Thursday, February 25, 2016

VIX Volatility Daily Chart

The VIX drops to 19.11 a level not seen in almost two months. As volatility drops, the intraday and day to day large point moves should subside. The 200-day MA, now at 18.36, is a key short term signal for markets. Above the 200 bears rule; below the 200-day the bulls rule. Watch this like a hawk over the coming days. Depending on if you are long or short the market, this chart will identify you as either a hero or a zero. If bullish, you want the VIX in the green circle in the right margin. If you are bearish, you want the VIX in the red circle in the right margin. 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 8:39 PM EST Tuesday Evening, 3/1/16: Volatility drops today through 19 then through 18 creating rocket fuel for the stock market. The VIX falls through the 200-day MA at 18.45, closing at 17.70, signaling bullish markets ahead. A back kiss of the 200-day will likely occur. Market bears are toast and the bulls will rally stocks as long as the VIX remains under 18.45. The bears will growl only if the VIX moves above 18.45.

Keybot the Quant Turns Bullish

Keystone's trading algo, Keybot the Quant, flips back to the bull side at SPX 1938 after this morning's opening bell. Pay attention to JJC 23.80 and VIX 19.45 to determine market direction. More information is found at Keybot's site,

Keybot the Quant

Tuesday, February 23, 2016

Keybot the Quant Turns Bearish

Keystone's trading algorithm, Keybot the Quant, flips to the short side this morning at SPX 1930. Equities slid down the rabbit hole after the opening bell. Considering the erratic markets, the algorithm may whipsaw back to the long side tomorrow. Keybot already wants to flip long again and will likely do so if the SPX moves above 1942 on Wednesday. More information is found at Keybot's site;

Keybot the Quant

SPX S&P 500 Daily Chart 'W' Pattern Gaps

There is a lot going on in this spaghetti chart a daily look at the S&P 500. Starting with the blue W pattern bottom, price broke out yesterday which opens the door to the upside target at 2056. Call the base of the W at 1830 ignoring the spike lows, and the breakout line is at the strong support/resistance level at 1942-1943, that is 113 handles difference which targets 2056 (1943+113). A W pattern bottom is one of the strongest chart patterns for a bullish rally. If the W is under both the 50-day and 200-day MA this is typically an extremely strong upside pattern.

The very strong and key S/R is 2061, 2046, 2040, 2032, 2023, 2019, 2011, 2002, 1985-1988, 1978, 1973, 1965, 1961, 1951, 1942-1943, 1924, 1897, 1884, 1878, 1874, 1872 and 1848.

The 50-day MA is 1952 and falling is so close that you would think that price wants to at least tap it to say hello. Price violated the lower standard deviation line (pink) seven days ago so the middle and perhaps upper band are on the table. The SPX immediately spikes up to the middle band, which is also the 20-day MA at 1895, and kept on going. Price is in the neighborhood of the upper band at 1960 so it would be prudent to say hello to that level. If the upper band is violated, the SPX will want to move back down to the middle band.

There are four gaps that need filled up above due to the drastic crash in stocks to begin the year. The upper gap is 2065-2070-ish and everything else is buttoned-up above that. So the SPX may desire to fill those gaps and close up all loose ends up top and then begin falling and crashing in earnest again. Interestingly, the W pattern upside target at 2056 is in the neighborhood of the topside gap so 2056-2070 may be an ultimate goal for the SPX during the next few weeks.

The indicators are long and strong (green lines) so higher highs in price are desired after any pullbacks should occur. The stochatics are overbot and the money flow is negatively diverged over the last three days so these two may create temporary weakness in stocks. S&P futures are marginally lower this morning as this missive is typed. The indicators point to higher highs for the days ahead but it is never in a straight line, there would be fits and starts. The 1942-1943 support is uber strong so price will likely back kiss this level a time or two to make sure it has the stones to move higher, otherwise price will collapse from 1942 and seek the 1924 support.

The ADX shows that the downward trend in stocks ongoing since late 2015 is a strong trend downwards (pink box). The black ADX line, however, is dropping and now at 27.50. If the ADX line drops under 25-ish the downtrend in the stock market is over. Stocks would likely then spend a month or three staggering sideways and resetting to decide on the future path. Note the strong uptrend in September verified by the ADX above 25 but in October the strong uptrend was toast; stocks topped out at Halloween and are lower ever since. If you have large short positions on the market you want to worry if you see the ADX dropping under 25 and down to 20 since stocks are going to float higher.

