Friday, October 30, 2015

SPX S&P 500 2-Hour Chart Global Central Bankers Collude to Pump Stocks Higher Overbot Rising Wedge Negative Divergence

The central banker orgy beginning at SPX 1990 two weeks ago may finally be running out of gas. The maroon lines show overbot conditions, the rising wedge pattern (bearish) and negative divergence across all indicators wanting price to top out here and receive a smack down lower. The HOD is 2094. Price remains on an island above 2060. Price was only a hair away from filling the gap at 2096-ish you will see on the daily chart. The MACD line on the SPX daily chart is long and strong and wants price to come back up again after a pullback. Thus, if the 2-hour neggie d exerts itself now with a spankdown that may create weakness into the closing bell and early next week but price will come back up again probably to fill the 2096-ish gap to satisfy the MACD line on the daily. Then the daily chart may be in universal neggie d pointing to more downside ahead. If price moves down to 2060 now, then bounces again that would place an H&S pattern in play with neck line at 2060 and only needing to finish the right shoulder.

The circles show the collusion by the global central bankers. The pink circle is the WSJ article by Jon Hilsenrath that kicked off the festivities in the futures market on Wednesday evening, 10/14/15. The neon blue circle is the ECB promising to deliver more QE on 12/3/15. Then the PBOC tag-teamed with Draghi for the gold circle after China cut rates and bank lending restrictions. Then the fourth circle the FOMC meeting this week. At first, traders thought the Fed was a touch hawkish but quickly realized the Fed will not raise rates on 12/16/15 only a few days after Draghi eases on 12/3/15. More ECB QE will send the euro lower and US dollar higher and a Fed hike will create a higher dollar. Emerging markets will be wiped out with the higher dollar. Anyway, for now, the four central banker pumps send the SPX from 1990 to 2094; over 100 handles in 10 trading days; +5.2%. What power the central bankers hold! Rejoice in their majesty! Kneel and worship at the feet of the modern-day money-changers guarding the Temple! It is shameful.

Note how the 2-hour chart sets up with neggie d and price begins to receive its expected spankdown only for the central bankers to intervene to keep stocks elevated. Each time the easy money juice diminishes, the neggie d kicks in again, but then another central banker starts printing money to save the day. Rinse and repeat. The BOJ rate decision was this morning and they were the ones expected to ease a couple weeks ago instead the coordinated collusion described above occurred and the BOJ stands pat. They are all in cahoots. BOJ has got big problems since there is nothing left for the bank to buy; it will have to start buying very risky assets and you know that will have an ugly ending. The central bankers are sick; they believe they have no other choice except to keep printing money.

The fun continues. These are historic and epic times for economics and world markets. You will look back years from now and realize this point in time, 2015 into 2016, was a major inflection point for world markets. The SPX should venture lower due to the neggie d in this 2-hour time frame, say for a couple days or so, then likely recover again into the mid to upper 2090's next week. A closer look at charts can occur on the weekend. 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 5:44 PM EST: The negative divergence begins a spankdown sending price from the 2094 intraday top to 2079 at the closing bell. The weakness should persist unless, yes, you guessed it, unless a central bank decides to do more pumping.

Wednesday, October 28, 2015

SPX S&P 500 2-Hour Chart Negative Divergence

The charts are pricing in the central banker money pump over the last couple weeks and the 2-hour comes up for another high but all the indicators are negatively diverged. The expectation is for a spank down in this 2-hour time frame to begin at any time forward. The bulls are running higher today with a 13-point gain. The Fed decision is at 2 PM EST so that may create wild action one way or the other. If the Fed was not on tap, the chart says price should retreat from these levels to take a rest.

The BOJ decision on Friday morning, which will be known before US markets open on Friday morning is far more important since it will create volatility in the yen and global markets. If the smack down occurs now in this 2-hour time frame as the neggie d suggests, and the weakness continues for a few candlesticks of time that would place the market at Friday morning when the BOJ decision will be known and the bulls may then step back in to take the SPX back up. The RUT small caps launch +2.1% today a huge move.

Note the gap below at 2053-2060. This places the SPX on an island so an island reversal pattern is possible where price would come down and then fall through the gap from 2060 to under 2053 in a heartbeat. Or, price may simply come down to fill the gap between 2053 and  2060. There  are many moving averages in this area that will influence price. 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 8:57 PM EST: Now you see why the central banker caveat must always be mentioned. The Fed pumps stocks higher again today after the rate decision. Stocks initially fell, with the help of the neggie d above, but as the Fed statement was viewed more dovishly with a rate hike not likely until next year, stocks catapulted higher and did not look back. So like prior gooses, the chart will need a little time to price it in. The central bankers are in a full contact pumping mode. On 10/14/15, the Hilsenrath/Fed rally started the stock market orgy. This would keep things elevated a few days until ECB Presdient Draghi could provide lip service on more QE on 10/22/15. Markets took another leg higher. Then on 10/23/15, the PBOC cuts rates and bank triple R's to goose stocks further. Just when the central banker pumping appeared to be subsiding, boom, today another Fed pump occurs. Then the grandaddy of all pumpers, the BOJ, may provide easy money crack cocaine on Friday morning. It is obscene. These money printing madmen are out of control. They worship at a Keynesian altar. The 2-hour chart creates a spank down but price recovers this afternoon; the latest candlestick prints a hanging man that typically denotes a trend change. In other words, the same analysis holds as described above. Indicators remain neggie d so the pull back would be expected despite the goosing by the Fed today. The BOJ on Friday morning, however, is another wild card that may keep the central banker orgy alive. The CPCE put/call ratio drops to 0.54. You know what that means. The CPC is lower as well. Complacency is back in vogue so the put/calls indicate a market top is in play for the days ahead.

