set up with possie d with the MACD line.

Thus, mixing the analysis together and sprinkling some magic dust on it, stocks should bottom tomorrow say late morning perhaps in sync with the European markets closing and an upside target of 1897-1910 is in play. Of course a dramatic news event can always overrule any analysis and then the chart needs a little time to price that event in. Watch the MACD line; you want to see a lower low in price with the MACD line sloping upwards and you know the bottom is in. This information is for educational and entertainment purposes only. Do not invest based on anything you read or view here. Consult your financial advisor before making any investment decision.

SPX S&P 500 2-Hour Chart Positive Divergence Lower Band Violation

Here is a look at the SPX 2-hour chart which was highlighted yesterday. Positive divergence was setting up and a bounce was expected but waves of bad news yesterday including oil plummeting, energy collapsing, commodities crumbling, biotech bludgeoned, high-yield bonds in trouble and the Saudi's pulling money from US funds, sends stocks lower.

The SPX continues to violate the lower pink band so a move back to the center band at 1922 is in play. Price came down and even though it did not test the 1867 August low directly, it was in the neighborhood and the indicators are positively sloped over that one-month period which is a positive for bulls. It is not officially positive divergence over the one-month period, however, since price did not make a lower low under 1867. This can still happen it all depends on the MACD line. Everybody and his brother are watching 1867. The cab driver said he is watching SPX 1867.

Yesterday the indicators slipped lower as the waves of bad news hit stocks. The tiny green lines show positive divergence that is bouncing stocks in the early going today but note that the MACD line remains a bit unconvinced of a recovery rally. The MACD line is flattening which is encouraging for the bulls. The expectation is that the MACD line should curl higher over the next candlestick or two (1 to 4 hours of trading time) which is now through 3 PM, say the closing bell, which should place a firm near-term bottom.

The high CPC and CPCE put/calls point towards a near-term bottom at hand along with the high TRIN Arms Index described yesterday and the excessive -1200 ticks from the TICK machine.

The expectation is for stocks to base today and stage a recovery rally targeting the key 1897, 1909, 1920 and strong 1924 resistance levels. The 1920-1924 area jives with the 20 MA at 1922 which is on the table due to the lower band violation. Reference the SPX S/R missive previously posted. The 1872-1878 is a strong support gauntlet and note how price dropped to 1876.34 and bounced; the gauntlet held.

The SPX appears ready to stage a recovery rally but watch the MACD line to make sure. Keybot the Quant remains short the market and the algo is tracking UTIL 569.68 as a key level. Remember, Keybot is designed to provide the smoothest path through the trading year. The 2-hour chart technical analysis above is for the shorter time frame. If utilities move above this level it will prove that the market bulls have the beginning stages of strength to take stocks higher. UTIL is at 566 remaining in the bear camp currently which will continue to create a weight on the broad market. Watch for UTIL 569.68 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 1:32 PM EST: In the early afternoon, equities were trading dead flat but are beginning to ramp higher. The SPX is up 7 points to 1888. The strong S/R in this area is 1897, 1884 and 1878. UTIL is 566.70 under the 569.68 that the Keybot the Quant algorithm is tracking so bulls cannot gain upside traction. On the SPX 2-hour chart, the MACD line plays it coy, hinting at flattening which hints of confirming positive divergence especially with price printing matching lows over the last four 2-hour candlesticks. The expectation would be for stocks to start a recovery move higher today, for the near-term, but the bears keep applying pressure. Bulls need that MACD line on the 2-hour chart to start moving higher as well as the utilities to move higher.

SPX S&P 500 Support, Resistance (S/R), Moving Averages and Other Important Levels for Trading the Week of 9/28/15

SPX (S&P 500) support, resistance (S/R), moving averages and other important levels are provided for trading the week of 9/28/15. 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 2134.72 on 5/20/15 and the SPX all-time closing high is 2130.82 on 5/21/15. The intraday low for this year is 1867.01 on 8/24/15. Everybody and his brother are watching this level. The closing low for this year is 1867.61 on 8/25/15.

For Tuesday with the SPX starting at 1882, the bulls need to push above 1929 to regain their mojo. The bears need to push only three points lower, under 1879 to accelerate the downside. A move through 1880-1928 is sideways action for Tuesday.