Use the key 1942-1943 support as a guide going forward. Bulls win big above 1943. Bears win big under 1942. Key resistance above is 1951-1952 (confluence of the 50-day MA at 1952 and price resistance) and 1960-1961 (confluence of the upper standard deviation band and price resistance). For the bears, if 1942 fails, price will want to return to 1924 for a test of support. 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 5:41 AM EST: The SPX loses the 1942 support and plummets to the 1924 support discussed above. Price staggered along the important 1924 level all day long breaking lower at the closing bell ending at 1921. Detailed support/resistance levels in this area are; 1942-1943, 1936-1937, 1928, 1924, 1920, 1917, 1912, 1901, 1897. With the 1924 ruptured, price would like to test the 1897 support but may bounce before then from one of the other support levels. The low CPCE put/call ratio representing complacency and a near-term market top comes to be.

CPCE Put/Call Ratio Daily Chart

The CPCE drops to 0.58 indicating complacency and lack of fear when markets top out. The low CPCE's represent complacency and when markets top while the higher readings represent panic and fear when market bottoms occur. The CPC put/call is at 0.94 not exhibiting a low like the chart above, thus, a day or three may occur with buoyancy in stocks with the CPC drops. It does not have to. The stock market can pull back immediately due to the 0.58 reading above.

Stocks should top out this week according to the complacency occurring in the red circle above. Stocks will likely print a near-term top at anytime forward. The SPX is at 1946 with the 50-day MA resistance at 1952; perhaps price will kiss the 50 and reverse. Watch the CPC to see if it comes down to verify the CPCE complacency. 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, February 21, 2016

USD US Dollar Index Monthly Chart

Keystone pointed out the top in the USD four months ago due to the negative divergence and the dollar drops as expected. The MACD cross turns negative and the indicators are weak indicating that lower lows are likely. The question is how low and for how long.

On 3/10/16, ECB President Draghi plans on firing a new QE money bazooka so the euro should drop. It will actually drop ahead of time going into the meeting as traders position themselves. A lower euro will boost the dollar. Thus, the dollar may stay weak and weaken more over the next week or two (which will boost commodity stocks) but as March begins traders will be less enthusiastic about further drops in the dollar.

The central bankers have destroyed markets over the last seven years with their obscene Keynesian money printing. No one truly knows what any asset is worth anymore. Simply looking at the charts there appears to be a whole lot of sideways ahead for the dollar, euro and Treasury yields. Sideways action will frustrate both bulls and bears in all asset classes. The 102 area needs respected since once 98 was breached, 8's typically lead to 2's, so keep that in the back of the mind. If Draghi surprises with huge shock and awe, the euro may plummet in March and that will send the dollar to 102 but this scenario is not a projection and if 102 would occur a retracement back down in quick order would be expected.

The US dollar may weaken further over the coming week or so but will probably begin catching a bid as traders look forward to Draghi's money bazooka on 3/10/16. The dollar should move sideways going forward, sideways with a downward bias for the months ahead. The majority of investors, however, expect big upside in the dollar. Any pop in the dollar in March, maybe into April, due to the ECB's actions may be short-lived. At summer time, the dollar may be hanging around 95-ish depending on how the ECB stimulus is received.

Note the blue sideways symmetrical triangle that Keystone described over the last few years. The vertical side of the triangle is 16 handles with the breakout at 81, thus, 97 is the target which was achieved satisfying the pattern. Price collapsed out the bottom of the triangle in 2011 but this is typical for sideways triangles. At the halfway or two-thirds point, price may exit the triangle and this is typically a fake-out move with price returning inside the triangle and exiting the opposite side (this works in either direction). The dollar returned inside of the triangle and then popped out the top in 2014 as would be expected. 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, February 17, 2016

SPX S&P 500 60-Minute Chart 200 EMA Cross

An important cross occurs this morning. The 200 EMA (at 1908) on the SPX 60-minute chart is a key short term signal for the stock market and price moving above says equities will be bullish for the hours and days ahead. The point where price crosses above the blue line represents where the bulls punched the bears in the face. Note how the bulls attempted a rally in early February but were slapped down by the bears.