Tuesday, October 27, 2015

SPX S&P 500 2-Hour Chart Sideways Triangle

The 2-hour chart continues to digest the central banker pumping over the last two weeks. As described in prior charts, the brown circle is the Jon Hilsenrath article that started the rally. The blue circle is ECB Presdient Draghi promising a bright new shiny pony in early December. The gold circle is the PBOC cutting rates and bank triple R's. The central bankers are the market. You have to be blind and dumb to not see and understand this fact; nothing has changed over the last 6-1/2 years since the Fed began their Keynesian schemes with QE 1 in early 2009.

The neon green sideways triangle needs to make a decision. The vertical side is 20 handles so price will either jump to 2090 or drop to 2050. Yesterday's candlesticks are in a tight range. Five candlesticks ago late Friday price spiked to a new top and the indicators were negatively diverged except for the MACD line in the near term that is open to another higher high. In general, the chart is consistent with topping behavior. The market bears would be okay if price comes up for the higher high say at 2080 because neggie d should be in place for all indicators at that time and that would smack price lower going forward in this 2 hour time frame. The other alternative is that price would roll over from here.

The SPX receives upside juice from the tight standard deviation band squeeze. Price has violated the upper band so a move back to the middle band, the 20-day MA, at 2050, and rising, is in play. The year began at 2059. Price is expected to top out at this 2070-2090 level over the coming hours and venture lower to 2050-2060. The FOMC rate decision is on tap tomorrow afternoon so the market action until then may be noise.

The 200-day MA is 2060. The 50-week MA is 2061. Keystone's critical 'cliff' level is the 12-month MA at 2051. The critical levels all encompass the 2050-2061 area. Therefore, bulls are happy above 2061. Bears are not happy unless the SPX goes sub 2050. This information is for educational and entertainment purposes only. Do not invest based on anything you read or view here. Consult your financial advisor before making any investment decision.

AAPL Apple Daily Chart Earnings Today H&S

The quadruple top in Apple was interesting this year. The red lines show the neggie d that formed across all indicators at the July top, as Keystone pointed out at the time, resulting in the spank down. Price collapsed creating a gap big enough to drive a truck through. The AAPL chart is a mixed bag of slop; the easiest call is more sideways choppiness ahead but there are several key things to watch. Apple reports earnings after the bell so the news can send price violently one way or the other after 4 PM EST today.

After price crashed lower the green lines show the falling wedge, oversold conditions and positive divergence that created the bottom. Interestingly, the RSI and MACD line remained weak and bleak in August and wanted price to come back down after any bounce. Instead, the central bankers started pumping stock markets higher so individual stocks shot higher.

Over the last month the MACD line and RSI remain long and strong wanting to see another price high. The 200-day MA resistance is 120.86 and 122 is uber strong price resistance so this area may serve as a magnet for price perhaps this evening after the earnings report. The histogram stochastics and money flow are negatively diverged over the last month wanting price to trail lower for the days and couple weeks ahead. The conflicting signals promote the idea that price may stagger through 105-122 for the forseeable future.

The blue lines show a developing H&S (head and shoulders) pattern. AAPL will need to finalize the right shoulder perhaps in that 120-123 area. If price loses the 105 level the door will open to 77. Conversely, an inverted H&S vibe is occurring over the last couple months so a breach above the critical 122 R would likely send price up to the gap fill at 127-130. The black circle shows the Death Cross.

Looking at the AAPL weekly chart, the stochastics are long and strong. The 20-week MA is 117.23; watch this number. The 50-week MA s 119.39. The weekly chart is agreeable to further highs in price in the weeks ahead. The monthly chart shows a weak and bleak MACD line and stochastics crossing down into bear territory. So the monthly chart wants lower lows in price on the monthly basis.