The high TRIN, low TICK readings at -1200, and high CPC and CPCE put/call ratios all hint that a recovery move is on tap for stocks (see previous charts).

August was a negative month. September began at 1972 and month and quarter end is tomorrow, EOM and EOQ3, respectively, so another negative month may print.

Looking at the big picture the strongest S/R is 1985-1988, 1978, 1973, 1965, 1961, 1951, 1942, 1924, 1897, 1884, 1878, 1874, 1872, 1848, 1841, 1808 and 1803. The 1872-1878 level is a strong gauntlet of supportNote the air pockets between 1872 and 1848 and between 1841 and 1808.

2135 (5/20/15 All-Time Intraday High: 2134.72)
2133 (7/20/15 Intraday High 2132.82)
2131 (5/21/15 All-Time Closing High: 2130.82)
2130 (6/22/15 Intraday High 2129.87)
2129
2128 (7/20/15 Closing High 2128.28)
2126 (4/27/15 Intraday High: 2125.92)
2124 (6/23/15 closing High: 2124.20)
2123
2121 (4/24/15 Intraday High: 2120.92)
2120 (2/25/15 Intraday High: 2119.59)
2118 (4/24/15 Closing High: 2117.69)
2117 (3/2/15 Closing High: 2117.39)
2114
2110
2109
2108
2107
2105
2104
2103
2102
2100
2099
2097
2094 (12/29/14 Intraday High: 2093.55)
2093
2091 (12/29/14 Closing High: 2090.57)
2089
2086
2084
2081
2080
2079 (12/5/14 Intraday High: 2079.47)
2076 (11/28/14 Intraday High: 2075.76)
2075 (12/5/14 Closing High: 2075.37)
2073 (11/26/14 Closing High: 2072.83)
2072
2071 (11/21/14 Intraday High: 2071.46)
2069
2068.09 (150-day MA; the Slope is a Keystone Cyclical Signal)
2067
2065
2063.97 (200-day MA)
2063
2061
2058.90 Trading for 2015 Begins Here
2057.66 (100-day MA)
2057
2056.96 (50-week MA)
2056 (11/18/14 Intraday High: 2056.08)
2053
2050
2049
2046 (11/13/14 Intraday High: 2046.18)
2044.00 (20-week MA)
2043.81 (10-month MA; a major market warning signal)
2043.64 (12-month MA; a Keystone Cyclical Signal) (the cliff)
2041
2040
2038
2034
2032
2030
2024
2023
2021
2019 (9/19/14 Intraday High: 2019.26)
2018
2012.98 (50-day MA)
2011 (9/18/14 Closing High: 2011.36) (9/4/14 Intraday High: 2011.17)
2007 (9/5/14 Closing High: 2007.71)
2005 (8/26/14 Intraday High: 2005.04)
2003 (8/29/14 Closing High: 2003.37)
2002
2001
1999
1998
1997
1996.48 (20-month MA)
1995
1993 (1/15/15 Closing Low: 1992.67)
1991 (7/24/14 Intraday Top: 1991.39)
1988 (7/24/14 Closing High: 1987.98)
1986 (7/3/14 Intraday Top: 1985.59)
1985 (7/3/14 Closing High: 1985.44)
1983
1982
1981 (2/2/15 Intraday Low: 1980.90)
1979.64 Previous Week’s High
1979
1978
1976
1973
1972.65 (100-week MA)
1972.18 September Begins Here
1970.57 (200 EMA on 60-Minute Chart a Keystone Market Turn Signal)
1970
1968 (6/24/14 Intraday Top: 1968.17)
1965
1964
1963 (6/20/14 Closing High: 1962.87)
1961
1958
1956 (6/9/14 Intraday Top: 1955.55)
1951 (6/9/14 Closing High: 1951.27)
1949
1948
1945.73 (20-day MA)
1943
1942
1937
1936
1931
1929.18 Monday HOD
1929
1928
1924 (5/30/14 Intraday Top: 1924.03) (5/13/14 Closing High: 1923.57)
1920
1917
1912
1910
1908.92 Previous Week’s Low
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)
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
1881.77 Monday Close – Tuesday Starts Here
1880
1879.21 Monday LOD
1879
1878 (3/7/14 Closing High: 1878.04)
1877
1874
1873
1872
1870
1868 (8/25/15 Closing Low for 2015: 1867.61)
1867 (8/24/15 Intraday Low for 2015: 1867.01)
1865
1862
1859
1855
1851 (1/15/14 Intraday Top: 1850.84)
1849 (12/31/13 Intraday High Top for 2013: 1849.44)
1848 (1/15/14 Closing High: 1848.38) (12/31/13 Closing High for 2013: 1848.36)
1846.01 (150-week MA)
1846
1845
1843
1842
1841
1840
1839
1835
1831
1828
1827
1824
1820
1816
1814 (11/29/13 Intraday Top: 1813.55)
1812 (12/9/13 Intraday Top: 1811.52)
1810
1809 (12/9/13 Closing Top: 1808.37)
1808
1807 (11/27/13 Closing Top: 1807.23)
1806
1803
1801
1800
1799 (11/18/13 Intraday Top: 1798.82)
1798 (11/15/13 Closing Top: 1798.18)
1796
1793
1791
1788
1785
1783
1782
1781
1777
1775 (10/30/13 Intraday Top: 1775.22)
1772 (10/29/13 Closing Top: 1771.95)
1770
1768
1763
1762
1759
1756
1752
1748
1747
1745
1740
1737
1733 (10/17/13 and 1018/13 Gap-Up: 1733.15-1736.72)
1730 (9/19/13 Intraday Top: 1729.86)
1726 (9/18/13 Closing Top: 1725.52)
1725.90 (200-week MA)
1722
1720
1711
1710 (8/2/13 Intraday Top: 1709.67)
1709
1708
1706
1703