The market bears must slap price back under 1908 today or tomorrow to prevent the positive cross. If so, the bears will celebrate with wine and song. The bulls need to keep price above 1908 since it signals that the upside party in stocks has only just begun. Watch the 200 EMA on the 60-minute at 1908 like a hawk; it tells you near term direction for stocks.

The indicators are long and strong but beginning to hint at a roll over in this time frame. The 2-hour chart is long and strong. Thus, stocks may peak in the hour time frame say this afternoon and travel lower but the 2-hour chart should bring prices back up tomorrow. See the 2-hour chart for more technical analysis. That 1908 level says a lot so keep an eye on it. 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 Sunday Morning, 2/21/16: The SPX closes Friday at 1918 remaining above the 200 EMA on the 60-minute at 1909.92, call it 1910. Watch this 1910 level like a hawk; it is super critical.

SPX S&P 500 2-Hour Chart

The 2-hour chart is sporitng a potential W pattern bottom. The blue W would target 1930-ish. Key S/R for the S&P 500 is 1978, 1973, 1965, 1961, 1951, 1942-1943, 1924, 1897, 1884, 1878, 1874 and 1872. Price is at 1918 teasing towards the 1924 resistance for a test.

The brown lines show the inverted H&S pattern from a January into early this month that failed. Price broke above the 1905-ish neck line but collapsed back below, then back above for another breakout, then back below, and then failed to hold the support at 1875-ish and collapsed. The inverted H&S was nullified. The SPX then forms the W pattern which is a bullish pattern.

The indicators are long and strong except for the stochastics that are overbot and wanting price to pull back for a rest. The other indicators want price to make more highs after any pull back occurs in this 2-hour time frame. The RSI has not reached overbot territory as yet so that is on the table. It will likely take from 2 to 4 candlesticks for the indicators to roll over with neggie d as price squeezes out new highs which represents 4 to 8 hours of trading time, at a minimum, which is well into tomorrow for the potential market top to set up.

Price violated the lower standard deviation band (pink) so a move back to the middle band and the upper band is on the table and voila, in a heartbeat, both occur. Price has now violated the upper band so a move back to the middle band, the 20-day MA at 1863, and rising, is on the table.

The W pattern target and the important resistance levels are in the 1924-1942 range so this may be the target in the near term for the top. The NYMO is up to +30 and may move above +40 today to indicate that a market top is at hand so things are coming together. As a guess, the stock market may top out anytime between Thursday and Monday. Each passing hour provides new information to hone the analysis. 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 8:30 AM EST: The SPX prints a HOD at 1931 and closes at 1927. Price took out the strong 1924 resistance which is now support. The 1942-1943 serves as overhead resistance.

NYMO McClellan Oscillator Daily Chart

NYMO is up to 30 so check it tonight (it is an EOD (end of day) number) to see if it prints above the important +40 level to indicate a market top at hand. Stocks can still play around at elevated levels for four or five days but a move above +40 will set the wheels in motion for a stock market top either later this week or next week. Keep an eye on it. 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 8:15 PM EST Wednesday Evening: The NYMO spikes higher as stocks rally printing 62.06 above all the tops shown in the chart above except for last October. A near-term market top is at hand and will occur any day forward. Note the last couple tops were a down-up-down jog move. So markets may sell off tomorrow or for a day or so, then recover to print new highs in the following day or two and then collapse lower. The other alternative is that stocks simply begin selling off from here beginning tomorrow or Friday. At any rate, the NYMO above 62 tells  you that you do not want to be putting long trades on now; it is risky chasing stocks higher since there is plenty of downside now on the table.

Monday, February 15, 2016

SPS S&P 500 30-Minute Chart

The brown lines show the key S/R at 1942-1943, 1924, 1897, 1884, 1878, 1874, 1872, 1848, 1841 and 1808. The overhead resistance at 1872-1874 and wider at 1872-1878 is a serious ceiling for price. Market bulls have their work cut out for them to bust up through that tight resistance cluster. The 20-day MA  resistance is at 1884-1885. Thus, you can group the price resistance levels and 20-day MA together for a 1872-1885 resistance gauntlet; bulls win big if they can break up through. Bears are okay if the 1872-1885 ceiling holds this week. Note how price danced to and fro above and below the 1848 level last week; watch this level closely as the days and weeks play out. This information is for educational and entertainment purposes only. Do not invest based on anything you read or view here. Consult your financial advisor before making any investment decision.