Mixing the analysis together and sprinkling some magic dust on it all, AAPL will likely keep trading choppy sideways, a move to 120-122 is in play. If 122 is taken out then 127-130 occurs where price will top out. Apple will likely chop sideways into and through November eking out higher highs on the weekly basis. However, AAPL would be expected to top out and roll over to the downside again starting say in mid or late November or early December and lower prices would be expected moving into 2016, likely to come down and test the 105 neckline of the H&S say in December or January. 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 10/28/15 at 9:08 PM EST: Yesterday, Apple earnings are a beat but iPhones a tad light of the 48.5 million expected. AAPL was up +2% in the afterhours trading, then went negative then settled about +1.7% higher. Today, Wednesday, AAPL gains +4.1% to 119.27 bumping its head against the 50-week MA resistance at 119.47

Monday, October 26, 2015

SPX S&P 500 Daily Chart Central Banker Party

The bulls are beating the bears over the head with the central banker baseball bat. The party started on Wednesday evening, 10/14/15, when Jon HIlsenrath at the WSJ released an article saying the Fed will likely not move on the rate hike until 2016. Many believe Hilsenrath has the inside track at the Fed so the S&P futures launched 15 handles in a heartbeat. This led to the pop in stocks (blue circle) when equities were actually beginning to roll over. Another central banker stick save. That joy continued with Fed members injecting happy dovish talk.

Then ECB President Draghi fired his money bazooka on Thursday, 10/22/15,  to keep the easy money booze flowing (brown circle). The tech big-wigs AMZN, MSFT and GOOGL had a trifecta of earnings euphoria on Thursday evening leading into Friday morning but the biggie is the PBOC cutting rates and bank triple R's on Friday morning (purple circle). The SPX jumps above the 200-day MA at 2060. The central bankers are powerful. After a few days of the pumping, the charts price-in the new information.

Price has not violated the upper band (pink) so the 2098 is in play. The SPX filled the gap at 2075-ish. There is a gap above at 2096-ish in play. The red lines show negative divergence. The stochastics are overbot wanting to see price drop. Money flow is developing into a weak and bleak profile. The RSI, however, never became overbot so that is still in play to help the bulls. The MACD line is long and strong (green) so price will want to come back up to the current levels or higher after any pull back.

The full moon peaks in the morning at 8 AM EST (in Pennsylvania as this is typed the full moon is out in its full glory lighting up the ground like daylight) and stocks are typically buoyant through the full moon each month. UPS earnings are out on Tuesday morning and will set the market mood. Consumer Confidence is a very important data point each month. Tomorrow is a key day and the behavior through the FOMC decision on Wednesday afternoon will tell a lot chart-wise.

The projection now would be down then back up then down for a more sustainable down move for several days, however, the weekly chart has upside juice so on a weekly basis price will want to come back up again. Thus, say a couple days of weakness, price may back kiss the 200-day MA at 2060, then back up to 2080-ish, perhaps to the 2096-2098 area, for a day or three, then price should roll over, it all depends on when the MACD line rolls over to top things out. The monthly chart remains weak. The 50-week MA is 2061.

So after some sideways jog action, price should come back up again on a weekly basis, so the 2096-2030 range has to remain in play for November, however, with the weak monthly chart price would be expected to roll over again for another strong move lower on the monthly basis for lower lows. This scenario is in direct contrast to the consensus that expects a year end rally. It may seem like the year end rally is in play say in early or mid-November, but instead the bulls will receive a Christmas stocking filled with coal.

When a month is up wall to wall like this month, the last couple days or so typically finish weak which would be Wed-Friday. 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, October 21, 2015

SPX S&P 500 2-Hour Chart Overbot Rising Wedge Negative Divergence

The central banker pump from late last week is pricing into charts. The 2-hour is cooked as shown by the red rising wedge, ovebot conditions and the negative divergence (red lines) across all indicators. A drop in price is anticipated due to the neggie d.

Price has violated the upper standard deviation band (pink) so a move back to the middle band at 2021 and rising remains on the table. The SPX daily chart is negatively diverged across its indicators except for the MACD line. Therefore, stocks should receive a spank down in the near term say today into tomorrow due to the 2-hour above, but should bounce again and come back up to current levels to satisfy the long and strong MACD on the daily chart. At that time the near-term top for stocks may be in. Equities are chopping along this week. 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.

Sunday, October 18, 2015

SPX S&P 500 Support, Resistance (S/R), Moving Averages and Other Important Levels for Trading the Week of 10/19/15

SPX (S&P 500) support, resistance (S/R), moving averages and other important levels are provided for trading the week of 10/19/15. 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. The closing low for this year is 1867.61 on 8/25/15.

For Monday, with the SPX starting at 2033, the bulls only need one point, to touch the 2034 handle and bingo, the SPX will accelerate higher. The bears need to push under 2020 to accelerate the downside. A move through 2021-2033 is sideways action for Monday.

Last week, price came up to fill a gap at 2033. There are gaps at 2077-2080 and 2096-2098. The SPX hourly and minute charts are rolling over with neggie d so market weakness is expected. The daily chart is mixed with some neggie d that jives with the weakness in the VST on the hourly and minute charts, but also wants to see a higher high in price after the pull back occurs so this higher high in price may occur on Tuesday or Wednesday. At that price high for the SPX the daily chart should roll over with neggie d across all indicators and perhaps more sustainable selling begins.