Note Added 10:01 AM EST: Tuesday trading is underway and the SPX drops to a LOD at 1876.34 and bounces strongly. The 1872-1878 gauntlet of support mentioned above holds, for now. Price has not yet directly tested the 1867 low from August.

BLK Blackrock Weekly Chart Saudi's Exiting Funds

A contributing factor to the large broad market selloff yesterday, that went somewhat under the radar screen except for professional traders, is the Saudi's moving money out of money management funds such as Blackrock. The drop in oil prices hurts the Saudi Arabia economy since it is almost universally dependent on oil income. The Saudi's are pulling money from hedge funds and other investment funds to keep supporting the country's social programs.

As firms like BLK watch the outflows taking place, concern grows that opportunities will be more limited. Traders were already sniffing this out this year as BLK topped in the spring time and rolled over from 380 down to sub 3 hundo. The support at 290-ish is very strong; if it fails Backrock will fall down the rabbit hole. The brown lines show a head and shoulders (H&S) vibe with head at 380 and neck line at 290-ish. If 290 fails, price will target 200.

The MACD line is sloping negatively with the RSI, histogram, stochastics and money flow sloping positively over the last month. The green lines are not positive divergence as yet, however, since price has to print a lower low to create the divergence. BLK was far above the moving averages and is now performing a mean reversion lower and the 200-week MA at 263 and rising is an attractive downside target.

The projection would be for BLK to come down to test the trend line support at 290-ish for a bounce or die decision. The indicators would be positively diverged with the lower low in price so a bounce would be in order for a week or three but the weak and bleak MACD line will want price to come down for another low say in October or November. So BLK should stagger through 260-320 into the end of the year. Most important is how much money do the Saudi's plan on withdrawing from US hedge and investment funds? 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 PM EST: BLK drops -0.2% to 293.52. BX (Blackstone) drops -2.7% adding to the ongoing huge losses. BX was 43 only 4 months ago now at 30 about -30%.

HYG High Yield Corporate Bonds Weekly Chart Exposure to Energy and Commodities Creates Angst

Fears concerning the credit markets was one of the contributing factors in yesterday's broad market selling. Keep an eye  on HYG and JNK going forward. HYG collapses -1.5% yesterday now at lows not seen for two years. The brown sideways channel through 83-89 is in play. Price stopped exactly at the 200-week MA support at 82.76 and will make a critical bounce or die decision. Note the tweezer top (red circle) in October of last year which ushered in the collapse from over 90 to 83.