SPX S&P 500 Daily Chart

The green lines show the falling wedge pattern for price (bullish) and positive divergence with the indicators (bullish). Price launched on Friday receiving the boost from the possie d. Price has violated the bottom standard deviation band so a move back to the middle band at 1884-1885 (also the 20-day MA) is in play. The brown lines show the key S/R at 1942-1943, 1924, 1897, 1884, 1878, 1874, 1872, 1848, 1841, 1808, 1803 and 1800. 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 Support, Resistance, Moving Averages and Other Important Levels for Trading the Week of 2/16/16

SPX (S&P 500) support, resistance (S/R), moving averages and other important levels are provided for the holiday-shortened trading week of 2/16/16. Levels shown in bold are strong resistance and support. Bold and underlined levels are very strong and important S/R. For 2016, the intraday high for the year is 2043.94 on 1/4/16 and the closing high for this year is 2016.71 on 1/5/16. For 2016, the intraday low for the year is 1810.10 on 8/11/16 and the closing low thus far for the year is 1829.08.The intraday low in 2015 was 1867.01 on 8/24/15 and closing low for 2015 is 1867.61 on 8/25/15. 

For Tuesday, 2/18/16, with the SPX starting at 1865, having closed at the highs on Friday, the bulls need any tinge of green in the S&P futures and the SPX will jump several handles higher after the opening bell. Markets are closed today for the Presidents Day holiday but S&P futures were trading up +28 which would send the SPX higher to test the 1878, 1884 and 1897 resistance levels if the futures remain happy. The bears need to push the SPX under 1833 to accelerate the downside. A move through 1834-1864 is sideways action for Tuesday.

There is an air-pocket between 1872 and 1848 and price sits in the middle in no mans land. The 1867-1868 resistance is strong so bulls got nothing unless they first move above 1868 and then a relief rally will not be possible unless price moves above the 1872-1874 resistance gauntlet. This would immediately target 1878 R then 1884 R.

The bears got nothing unless they can push the SPX under 1848 which will create a drop to 1841 support for a test. Under 1841 is an air pocket down to 1808 with only 1835 offering some support. Note how price plummeted last Thursday, 2/11/16, and bounced off the cluster of market tops from 2013 at 1809-1814. Analysts were touting the importance of the 1812 level (January low) last week. Well, that was breached since the low was 1810. The 1812 is key from the standpoint that it was an intraday market top in December 2013 and intraday low last month but not as important as 1808. As the list shows, 1808 is the far more important and very strong support level and it held since price bounced from 1810. Since price was only 2 points away from 1808, the SPX will very likely come back down again in the future to test 1808 to show this support level the proper amount of respect. If 1808 fails, 1803 support is next then 1800 S then an air pocket to 1783 S.

To begin the week, focus on the 1872-1874 and 1848 levels. Bulls win big above 1872-1874. Bears win big under 1848. It is sideways noise between 1848 and 1872.

Looking at the near-term picture the strongest S/R is 1961, 1951, 1942-1943, 1924, 1897, 1884, 1878, 1874, 1872, 1848, 1841, 1808, 1803 and 1800. Note the air pockets between 1872 and 1848 and between 1841 and 1808.

Note: If the list below displays any blank spaces, view it in a different browser.