The CPCE and CPC put/call ratios are dropping into the complacency zone again. When central bankers are pumping liquidity and the Fed does not look like it wants to raise rates ever, stocks move higher and traders become relaxed since the central bankers will support stocks, and their wealthy friends, forever. This complacency indicates market topping behavior. The CBOE Skew prints an uber high 150-ish that signals a significant market top at hand to occur at anytime. This jives with the put/calls dropping. Thus, mixing all of the above together and sprinkling some magic dust on it all says stocks should top out probably by mid-week.

There are strong resistance gauntlets above at 2038-2041, then 2045-2050, then 2056-2061. Lump them together and call it 2038-2061; the war zone. You can watch the small battles at these levels but the bigger picture says bulls will rally into year end above 2061 but bears will growl to finish the year if price stays under 2038. Bears need to push under 2032 support, then 2019 to get the ball rolling down hill. As the previous SPX monthly chart and th elist below highlights, the 10 and 12-month MA's are at 2045-2048 and this level is uber important and will dictate the path into the end of the year as well as if stocks are in a cyclical bear or bull (the SPX is under the 12-month MA at 2045 signaling an ongoing cyclical bear market).

Keep referencing the 200 EMA on the 60-mintue chart at 1981 that currently signals bullish markets for the hours and days ahead and the 8/34 MA cross on the 30-minute chart which currently signals bullish markets for the hours ahead. Bears need the negative 8/34 MA cross on the 30-minute chart and for price to make its way back down and fail at 1981.

Looking at the big picture the strongest S/R is 2099-2103, 2091, 2086, 2081, 2079, 2076, 2071, 2067, 2056-2061, 2045-2050, 2038-2041, 2032, 2019, 2011, 2002, 1985-1988, 1978, 1973, 1965, 961, 1951, 1942, 1924, 1897, 1884, 1878, 1874, 1872, 1848, 1841, 1808 and 1803.

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
2067
2065
2063
2061
2059.96 (150-day MA; the Slope is a Keystone Cyclical Signal)
2059.90 (200-day MA)
2059.61 (50-week MA)
2058.90 Trading for 2015 Begins Here
2057
2056 (11/18/14 Intraday High: 2056.08)
2053
2050
2049
2048.25 (12-month MA; a Keystone Cyclical Signal) (the cliff)
2046 (11/13/14 Intraday High: 2046.18)
2045.25 (10-month MA)
2041
2040.92 (100-day MA)
2040
2038.09 (20-week MA)
2038
2034
2033.54 Previous Week’s High
2033.54 Friday HOD
2033.11 Friday Close – Monday Starts Here
2032
2030
2024
2023
2021
2020.46 Friday LOD
2019 (9/19/14 Intraday High: 2019.26)
2018
2011 (9/18/14 Closing High: 2011.36) (9/4/14 Intraday High: 2011.17)
2007.17 (20-month MA)
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
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)
1984.67 (50-day MA)
1983
1982
1981 (2/2/15 Intraday Low: 1980.90)
1980.89 (200 EMA on 60-Minute Chart a Keystone Market Turn Signal)
1980
1979
1978.14 (100-week MA)
1978
1976
1973
1970
1968 (6/24/14 Intraday Top: 1968.17)
1966.83 (20-day MA)
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
1943
1942
1937
1936
1931
1929
1928
1924 (5/30/14 Intraday Top: 1924.03) (5/13/14 Closing High: 1923.57)
1920.03 October Begins Here
1920
1917
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)
1891 (4/2/14 Closing High: 1890.90)
1990.73 Previous Week’s Low
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
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
1854.64 (150-week MA)
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
1845
1843
1842
1841
1840
1839
1835
1831
1828
1827

SPX S&P 500 30-Minute Chart 8/34 MA Cross

A favorite short term indicator for market direction is the 8/34 MA cross on the 30-minute. The 8 MA is above the 34 MA signaling bullish markets for the hours ahead. Bears got nothing unless they create a negative 8/34 cross. The chart is negatively diverged so price should receive a spank down in this 30-minute time frame. 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 60-Minute Chart 200 EMA Cross

As Keystone highlighted at the time, the move up through the 200 EMA was a fatal blow for bears. The SPX is above the 200 EMA at 1981 signaling bullish markets for the hours and days ahead. Price needs to back test the 200 EMA to show it respect. It has been showing it disrespect so a move lower should be in order very soon. Indicators are negatively diverged with overbot stochastics wanting to see a spankdown in price in this one-hour time frame. Bears got nothing unless they can move the SPX under 1981. 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

We watched the 2-hour chart top out last week waiting for that MACDline to roll over with a new high in price which occur so a spank down takes place. The bears are high-fiving each other and popping champagne corks as stocks begin selling off but on last Wednesday evening the short-sellers were frantically trying to put the corks back in the bottles since the celebration to the downside abruptly ended. Jon Hilsenrath, who many believe to have an inside track into Fed thinking, releases an article at the WSJ web site that says the first rate hike will not take place until into 2016. Bingo.