The red lines show the double-top formation, overbot conditions and universal neggie d (red lines) for all the indicators so the top call in May was easy (red arrow). Price now makes a lower low compared to the August low and the stochastics and histogram are positively diverged wanting price to bounce for a week or three. The RSI, MACD line and money flow are weak and bleak (red lines), however, so price would be expected to roll over and print lower after any bounce occurs for a week or so.

About 15% to 25% of the high-yield instruments are exposed to the energy industry in some form and the ongoing low oil prices and commodity collapse is creating serious angst in the credit markets. Price may bounce in the very short term as discussed above (targeting the 83.7-84.0 gap) but lower lows should occur afterwards with the gap fill under 82 (pink circle) a 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.

SGG Sugar ETF Daily Chart Sideways Channel

Sugar is sweet in yesterday's trading as the broad stock market tumbles lower. SGG gains +0.3% as the markets collapse. Keystone highlighted the bottom in SGG due to the falling wedge pattern, oversold conditions and positive divergence (green lines for the indicators) on both the daily and weekly charts. A bounce was expected (green arrow) which occurs. Price now staggers sideways through the brown channel at 25.5-28.0. A breakout either way from these levels is very key.

Sugar is bouncing up and down creating big gaps as the broad market bounces violently due to higher volatility. The purple circle shows an island reversal pattern. Price gapped lower from 27 to 26.3 and lower which created the island; then price recovers to 26.3 and boom, gaps up to 27 and higher creating the textbook island reversal. The 20-day MA crosses above the 50-day MA which is encouraging for the long side. SGG is testing the overhead resistance at the 20-week MA at 28.04.

Keystone went long SGG and the position is profitable; will likely let it sit there a while. SGG should move sideways with an upward bias into the end of the year so sugar is a potential area to park money amidst the market tumult. CANE is another sugar play (it gained +0.2% yesterday) but it is extremely thinly traded moreso than SGG so be mindful of the low liquidity. 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.

GLNCY Glencore Daily Chart Commodities Collapse Traders Ask if Glencore is Another Lehman Brothers

Coal, iron ore and other minerals and metals producer Glencore has had a spectacular fall from grace. Glencore has crashed from above 12 in July 2014 to 2.07 in September 2015 an over -83% failure. Glencore is up +10% off the 2.07 bottom in today's trading. The death cross (red circle) chart pattern occurs in early November of last year 10 months ago.

Just as Lehman Brothers brought down the global financial system in late 2008 concern grows that Glencore may be another Lehman Brothers. The commodity rout is extensive and represents rampant global deflation. This information is for educational and entertainment purposes only. Do not invest based on anything you read or view here. Consult your financial advisor before making any investment decision.

Monday, September 28, 2015

COMPQ Nasdaq Composite Daily Chart Prints Death Cross Chart Pattern

The Nasdaq finally joins the SPX, Dow and Russell 2000 small caps printing a Death Cross chart pattern where the 50-day MA stabs down through the 200-day MA and signals continued weakness for days, weeks and months ahead. Typically, since it takes a lot of downward price action to send the 50-day moving average lower, price will bounce as a death cross occurs. However, as long as the 50-day stays under the 200-day, stocks are in serious trouble. In the near-term, look for a potential bounce and recovery move but price would be expected to roll over again and move lower for the 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.

CPC and CPCE Put/Call Ratios Daily Charts


The put/call ratio's ramp higher as fear and panic grows. The green circles are a sufficient level of fear to create a near-term market bottom. The TRIN Arms Index prints 2.91 displaying uber negativity and this is consistent where a rally should occur for a day or three (to send the TRIN back down towards neutral 1.00). Ditto the TICK machine that was printing -1000 and -1200 ticks left and right today. All these parameters signal a near-term market bottom at hand (for short-term trading). The SPX should rally which will send the put/call ratios lower as the green arrows indicate. 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.

TICK Tick and TRIN Arms Index Daily Charts


The TICK and TRIN, critical indicators for day traders, hit uber bearish levels today. The baby is thrown out with the bathwater the bathtub, the sink and everything else. Traders are wringing their hands in fear and worry one soul screaming that 'the end is near'. The TICK machine is registering -1000 hits verifying uber bearishness exactly when the stock market bounces. The lows of the day are occurring now with the uber low -1200 TICK (you do not see this often).

