Tuesday, May 23, 2017

HYG High-Yield Corporate Bond ETF Weekly Chart; Overbot; Rising Wedge; Negative Divergence; Price Over Extended; Upper Band Violation

The high-yield bond ETF's such as HYG and JNK are at record levels. The party is in full swing with bankers in custom-tailored Armani suits drunk as skunks swinging from chandeliers and dancing on the conference room table while donning lampshades on their big heads. Investors are euphoric and optimistic about higher prices ahead. The boat is fully loaded to one side.

That rising red wedge is ominous. The collapses from rising wedges can be quite dramatic. If you are in these or similar instruments start leaving via the back door do not stick around anymore. Stochastics and the RSI are overbot open to seeing some downside ahead. The red lines show negative divergence with all indicators as price prints new highs. This is the same on the daily and 2-hour chart and the HYG and JNK charts are interchangeable. Neggie d forecasts a spankdown for price coming at anytime.

Price is over extended to the upside well above the moving averages needing a mean reversion lower. Price has violated the upper standard deviation band (pink) so a move back to the middle band, now at 86.88 and rising, is on the table, as well as the lower band at 85.25 and rising.

Keystone does not hold a position as yet but will be shorting HYG and/or JNK or similar instruments starting 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.

Keybot the Quant Turns Bullish

Keystone's trading algo, Keybot the Quant, flips back to the bull side on Monday at SPX 2390. Watch JJC 29.47 and XLF 23.55 to gauge broad market stock direction. The sideways choppy markets for the last three months keep chewing up bulls and bears alike. Keybot may whipsaw back to the short side at anytime considering these unstable markets. As always, more information is available on Keybot's site;

Keybot the Quant

Monday, May 22, 2017

INDU Dow Jones Industrials and TRAN Dow Jones Transports Daily Charts; Dow Theory; H&S


From a Dow Theory perspective, the trannies are printing lower lows and lower highs (red dots). If the Dow Industrials confirm this negative trend, it forecasts troubled times for the stock market ahead. If the Dow continues sideways and sideways higher and TRAN moves above 9300 the upside bull market party will continue.

If the Dow Industrials drop under 20404, that would be a lower low (red dots) and confirm the downtrend in the trannies as per Dow Theory. At that point, the stock market would be expected to roll over to the downside. TRAN exhibits a H&S pattern with head at 9600-ish, and neckline at 8875, so the downside target is 8150 if 8875 fails. The upper sideways channel behavior started later with INDU after February so its downside target is 19638 if 20404 fails. 

Note how INDU was making lower lows in 2016 going into the presidential election. The trannies were trending higher but in an ominous rising wedge pattern. Since the Dow was not confirming the strength in TRAN, the expectation would be for both the industrials and transports to drop like a stone, but alas, President Trump wins the election and everyone touts easier banking regulations, lower taxes and huge infrastructure spending ahead so it was immediate party time.

Stocks leap higher from November forward both indexes printing higher highs confirming more stock market upside (green dots), until the trannies collapse in March. Watch the 20404 level on the Dow very closely. Ditto the 8875 level on TRAN. These are bearish levels where bad things will happen to markets if they fail. 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.

Thursday, May 18, 2017

Keybot the Quant Turns Bearish

Keystone's proprietary algorithm, Keybot the Quant, flips to the short side on Wednesday at SPX 2376. For Thursday (today), watch RTH 80.15 as an important bull-bear line in the sand. As always, more information is available at Keybot's site;

Keybot the Quant

Tuesday, May 16, 2017

UPS United Parcel Service Weekly Chart with 20/50 MA Cross; Negative Market Signal

One of Keystone's key intermediate term stock market signals is the 20 and 50-week MA cross for UPS. UPS and FDX are shipping giants that serve as global bellwethers for the stock market. When times are booming, parts, contracts and packages are flying back and forth via United Parcel Service generating big profits for the shipper. When consumers spend money, nowadays it is Amazon that benefits, and those products are shipped by the men and ladies in brown short pants. Robust activity at UPS verifies a healthy and strong economy; or visa versa if UPS falters.

The 20-week MA crosses down through the 50-week MA for UPS a negative market signal. This portends weak stock markets and a weak economy going forward.

Note the soft period in 2015 but the cross would not stay negative. That told you that the stock market would recover after the early 2016 selloff, and it did. UPS rallied big last year as everyone believes the global economy is reinflating and accelerating. The 20/50 cross remains positive signaling party times ahead for bulls. Until now. The punch bowl appears to have gone dry and people are passed out on the couch and floor. 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, May 9, 2017

SPXA150R S&P 500 Stocks Above 150-Day MA and SPX S&P 500 Weekly Charts


The SPXA150R is one of Keystone's favorite indicators. When it moves above 85 and 90, you can bet the farm on the short side. When the price drops below 20%, you can typically bet the farm on the long side. After over eight years of central banker intervention goosing markets higher, the SPXA150R obviously remains at elevated levels currently at 72.60.

When stocks bottomed during the financial crisis, note how the SPX price made a new low in early 2009, as Federal Reserve Chairman Bernanke contemplated a quantitative easing policy that would prevent stocks from dropping further (spitting in the face of capitalism and free markets), the SPXA150R made a higher low. This divergence identified the bottom in the stock market in 2009 and the central banker money printing, now on a global basis, continues pumping equities higher over eight years later. The central bankers are the market.