Bulls begin buying futures with reckless abandon since Hilsenrath provided the all-clear signal. S&P futures rocketed nearly 15 handles higher within about one hour's time after the article was released. Other central banker dovish talk followed from the PBOC, BOJ, and Fed, and even ECB's Nowotny hinting at more QE, so the bull party was in full swing. The central bankers are the market. You have to be blind to not see this occur time and time again.

After the central bankers goose markets a small amount of time is needed so the charts can build in the new information. Of course price sky rockets on Thursday and Friday last week ignoring the prior negative divergence, however, the new highs are met with more neggie d. The MACD line and money flow is trying to squeeze out a tiny bit more juice for a couple hours but it looks good for a top to occur as the new week of trading is beginning. This would jive with the put/call and Skew charts calling for a move lower in stocks, however, the SPX daily chart wants to see another high after weakness.

Thus, perhaps markets sell off on Monday maybe Tuesday, then recover Tuesday Wednesday, then a more significant near term top occurs say mid-week which would receive the negative divergence blessing from the daily chart. The 2-hour chart would likely be in a downtrend a couple days from now. Ths scenario remains in line with the low put/call ratios and high Skew that want to see a top in stocks this week or very very soon.

Price is back at the top standard deviation band so a move back to the middle band at 2013 is on the table. 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

The SPX monthly chart was a handy tool for calling the top in the stock market this year. The overbot indicators, red rising wedge pattern and universal negative divergence predicted a smack down which occurs. The recovery is a dead cat bounce since the indicators did not display any positive divergence; they are weak and bleak wanting to see more lower lows in price. The stoch's are crossing down through 50% into bear territory. The RSI bounced from 50% which gave the bulls the rally and sign of life.

The chart is weak and points to lots of weakness ahead for months perhaps a couple years or more. The 18-year stock cycle is in a secular bear from 2000 to 2018 so it would not be surprising to see the stock market down 3 of the next 4 years. The collapses from rising wedges can be quite dramatic. That initial drop on the chart is paltry for a rising wedge. Pulling numbers out of thin air, the rising wedge should send price down to the 1400-1600 level without much effort. Perhaps this dire outcome is on tap for 2016 and 2017?

The SPX is at 2033. The critical 10-month MA is 2045.25 and 12-month MA is 2048.25. The 10-month is followed closely by old time traders that control millions of shares daily. Many algo's use both moving averages in their models providing more street cred. The 12-month is Keystone's "cliff" level that tells you if the stock market is in a cyclical bull market or cyclical bear. Price is under the 12-mth MA at 2048 so the stock market is in a cyclical bear market pattern.

The importance of this 2045-2048 resistance level cannot be overstated. If the SPX moves above 2048, stocks will likely rally into year end. If the SPX remains under 2045, the bulls got nothing and a new leg down for stocks will begin. The monthly chart is ugly and provides no compelling reason to own the stock market on the long side in the intermediate and long term multi-month basis going forward. This information is for educational and entertainment purposes only. Do not invest based on anything you read or view here. Consult your financial advisor before making any investment decision.

SPX S&P 500 Daily Chart W Pattern Bottom Gaps Negative Divergence Developing

The bulls rally last week on more central banker easy money talk. Price came up to fill the 2033 gap. There are gaps at 2077-2080 and 2096-2097. The W pattern bottom (purple) is a powerful force and a W has the most strength the farthest it is under the under 50 and 200-day MA's so the bulls have a feather in their caps. If the W bottom trend line is 1880 and upper at 1990, that is 110 handles, then the upside target is 2100 which is the upper gap.

The other day, Keystone posted the daily and another higher high in price was predicted due to the long and strong MACD line and it occurs. However, now the money flow is long and strong, RSI is trying to sneak higher and the MACD line remains long and strong; all bullish. Charts are adjusting after the happy central banker talk last week that created the rally spike. Price may need a day or three, one to three candlesticks, to roll the MACD line over into neggie d to confirm the near-term top. 

So the neggie d on the histogram and stochastics should spank price lower but then price will come back up. At that time say Tuesday or Wednesday, perhaps the indicators will all be neggie d and create a spankdown and weakness ahead. The CPCE and CPC put/call ratios are dropping and coming into the complacency range where a near term stock market top would be expected. The CBOE Skew prints an uber high signaling a very significant top at hand.