Ditto the TRIN Arms Index up to 2.7. This reflects uber negativity with stocks. All hope is lost. Traders are yelling at each other to sell everything no matter what. You know what happens when the sentiment is this extreme with the TICK and TRIN (think from a contrarian perspective); a relief recovery rally in stock prices would be expected. The uber high TRIN should lead to a higher stock market tomorrow that can dissipate some of the negative energy. 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 3:03 PM EST:  The bears are taking no prisoners with stocks at the lows. The SPX is down 48 points, -2.5%, to 1884. The LOD is 1880 at 2:21 PM EST. The TRIN spikes to another 2.75 print and is now at 2.32. The TICK prints another uber low -1200 at 2:18 PM which identified the low occurring in stocks. A -1000 print occurs at 2:53 PM. VIX is at 27.71 under the HOD at 28.15 at 2:21 PM which also marked the inflection point for stocks to recover for a few minutes. Everybody and his bro is saying the 1867 low will be tested for the SPX which comically means it bounces now or way lower. Equities will likely bounce tomorrow. 

Note Added 3:10 PM EST: The SPX drops 51 points, -2.6%, to 1880 now at comparable levels to late August. The Dow is down over 3 hundo. The SPX 2-hour chart shows the RSI and MACD line slipping slightly (see previous chart) but over the one month period the indicators are positively diverged so the bottom is likely in 2 or 3 candlesticks which is about 4 to 6 hours of time which would be tomorrow. The SPX is down below the lower standard deviation band so it will need to revert higher. Perhjaps Mr Market is sucking everyone in right now since the pundits are touting 1867 and lower, some say 1850 is on tap, only to then pull the rug out from under the bears. The uber high TRIN will need a rally move in stocks to relieve the negative energy.

SPX S&P 500 and UPS United Parcel Service Weekly Charts Negative 20/50-MA Crosses Verify Cyclical Bear Market


On Friday, the S&P 500 (SPX) 20-week MA crossed down through the 50-week MA a very bearish development which locks in the projections for a cyclical bear market ahead. The Dow Industrials (INDU) negative 20/50-week MA cross has occurred but the Nasdaq Composite (COMPQ) has not. The Russell 2000 (RUT) negative 20/50-week MA cross will occur any day.

Remember that one of Keystone's key cyclical market signals is the 20/50-week MA cross on UPS since it is a key global economic bellwether. More shipping equals a strong economy less shipping indicates weakness. The UPS negative cross remains in play which forecasts a continued cyclical bear market ahead for equities. Things will only get worse if UPS price stays under the 20-week MA at 98.60 and heads lower. Market bulls will show a slight sign of life if they can at least sneak the UPS price above the 20 MA since this will curl the 20 MA higher. If you followed Keystone's UPS signal in April you saved a boat load of money by ditching longs. This information is for educational and entertainment purposes only. Do not invest based on anything you read or view here. Consult your financial advisor before making any investment decision.

SPX S&P 500 2-Hour Chart Positive Divergence Lower Band Violation

President Obama is speaking at the United Nations assembly in New York. Stocks begin the week on a down note. The new price low as compared to last week occurs with the indicators all positively diverged wanting to see a bounce in price. The LOD is 1902.85 thus far now printing 1908. The MACD cross is negative but the line is positively diverged so the cross may reverse in a couple candlesticks time.

The SPX violates the lower standard deviation line (pink) so a move back to the middle band, at a minimum, at 1936 and falling is on the table. The month ends Wednesday and September began at 1972 so keep watching to see if the bulls may want to try and make a run for a positive month.

The full moon was last evening and stocks are usually bullish through the full moon but today starts off weak so far. The quarter and month end, EOQ3 and EOM, respectively, may create window dressing and some stock buoyancy. New money is typically put to work from the last day of the month into the first few days of the new month creating buoyancy in equities. The bulls have the seasonality factors on their side for this week, however, the stock market is typically weak between September OpEx (9/18/15) and mid-October each year.