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
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)
2071 (11/21/14 Intraday High: 2071.46)
2069
2067
2065
2063
2061
2058
2056 (11/18/14 Intraday High: 2056.08)
2053
2050
2046 (11/13/14 Intraday High: 2046.18)
2044 (12/31/15 Closing High: 2043.94)
2044 (1/4/16 Intraday High for 2016: 2043.94)
2043.94 Trading for 2016 Begins Here
2042
2041.38 (50-week MA)
2040
2038
2034.26 (200-day MA)
2034
2032
2030
2027.39 (12-month MA; a Keystone Cyclical Signal) (the cliff)
2023.95 (20-month MA)
2023
2022
2019 (9/19/14 Intraday High: 2019.26)
2017.53 (10-month MA)
2017(1/5/16 Closing High for 2016: 2016.71)
2012.43 (150-day MA; the Slope is a Keystone Cyclical Signal)
2011 (9/18/14 Closing High: 2011.36) (9/4/14 Intraday High: 2011.17)
2008.93 (100-week MA)
2007 (9/5/14 Closing High: 2007.71)
2005 (8/26/14 Intraday High: 2005.04)
2003.21 (20-week MA)
2003 (8/29/14 Closing High: 2003.37)
2002
2000.34 (100-day MA)
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)
1983
1982
1981 (2/2/15 Intraday Low: 1980.90)
1980
1979
1978
1976
1973
1970
1968 (6/24/14 Intraday Top: 1968.17)
1966.85 (50-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
1940.24 February Begins Here
1937
1936
1931
1928
1924 (5/30/14 Intraday Top: 1924.03) (5/13/14 Closing High: 1923.57)
1920
1917
1914
1912.31 (150-week MA)
1912
1910
1909.18 (200 EMA on 60-Minute Chart a Keystone Market Turn Signal)
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
1884.80 (20-day MA)
1884 (3/21/14 Intraday Top: 1883.97) (3/7/14 Intraday Top: 1883.57)
1882
1881.60 Previous Week’s High
1879
1878 (3/7/14 Closing High: 1878.04)
1877
1874
1873
1872
1870
1868 (8/25/15 Closing Low: 1867.61)
1867 (8/24/15 Intraday Low: 1867.01)
1865
1864.78 Friday HOD
1864.78 Friday Close – Tuesday Starts Here
1862
1859 (1/20/16 Closing Low: 1859.33)
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
1845
1843
1841
1840
1839
1835
1833.40 Friday LOD
1831
1829 (2/11/16 Closing Low for 2016: 1829.08)
1828
1827
1824
1820
1816
1814 (11/29/13 Intraday Top: 1813.55)
1812 (12/9/13 Intraday Top: 1811.52(1/20/16 Intraday Low: 1812.29)
1810.10 Previous Week’s Low
1810 (2/11/16 Intraday Low for 2016: 1810.10)
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
1790.16 (200-week MA)
1788
1785
1783
1782
1781
1777
1775 (10/30/13 Intraday Top: 1775.22)
1772 (10/29/13 Closing Top: 1771.95)
1770
1768
1764.53 (50-month MA)
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)
1722
1720
1711
1710 (8/2/13 Intraday Top: 1709.67)
1709
1708
1706
1703
1700

Bradley Turn Dates 2015-2016

It has been a while since the Bradley turn dates were highlighted with a chart. 
Bradley turns are identified through planetary alignments and typically highlight key turning points for markets. The Bradley's do not predict up or down direction only that a change in trend is likely; sometimes the turn dates result in an acceleration in the same direction. Bradley turns should be considered as a 'shift in market psychology'. A link is provided below for more information. The Bradley turn dates for last year and this year are;

5/10/15; a major Bradley turn date
5/25/15
6/8/15
9/23/15
10/17/15; a major Bradley turn date
-------------------
1/5/16
5/10/16
6/1/16
7/5/16; a major Bradley turn date
9/28/16
11/29/16; a major Bradley turn date

Note how the May and early June cluster identified the top in the stock market which occurred in May 2015. The 9/23/15 turn identified the market bottom. The major turn on 10/17/15 identified another market top. That is why it is worth keeping an eye on the Bradley's.

The first turn of this year on 1/5/16 identifies where a near-term bottom occurred. The next turn is in May and the major turns are July and November. Write them on the calendar or link to the site below. Keep an eye on them. 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.

The Bradley Siderograph and more detailed information is provided at; Bradley Turn Dates

JJG Grains ETN Weekly Chart

Grains are beaten into flour. JJG drops from over 52 to 30, -23%, over the last 20 months. The weekly chart is set up very attractively for a speculative long play. The indicators display universal positive divergence as price prints new lows. In the very near term, however, over the last 6 weeks, the indicators are positively sloped but price has not come down for a matching or lower low so possie d does not officially exist over the last 6 weeks. If price comes down to the green circle and the indicators continue to slope positively it is looking very good for upside ahead.

The standard deviation lines have squeezed in tight (pink arrows) s a big move is about to occur. The chart says it will be up, however, you never know. Keystone is not currently in JJG but will likely buy some this week opening a new long position. Coffee, JO, is also an attractive long play. 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.