The 2038-2061 range is an uber strong resistance gauntlet. Market bears remain in business under 2038. A bloody fight occurs between 2038 and 2061. Bulls win big above 2061 and the road to 2080 then 2100 will quickly follow. Bears need to push price under strong 2032 support then under 2019 to begin an acceleration lower. 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 Put/Call Ratio Daily Chart

The CPCE put/call ratio is dropping down towards complacency again. Ditto the CPC. Why wouldn't they after the central banker dovish talk late last week and market participants realizing the Federal Reserve will not raise rates until well into 2016. That means the easy money Keynesian policies continue and the liquidity will keep pumping stocks higher. It is shameful what the Fed and other global central bankers are doing to the economy and markets. The separation of rich and poor in America is at the greatest divide in 50 years.

The lower CPCE is consistent with trader complacency and where a top occurs in the stock market. A top in equities is likely at any time during the week ahead. Stocks will sell off until the put/call rises to the green circles. If stocks continue sneaking higher early in the week the put/call will likely drop further only sealing the fate more that a near-term stock market top is at hand.

Remember to respect the CBOE SKEW chart posted the other day. Scroll back to review that chart or type 'SKEW' in the search box at the right margin to bring up prior charts. The elevated Skew indicates that a significant market top is at hand anytime forward. This information is for educational and entertainment purposes only. Do not invest based on anything you read or view here. Consult your financial advisor before making any investment decision.

AMZN Amazon Weekly and Monthly Charts Rising Wedges Overbot Negative Divergence Upper Band Violation


Traders continue to buy Amazon sending it to record highs even though the company is so huge with hands in so many pies that you do not fully know what is behind the curtain. CEO Jeff Bezos does not do any interviews and does not speak often. The Amazon low-cost model is killing physical retailers such as WMT that lowers guidance last week and Wal-Mart stock collapses. Comically, retailers will have to keep cutting costs to compete with AMZN and Amazon is not profitable (they are all cutting each other's throats). UPS is raising shipping rates since more deliveries are going to rural areas. This is Amazon's tentacles spreading out into the countryside all across America and elsewhere.

The party is coming to an end at Amazon and the finish will likely be very ugly over the coming couple years. The rising wedge patterns, overbot conditions and negative divergence point towards turbulence ahead. Price has violated the upper standard deviation band on the monthly so a move back down to the middle band at 387 and rising is on the table and also the lower band.


The blue circles on the monthly chart for 2014 shows steady distribution taking place all year long; the smart money is exiting. Selling volume is stronger than the previous month that experienced a higher high in price. The rocket launch this year is surprising and since a lot of distribution had taken place last year many investors this year may be Joe Retail chasing the move higher. These retail investors thinking Amazon will be a great stock to hold will serve as the bag holders.


The weekly chart shows universal neggie d (red lines) so a spank down is needed now and will likely occur this coming week. The weekly chart is uninterested in seeing new highs in price again since all the indicators turn neggie d. On the monthly chart, the RSI, stochastics and money flow are cooked. Note the long and strong behavior with the MACD line and histogram. Both want to see a higher high in price after any pull back occurs and at that time they will likely roll over into negative divergence.


Marrying this thought with the weak weekly chart, the prognostication would be for price to sell off starting this coming week and for a week or three, then price will recover to satisfy the monthly chart coming back up to the existing highs again. At that time the monthly chart will likely be completely negatively diverged signaling a multi-year top in Amazon and the official end of the party. Thus, a significant multi-month and muti-year top is at hand and very likely before year's end. The monthly chart currently shows the October candlestick so November and December will be two more candlesticks and that may be enough to create the neggie d in the MACD.


If nimble, an AMZN short can be brought on now. Keystone has no position in AMZN but may place a short this week.  It is never wise to short a momo stock but the charts are very favorable for bears. Once a pull back occurs there is no point to get greedy since the monthly chart wants another high. So any short will have to be covered and then a big short can be put on when price recovers back to the existing highs as described likely anytime between November and January.


The rally this year follows bull flag patterns the green bull flat taking price to 450 and then morphing into a larger purple bull flat that targets 570 that is attained to satisfy the pattern. Note in 2014 when distribution was taking place the red descending triangle formed a very ominous bearish pattern but the bulls saved the day with the green falling wedge, oversold conditions and possie d that bounced price higher with a rocket launch. 


If you have enjoyed profits on AMZN, now is the time to take the money and run. A long position can be scaled out of over the next three months or simply just ditch the stock now and move on to other trades. You do not want to be buying Amazon long from here on out. It will not be surprising to see AMZN in the 250-380 range next year and well into 2017. CEO Bezos is about to experience a dramatic two years ahead; this is the exact calm before the storm that begins from here forward. Stay away from Amazon stock. Next summer you will look back and thank your lucky stars that you ditched your long position in AMZN this year.


Amazon is one of the FAANG (fang) stocks; FB, AAPL, AMZN, NFLX and GOOGL. One of the fang gang is about to be defanged. These stocks lead the broad market so any weakness in these components is not good for the overall stock market. 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.