The SPX would be expected to bounce perhaps after European trading closes. The next couple candlesticks are important. If any of the indicators slip then prices will remain soft for a few more hours. Keystone bot some index longs for a quickie trade expecting price to bounce. The SPX is hanging around at the day's lows as this is typed at 1905 sitting on the lower band at 1905. 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.

IBB Biotech Weekly Chart Bear Market

The biotech sector is in a bear market down in excess of -20% off the July top at 402. The -10% correction occurs at 362 which was also a failure of the 20-week MA support. The -20% correction is at 322 with price down to 304 currently now down -24.4% from the top.

The red rising wedge pattern, overbot conditions and negative divergence all indicated a major top for biotech in July, as Keystone had forecasted at the time with the charts, which occurs. The collapses from rising wedges can be quite dramatic and the biotech stocks are not disappointing. Note how price is extended above the moving averages requiring a mean reversion (purple dots) which occurs just as day follows night and night follows day.

The price low is comparing back to the August flash crash and back to late 2014 levels. The daily chart is positively diverged which agrees with the possie d for the stochastics in the weekly chart above so a bounce in biotech stocks should be on tap for the coming days or week or two, however, the red lines for the indicators show a weak and bleak profile so IBB likely wants to print lower lows in the future weeks after any short term bounce occurs.

The green falling wedge pattern may develop as the days and weeks move along with price trying to hold the support at the 100-week MA at 292. The 275-280 level is also a downside target since it is key price support/resistance and perhaps price will explore this level as the year ends and new year begins. 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.

STI Singapore Straits Times Daily Chart Enters Bear Market

Singapore is singin' the blues as it enters a bear market Friday and today. The chart is not yet updated but the current print for today is 2792 after a -1.4% loss to begin the week. Global traders are becoming very concerned over emerging market weakness. The Straits Times peaked at 3550 in April. The -10% correction territory occurs at 3195 and now bear market territory down -20% under the 2840 level. 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, September 25, 2015

SPX S&P 500 2-Hour Chart Lower Band Violation Bear Flag Rising Wedge

S&P futures are up +25 pointing to a rally on tap. The CPCE put/call is elevated to where prior bottoms occurred. The BPSPX, however, issues a market sell signal. The 2-hour chart shows a weak and bleak MACD line wanting another low but a Yellen Rally appears on tap instead. The central bankers are the market.

A bear flag pattern is in play (see previous chart) shown by the red lines which targets 1795 on the downside. Watch to see if the bulls can negate the pattern by moving above the red trend line at the 1960-1980 area. Price violated the lower pink standard deviation line so a move back to the middle line is in play which is at 1946 and falling and a potential move to the upper band at 1981 and falling.

The positive divergence (green lines) were ready to bounce the SPX but as mentioned above regardless of Yellen's words but the MACD line did want one more low in price. The Yellen and central banker joy always overrides the charts and then the charts will adjust. The red rising wedge pattern is in play (thin red lines) which forecasts much lower numbers ahead. Markets should continue the choppy sideways behavior. The 20-day MA is 1958.20 moving sideways so watch this level. The critically important 200 EMA on the SPX 60-minute chart, a key short term signal, is at 1979.52 drifting lower so this is another key area to watch.

Keybot the Quant is short. The algo is fixated on UTIL 569.68 which will be a critical bull-bear line in the sand through next Friday. If UTIL finishes today under 569.68 the bears will have the upper hand come Monday but if UTIL finishes above 569.68 it should be all systems go for the market bulls. A full moon is on Sunday and markets are typically bullish moving through the full moon. This information is for educational and entertainment purposes only. Do not invest based on anything you read or view here. Consult your financial advisor before making any investment decision.

SPX S&P 500 Daily Chart Bear Flag Pattern

The SPX two-leg bear flag pattern is of interest to technicians moving forward. The first leg of the bear flag is down from 2100 to 1870, let's call it 230 points. Then price consolidates sideways with a slight upward bias which is textbook bear flag behavior. The sideways consolidation can be called a pennant with the thicker triangle lines or you can call it a flag with the rectangular consolidation. The peak of that consolidation zone is 2025 so the projection target for leg two would be 1795 (2025-230).