JO Coffee ETN Weekly and Daily Charts


Keystone continues to like coffee this year; grains also appear encouraging. JO keeps bouncing due to the positive divergence and then is dragged down with the broad market weakness and broad-based selling. Most every chart you look at paints an unenthusiastic path forward but coffee is a place worth exploring. Something like JO is probably a better place to park money than the consumer staples and utilities sectors. XLP and XLU will get slapped with the rest of the market in the weeks and months ahead but coffee already paid its dues.

The charts are very attractive the green lines showing the possie d that wants to launch price higher. JO can be used as a trading vehicle to make quick gains in short time frames and rotate in and out, or, simply park money in JO and let it sit there all year long. At the end of the year you will likely be happier than if you would let the money remain in the 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.

TNX 10-Year Treasury Note Yield Weekly Chart

Yields have fallen out of bed over the last six weeks the opposite that would be expected since the Federal Reserve has started a rate hike cycle. Comically, the Fed still has four rate hikes on the table for this year while Fed Funds futures now price in zero hikes into early 2017. As stocks tumble lower, investors flock to the perceived safety of Treasuries sending bond and note prices higher and yields lower. The sideways triangles project a downside of about 70 basis points if the lower trend lines fail, which they did, so the target is at 1.50%-ish. Yield came down to 1.52% which is close enough for govt' work.

Yield has violated the lower standard deviation band so a move back to the middle band is on the table going forward. Stocahstics are oversold. Using the intraweek low, positive divergence exists with the indicators. This hints that there is likely lots of sideways ahead for yield. On the 10-year monthly chart, there is a sideways vibe as well. Yield may oscillate through the sideways 1.65%-2.10% channel for the weeks and months ahead. There remains some downside momo in the near therm for yield. A few months out the potential must be left open for the monthly chart to develop a downward bias and create lower lows in yield in te second half of this year. This information is for educational and entertainment purposes only. Do not invest based on anything you read or view here. Consult your financial advisor before making any investment decision.

Sunday, February 14, 2016

UPS United Parcel Service 20/50-Week MA Cross Cyclical Bull Market

Here is an update around one of Keystone's important stock market cyclical indicators; the UPS 20/50-Week MA Cross. The 20-week MA is above the 50-week MA signaling a cyclical bull market for stocks for the weeks and months ahead. However, note that the indicator was touting a cyclical bear market from May of last year through the end of the year. This signal was dead-on for warning investors to get out of the stock market last year. The long term cyclical bull market was over. But the bulls have battled back creating the positive cross in November.

There is a lot riding on this indicator. Since many other indicators, especially the negative slopes of the 150-day MA's, and drops of -20% and more for stocks and indexes, clearly indicate an ongoing cyclical bear market in equities, use the UPS 20/50 cross as the final arbiter of truth. For the bears to prove that market carnage and mayhem will continue, the 20-week must drop below the 50-week MA. If the 20 remains above the 50, the stock market will likely recovery and stage a more sustainable relief rally. Price is at 97.25 under the 20 at 98.04 so this serves to pull down the 20 MA lower which makes for happy bears. If UPS price moves above 98.85, the 20 will curl upwards and that will tell you that a relief rally is in play for the stock market and likely accelerating. 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.

GC Gold COT (Commitments of Futures Traders) and Gold Weekly Charts


Gold went parabolic over the last three weeks. With oil prices tumbling and stocks following oil down the rabbit hole, traders flock to the perceived safety of gold. Price rocket launches from 1060 to 1260, 200 points, +19%, in only six weeks. Gold has violated the upper standard deviation band so a pull back, even a small one, is likely. The green lines show long and strong behavior for price so higher highs should come after any minor pull back due to the stochastis becoming overbot and a hair neggie d (red line).

The COT chart shows the gold price bottoms with the green circles and the gold price tops with the red circles. The two prior important highs came with the bars on the chart extended slightly more towards the outer limits shown by the thin red lines. Thus, gold price may relax for a week but higher highs are likely and that may take the COT chart into the red bubble consistent where a top is placed. it looks like much of the move in gold may have already occurred.

Price will very likely move up to test the 1264 high but in the mean time a day or three of softness for price to take a breather is a reasonable expectation. The time to go long was in December when Keystone pointed out the low bars and green circles on the COT chart and the dark green lines with positive divergence on the candlestick chart. Although more upside is expected it is not particularly attractive to play gold long. Instead a step-wise approach to exiting the long side say over the next two weeks or so would be a prudent strategy and then gold may set up for a short say in March. 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.