VIX Volatility Daily Chart 200-Day MA Cross

The VIX drops below the 200-day MA providing bull fuel for the stock market and signaling the all clear for bulilish markets ahead. Volatility moves inversely to the stock market so bulls want lower vol and bears want higher vol. The cross below the 200-day MA at 16.65 is a serious win for bulls and punch in the face to bears. Bears got nothing unless they can push the VIX back above 16.65.

The Keybot the Quant algorithm is tracking the 17.95 level as the bull-bear line in the sand. Thus, if VIX stays under 16.65, the bulls are on easy street sipping Fed wine and enjoying a robust stock market rally. Bears fight back and will stop the stock market rally and create selling pressure if VIX moves above 16.65. If VIX moves above 17.95, the stock market will drop like a stone. 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.

UTIL Utilities Weekly Chart 50-Week MA Cross

The market bulls score a big victory last week pushing utilities above the critical 50-week MA. UTIL is also above its closing price 15 weeks ago and in a weekly uptrend another bullish indication for the equity market. Both indications point to a happy ending for the year. However, UTIL performed the same move in August only to collapse so that fractal may play out again.

Feb-Mar was the first sign of trouble when price fell below the price from 15 weeks prior. Note how UTIL danced along the 50-week MA from March to May. Keystone calls the 50-week moving average the trap-door and this developing drama was described in real time back then. The failure of the 50-week MA was a very bearish development and coincided with the top in the stock market. Stocks then took a few more weeks before crashing in August.


So UTIL 589.41 is an immensely important number going forward. The stock market will likely finish the year in rally mode if UTIL stays above 590. The stock market will stumble lower into year end if UTIL loses the 50-week MA. The 15-week lookback comparison number is the neon circle at 570-ish. The stock market will crumble this week if UTIL drops under 570 but price is comfortably above. Note that 3 weeks from now the 15-week lookback numbers climb towards the August highs at 605-ish. Thus, in November and December, UTIL will have to remain elevated and keep moving higher above 600 or there will be further stock market trouble.


Stock market bulls will throw confetti and buy stocks with UTIL above the 50-week MA but bears will growl loudly again if UTIL fails at 589.41. 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, October 16, 2015

S&P 500 Futures Catapult Higher on Delay of Federal Reserve Rate Hike Unitl 2016 and Other Central Banker Pumping

The stock market dips are always saved by the central bankers; at least since 2009 when the Fed began pumping the markets with easy money. Several times over the last few years, the markets were stick-saved by central banker collusion. The two-day stock market rally began directly as a result of the WSJ article by Jon Hilsenrath. This is not the first time that a Hilsenrath article has created a stock market rally. Many market participants consider Hilsenrath to be a mouth piece of the Fed so when he says the first rate hike is pushed into 2016, global traders immediately hit the buy button in the futures. On Wednesday evening, the S&P futures popped nearly 15 handles after the article was released.

This set an optimistic tone for Thursday and Asia and Europe run with the ball fueled by talk that the PBOC (China's central bank), the BOJ (Japan's central bank) and the ECB (Europe's central bank) will continue providing stimulus. The easy money party kicked into high gear. Traders are drinking Fed wine and injecting central banker heroin into their veins buying any stock with a heartbeat. The ramp higher in the futures is so obscene that even Caligula would blush.

For good measure, ECB's Nowotny says more QE is on the way and Fed's Dudley chimes in with dovish commentary hinting that the rate hike will likely keep slipping into the future. The central bankers are the market. If you do not understand this factor during the last few years, then you simply are not paying attention. The two-day "Hilsenrath Rally" runs from 1982 to 2027 a 45-handle gain of +2.3%. 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: The futures chart is courtesy of Ino.com a very useful site and annotated by Keystone.

Thursday, October 15, 2015

USD US Dollar Index Daily Chart Death Cross and XEU Euro Daily Chart Golden Cross


The clock just fell off the wall in ECB President Draghi's office. Europe began an obscene Keynesian quantitative easing program this year to pump their stock markets higher. The ECB QE is intended to push the euro lower so manufacturing and export industries receive a boost and help jump start the euro zone economy. With the Volkswagen scandal ongoing, exports need a shot in the arm especially Germany which is Europe's number one exporter. The lower US dollar index, however, due to the Federal Reserve not hiking rates until well into 2016, sends the euro higher causing Draghi many sleepless nights.

The USD prints a death cross today with the 50-day MA stabbing down through the 200-day MA which forecasts a lower dollar ahead. Typically, since it takes many weeks and months to create a negative cross, price will bounce once the cross occurs. Thus, the dollar may bounce from that lower channel line. The death cross indicates a lower dollar is expected for the weeks and months ahead as long as the cross remains.


Conversely, since the US dollar index and euro currency baskets are weighted 40% or more with each other's currency, the dollar and euro move inverse to each other as the charts display. A higher dollar results in a lower euro and a lower dollar results in a higher euro and visa versa.