Price ruptured the bottom trend line which places the 1795 target immediately in play. Price has collapsed over the last few days so the recovery rally on tap today (S&P futures are +25 ahead of the opening bell) may create a back kiss move to that lower trend line so the 1965-1970 area becomes important. Bulls can negate the bear flag pattern if the SPX moves above 1975 heading higher. Bears will maintain the bear flag pattern downside projection as long as price stays below 1970. 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 S&P 500 Bullish Percent Daily Chart

The BPSPX issues a market sell signal yesterday performing a six percentage-point reversal from 44.50 to 38.50. The BPSPX drops to 36.80 so the bears receive the go signal for the path ahead. The bulls ran out of gas and will need the BPSPX to move above 42.80 (36.80+6) to regain their mojo. S&P futures are up +25 ahead of Friday trading. 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.

Tuesday, September 22, 2015

BPSPX S&P 500 Bullish Percent Index Daily Chart

The BPSPX remains on a double whammy market buy signal. Price reversed 6 percentage-points from 22.5 to 28.5 creating a market buy signal ending the waterfall crash in August and then above the 30% level creating the double whammy buy. Market bears must reverse the BPSPX by 6 points, from the 44.5 near-term top to 38.5, to receive a market sell signal. Thus, the bulls will remain in control as long as the BPSPX remains above 38.5 and higher. 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

The fight over the last couple weeks was the bullish ascending triangle versus the bearish red rising wedge. The patterns compete and late last week the bulls break out above the triangle base line at 1990 and throw confetti to celebrate the upside which would target 2110, but alas, the bears spank price down from the 150 MA resistance on the 2-hour chart. The red lines show the negative divergence with the indicator that occurred when price spiked which sealed the negative fate for the upside. On a breakout you want the indicators to be long and strong not turning over with neggie d.

So this week the bears win with price collapsing out the bottom trend line of the red rising wedge. Bears throw confetti to celebrate the break down. The collapses from rising wedges can be quite dramatic and a move down to potentially retest the August lows could easily occur due to a rising wedge pattern.

The indicators are weak and bleak so after any bounce price will want to make new lows again in this 2-hour time frame. The RSI is flattening and stochastics are oversold so stocks may be able to find a base and recover in a few hours time. Watch for when the MACD line turns positively. Price is using the support from last week to hold the line at 1941-ish, for now. if this 1940-1941 level fails, price will target the gap fill (tiny circle) at 1925-ish and the support at 1910-1920. Stocks are chopping sideways which is action that chews up bulls and bears alike. It is usually best to do a lot of patient watching in this type of whipsaw action.

By the time Keystone finishes this wind-bag commentary, the SPX drops to 1938, losing that critical support level from last week, check that, now sporting  a 1937-handle. 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 10:39 AM: SPX LOD is printing right now at 1935.01. The top of that gap fill is at 1928-ish.

Note Added 10:45 AM:  The TRIN Arms Index spikes to 3.74 displaying uber negativity and bearishness so this will only set up a market bounce probably tomorrow. This hints that choppy sideways markets will continue a couple days. With the high TRIN reading, buying some index longs this afternoon may be prudent to ride a pending rally say tomorrow due to the high TRIN reading that is printing today. SPX is at another LOD at 1933.02. The gap is only 5 points away.

SYNC Synacor Daily Chart Falling Wedge Positive Divergence

Cloud-based services company SYNC is a interesting knife-catch long play. Keystone opened up a long position in SYNC Friday and will likely add as time moves along. The daily and weekly charts are positively diverged (green lines) hinting that price wants to break out from the upper trend line of the bullish falling wedge pattern. Price is extended down below the moving averages so a mean revesion higher is needed. As always, these positive divergence plays are highly speculative and dangerous. SYNC is up +0.7% in today's down tape, so far, an encouraging sign for Synacor bulls if it sticks. SYNC may also be a takeover target but you never buy a stock for this reason since waiting for a buyout may be like waiting for Godot. 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.

CPCE CBOE Put/Call Ratio Daily Chart

The CPCE put/call ratio surprisingly drops to 0.55. Traders were buying calls like madmen yesterday all looking for a strong rally; today they all get slapped in the face with S&P futures down -30 or more. The red circles show complacency and no fear or worry which creates near-term tops in stocks. Interestingly, the CPC put/call did not come down to the uber bullish complacency low like the CPCE. Typically, both the CPC and CPCE will signal the same so markets may remain choppy sideways for a couple days until the CPC and CPCE sync up with both showing high levels or both showing low levels so a clear path forward can be projected. 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.