WTIC West Texas Crude Oil Monthly Chart

Those waiting for the demise of oil may have to wait for a while. The green lines show positive divergence with all the indicators except for the MACD line, in this monthly time frame.. Thus, the expectation would be for oil prices to recover on the monthly basis but price does want to come back down one more time to satisfy the weak and bleak MACD line. In a monthly time frame, however, oil price could recover for 3 to 6 weeks and then roll over and come back down a couple months out in the April-May time frame. The weekly and daily charts previously posted are positively diverged and that jives with the expectation in the monthly chart above that a bounce should occur in the near-term.

Price may hold the 26-27 level for the remainder of the year. First thing is first and the coming days and week or two will determine if a rally occurs. The calls for oil under 20, and perhaps even under 22, appear unlikely this year, at this time. This can be reassessed in a month or two. Oil remains very news-driven but barring any headlines, price should recover in the near-term. There are a lot of shorts so a rally may become dramatic. 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.

WTIC West Texas Crude Oil Weekly Chart

Price stages a strong recovery on Friday to 29.02 and the weekly candlestick shows price recovering above the halfway point on the candle indicating bullish strength.The positive divergence on the indicators creates the launch in oil price on Friday.

The bottom band is violated so the middle band at 38.93 and dropping is in play. The pink dots show price extended to the downside so a mean reversion higher should begin. Oil remains very news-driven but barring any headlines, price should recover going forward for the weeks ahead. There are a lot of shorts so a rally may become dramatic. 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.

WTIC West Texas Crude Oil Daily Chart

Price stages a strong recovery on Friday to 29.02. The positive divergence on the indicators creates the launch in price. The middle band at 30.45 is in play also the upper band at 34.16. The pink dots show price extended to the downside so a mean reversion higher may be in progress. Oil remains very news-driven but barring any headlines, price should continue higher in the days, and week or two, ahead. There are a lot of shorts so a rally may become dramatic. 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.

OVX Oil Volatility and WTIC West Texas Crude Oil Daily Charts


Oil volatility is off the charts negative; you can smell the fear. Several oil traders jumped off the ledge last week; fortunately the ledge was the kitchen counter in the breakroom where the microwave oven is located. Even though oil prices remain soft, long traders have not yet stuck their head in the oven. Traders are wringing their hands professing doom and gloom, throwing their arms in the air calling for sub 20-dollar oil. Each day becomes more negative against oil prices; the boat is fully loaded to the short side. No one is long oil; everyone is convinced that oil will crash any day. Can it? Sure it can but typically when the sentiment is off the charts to the negative side and there are newspaper and web site headlines predicting the demise of oil that is when it will recover.

Keystone pointed out the uber negative sentiment about 3 weeks or month ago which created the mid-January bottom in oil. Prices ran higher and it looked like the worst may be over but the daily news headlines with OPEC, non-OPEC nations and Russia unwilling to cooperate with a production freeze or cut back, oil prices reverse and begin collapsing again.

The question is always if the negative news is priced in already, or are continued moves lower in oil justified on the negative news bites. Much of the negativity is likely priced in. The oil volatility chart, OVX, verifies the panic and fear rampant in the oil market. Everyone is walking on egg shells. The cab driver said he took his entire life savings and went short oil because the guy on television said it was a sure bet and oil is guaranteed to move lower.

Volatility shoots above the prior two highs and violates the upper standard deviation bands identifying where a bottom in oil price is likely. The pink dots show how volatility is extended way high above the moving averages so a mean reversion lower is needed; conversely WTIC is extended below its moving averages requiring a mean reversion higher.

Note how WTIC price has not touched the upper standard deviation band since September-October; price will need to move up to there at some point. A move back to the middle band, at 30.45, is in play, at a minimum, if price recovers as expected. Friday took a big move towards this target with current price at 29.02. The upper band is at 34.16 and the 50-day MA resistance is in that neighborhood at 33.78, so the 34-ish level is an upside target.

Keystone continues to like oil on the long side; currently in USO and UCO on the long side. Oil prices are very news dependent but if the news remains status quo, then oil should recover in price due to the excessive fear, panic and worry. If oil prices recover, stocks will recover. 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.