Therefore, the euro prints a golden cross with the 50-day MA moving up through the 200-day MA. Typically, since it takes many weeks and months to create a positive cross, price will retreat once the cross occurs. Thus, the euro may pull back down from that upper channel line. The golden cross indicates a higher euro is expected for the weeks and months ahead as long as the cross remains. If Draghi becomes more aggressive with QE to push the euro lower, the US dollar index will move 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.

Keybot the Quant Turns Bullish

Keybot the Quant algorithm flips back to the bull side today at SPX 2011. The markets are pumped higher with utilities, financials and lower volatility. Watch XLF 23.35 closely after tomorrow's opening bell. Stay alert for a whipsaw back to the short side. More information is found at Keybot's site;

Keybot the Quant

KSS Kohl's Daily Chart Oversold Falling Wedge Positive Divergence

Retailer Kohl's is a hated stock. The doorman at the fancy hotel waved Keystone down this morning and said he bet the farm on the short side with KSS. The guy selling newspapers chimed in and said Kohl's is guaranteed to move lower. The blood is in the streets. KSS has collapsed from 79 to 44 during the last six months an epic crash of -44%. Price is at multi-year lows. The baby is thrown out with the bathwater. Frustrated long traders say they will never own this stock again as long as they shall live.

The chart clearly shows positive divergence and this already created the first pop off the bottom. The money flow remained weak and bleak (red line) wanting another lower low in price which occurs now. Price prints a lower low and possie d is now in place for all inidicators. The falling wedge and indicators coming off oversold levels are also bullish indications. The weekly chart is also positively diverged although you have to keep an eye on the MACD now trying to base. KSS may have to jog at the current levels for another month but the charts are very attractive for a bottom and the long beating of KSS appears to be ending.

Keystone just bot KSS opening a new long position. The door remains open for another touch of the lower standard deviation band but price should bottom in the green circle and bounce strongly due to the possie d. Lots of shorts running for their lives may create a big short-covering rally. Keystone will likely add on weakness. Kohl's should finally receive some love going forward; perhaps KSS receives a kiss. As with all knife-catches this is an extremely dangerous and speculative trade only for those willing to lose their money. 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.

CBOE Skew and SPX S&P 500 Daily Charts


The CBOE Skew is elevated again. On the daily basis, the red circles show tops in the stock market so it appears prudent to tread softly on the long side going forward while bringing on some shorts and buying put protection. The 150 level is off the charts. The candlestick chart shows a long and strong MACD line that would like to see another price high but the Skew readings are ominous.

The Skew should be respected since its track record is 100% for identifying the tops as the charts indicate. The Skew signals that the stock market will likely print a top any day forward. This information is for educational and entertainment purposes only. Do not invest based on anything you read or view here. Consult your financial advisor before making any investment decision.

Note: Chart is courtesy of Big Charts annotated by Keystone.

CBOE Skew and SPX Weekly Charts


The CBOE Skew is elevated again. On the weekly basis, the red circles show tops in the stock market so it appears prudent to tread softly on the long side going forward while bringing on some shorts and buying put protection. The candlestick chart shows price violating the lower standard deviation band so a touch of the middle band, the 20-week MA, at 2036 and dropping, is on the table. The indicators are a mixed bag hinting at sideways action ahead.

The Skew should be respected since its track record is 100% for identifying the tops as the charts indicate. The Skew signals that the stock market will likely print a top this month any time forward. This information is for educational and entertainment purposes only. Do not invest based on anything you read or view here. Consult your financial advisor before making any investment decision.

Note: Chart is courtesy of Big Charts annotated by Keystone.

Silver COT (Commitments of Traders) and Daily Charts


The green circles show the tops in silver prices and the red circles show the bottoms. The low bars on the COT hinted that bottoms were in play for late summer and after price collapsed during September. The positive divergence and oversold conditions shown on the candlestick chart forecasted a rally which occurred. The inverted H&S pattern (pink) shows the head at 14, neckline at 15.5, so upside target is 17 after price broke out above the neck line.

The blue upward-sloping channel is in play. Silver has spiked higher in recent days as the dollar drops. The COT bars continue to expand showing that a rally is in play, hoiwever , the COT bars are consistent where other tops in silver prices occurred. COT chart information lags. There is likely a near term top soon at hand.


The candlestick chart shows negative divergence (red lines) for the indicators but the MACD line is long and strong wanting another price high after a pull back occurs. Price will need to back kiss the 200-day MA at 15.97. Price has violated the upper standard deviation band so a move back to the middle band, the 20-day MA, at 15.27 and rising, is in play. 

If you missed the rally in silver the charts urge caution against trying to chase the upside now. Silver should receive a pull back in the near term and take a sideways rest but the weekly chart remains encouraging for more upside. Perhaps silver will stutter sideways at the 200-day MA before plotting another move higher. Silver may move sideways from here with an ongoing upward bias. Price likely needs a rest in the near term to follow the pattern shown by the circles. 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: COT chart is provided courtesy of Cot Price Charts which is an excellent site to find all the commodity COT charts. The chart is annotated by Keystone.