Saturday, September 19, 2015

TRIN Arms Index and SPX S&P 500 Daily Charts Signal Near Term Bottom At Hand


The TRIN Arms Index prints uber bearish on Friday indicating that a near-term bottom is at hand. Keystone bot index calls and long ETF's on Friday afternoon anticipating a bounce early next week for the broad stock market.  This is VST (very short term) trading only and the trade is expected to only last a day or few. The broad markets remain in a cyclical bear market pattern (weeks and months ahead) and Keybot the Quant trading algorithm is currently bearish (although markets are choppy and it would not be surprising to see the algo flip back to the bull side early next week).

The green circles show the peak times of fear and panic on the TRIN. On Friday, as the stock market collapsed lower, several traders jumped from windows distraught with fear and worry. Fortunately, the windows were on the ground floor. Peaks in sentiment identify turning points. So peak fear identifies a bottom (green circle) and peak complacency and joy signals a market top (red circles). What do you think will happen?

The 1.00 line on the TRIN is a neutral level. Between 0.8 and 1.0 is bullish markets. Buyers are boosting stock prices higher at a steady-eddy pace that may continue for several days. Under 0.80 and the bullishness is getting out of hand. Under 0.50 and the bullishness is off the charts. Traders are staggering around drinking Fed wine and buying any stock with a heartbeat with no fear or worry. That is when the markets top out and are spanked lower.

Between 1.0 and 1.4-ish, or 1.6-ish, is steady-eddy selling in the stock market that may continue for several days. Above 1.6 and the selling and bearishness is starting to get out of hand. Above 2.0 and the bearishness is off the charts. Traders are crying into the palms of their hands; others are proclaiming that the end is near and all hope is lost. Of course, this peak in negative sentiment is when a market bottom occurs and recovery. 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 9:11 AM EST Tuesday morning, 9/22/15: A bounce occurs for equities with the SPX up 9 points, up about 20 or so intraday, and the Dow finishing up 125 points, however, the Nasdaq and Russell 2000 were flat in Monday trading. S&P futures point to a drop of 30 handles at the opening bell. Keep an eye on the TRIN to see what level it spikes up to. The CPC put/call ratio plummeted to 0.55 a sharp and surprising move that shows traders uber bullish buying boat loads of calls yesterday becoming complacent at the stock market so this morning they are slapped in the face.

Note Added 10:45 AM EST Tuesday morning, 9/22/15, with trading underway:  The TRIN Arms Index spikes to 3.74 displaying uber negativity and bearishness so this will only set up a market bounce probably tomorrow. This hints that choppy sideways markets will continue a couple days. With the high TRIN reading, buying some index longs this afternoon may be prudent to ride a pending rally say tomorrow due to the high TRIN reading that is printing today.

DAX Germany Daily Chart on Verge of Bear Market

The DAX slipped into a bear market on Friday, down in excess of -20% from the April top, but managed to recover by a hair to close out the week. The DAX peaked at 12391 on 4/10/15 so a -20% bear market begins at 9913. Comically, the market makers squeezed it back above this threshold to close at 9916 and avert the bear market by a hair. The DAX slipped into a bear market in August but recovered and today is back in the soup.

The -10% correction occurred at 11152 the thin pink line. Note how price came down and bounced trying to avoid the correction territory with all its might, only to fail in June. That battle continued and then the bears won in early August when the DAX fell into correction territory and the waterfall crash began. The expansion, or megaphone, pattern is in play with price at the lower trend line so a near term bounce may be in order.

The DAX began the year at 9806 only about 100 handles lower so if this level is breached, Germany will be negative on the year. All the pundits parading across television and computer screens this year professing to buy Europe especially Germany are wrong. If you followed their advice you have less money. ECB President Draghi needs a bigger money bazooka so he can send the euro lower and European stocks higher. 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 9:15 AM EST on Tuesday morning, 9/22/15: The DAX is collapsing -3.3% down to 9620 obviously in the -20% bear market phase and the DAX is down -1.9% for the year.