For this year, the SPX makes a higher high in price as the SPXA150R makes a lower high. Is this divergence identifying the multi-year top? (it is likely very near over the coming weeks and months)

If you are a retail investor new to stock trading and are patting yourself on the back at your great gains on the long side, in fact, you are thinking that you may be one of the best investors of all time, you had better get a reality check. These are not your grandfather's markets. The likely smartest approach going forward is to cash out of all your longs and simply remain in cash through the summer. Enjoy the nice weather. Take a trip to the beach. Look at things again in the late summer and Fall. Going forward it is likely more prudent to steadily and slowly bring on shorts against the indexes.

Pundits will cite great data and a calming geopolitical scene as reasons to buy the long side. Of course these money managers and analysts are pumping and hyping stocks because they are distributing shares to the retail sucka's now showing up to buy (pump and dump). In reality, the economic data remains soft and wage inflation is not occurring thus overall inflation will not occur shooting the Fed's plans for ongoing rate hikes in the foot. Most importantly, a recession will hit at anytime and you will see the economy and markets drastically deteriorate in a matter of weeks and a few months once it begins.

The stock repurchase programs are a virus that has entered markets. The buybacks take advantage of the Fed's easy money, and company cash reserves, to buy back stock (which is not the best idea with prices at record highs). This behavior has artificially boosted stock prices by at least +30% and more. The PE ratio, generally around 18 and 19 for the broad stock market is deceivingly low because of the buybacks. If none of the buybacks had occurred over the last few years, the PE ratio would be well beyond 20 (small caps have been above 20 for the last three years).

Looked at another way, the earnings at, say 130/share right now would be at least -30% lower or more. A 130 earnings and 18.5 PE gets you SPX 2400 right where we are at with the broad stock market. Earnings are only boosted because shares are disappearing from the buybacks. If the buybacks never occurred, earnings may be around 90 or 100 which would equate to 1765-1850 on the SPX. This will get everyone's attention when it likely occurs at some point over the next couple years. When everyone looks back a couple or more years from now, they will say how could we miss the impact of massive stock repurchase programs that went on for years?

The 18-year secular cycle has been mentioned often by Keystone. This is a very reliable stock cycle. The stock market is in the secular bear cycle from 2000 to 2018 so the last couple years or so should play out negatively for stocks considering the recent years of upside joy. It is very common, actually expected, to see dramatic and strong countertrend cyclical rallies inside the secular bear such as 2003 to 2007 and 2009 to present. Also, remember, the markets are artificially goosed for the last eight years by the central bankers.

A secular bull 18-year cycle will run from 2018 through 2036 which makes sense since inflation and hyperinflation in the coming years will drive stock prices strongly higher, such as Dow 30K and SPX at 4 or 5K years down the road, however, the US dollar will be toilet paper so the gains will not equate to much purchasing power for the average citizen in the 2020's. This will be a new set of problems for a future day. Even though stocks will be strongly higher in the 2020's, it will not be much fun paying 10 bucks per gallon for gasoline, or 6 dollars for a loaf of bread or 10 dollars for a gallon of milk.

Back to the present, due to the obscene central banker Keynesian intervention for many years, the current 2000-2018 secular bear cycle may become right-translated and extend to 2019 even 2020. Time will tell. Those expecting inflation, the vast majority on Wall Street, will be disappointed as disinflation and deflation likely remains on the table for another one to perhaps four years. Watch your wallet. 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, May 7, 2017

BPSPX Bullish Percent Index Daily Chart

The BPSPX is on a market sell signal currently and the sideways action for the last six weeks shows an ongoing bull-bear fight. Markets reversed by six percentage-points in November (Trump election rally begins) to create a market buy signal. When price moved above the key 70% level that was a double-whammy buy signal for stocks. The BPSPX came down for a back kiss of the 70 level to begin the new year and bounced rewarding the bulls. Price then threatened to fail through the 70 again in February but bounced creating another bull party.

The key signals for the BPSPX are the six percentage-point reversals and the 70% level. As March began, the BPSPX was near 80 thus, a six percentage-point reversal is 74. Price fell through that level (note the sharp drop when it occurred since the computers were looking for the reversal) issuing the current market sell signal. The bears puffed their chests out and pushed price down to test the 70 level which would then create a double-whammy sell signal and all systems go for major market selling, but alas, the bulls bounce back and prevent the failure at 70.


The bulls and bears are battling in a sideways choppy market that chews up both sides. The bulls need a six percentage-point reversal higher, to push above 76, to receive the double-whammy buy signal and lots of upside ahead for the stock market. The bears need to push under 70 to receive the double-whammy sell signal and send the stock market strongly lower. Who will win? Watch the 76 and 70 levels and you will receive an answer on market direction ahead. Note the H&S (head and shoulders) pattern in the chart, now forming the right shoulder, which would target 60 if the 70 neck line fails (head is at 80). 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 Tuesday Morning, 5/9/17: The BPSPX drama continues with price at 71.40. Which side will win?

Note Added on 5/17/17: The BPSPX falls under the 70 level to 69.00 issuing a double-whammy market sell signal.

April Publication of the Daily Chronology of Global Markets and World Economics 2017-04 is Available from Amazon; COMPQ, NDX and RUT All-Time Highs; COMPQ (Nasdaq Composite) Tags 6,000; Bitcoin Record Highs; Germany’s DAX 12,500; India’s BSE Sensex 30,000; Paltry 98K Jobs Report; Bank Earnings GS Disappoints; North Korea Turmoil; Article 50 Begins Brexit Process; Macron Likely Next President of France

The April Publication of the Daily Chronology of Global Markets and WorldEconomics 2017-04 is available through Amazon. The epic market action continues with more all-time stock market highs in the major indexes. The one-half of the United States that own stocks are joyous day after day while the other half of the United States struggles through eight years of high unemployment and debt. The gap between rich and poor in America is the widest in five decades. The United States is experiencing a gilded age (created by the Federal Reserve and other global central bankers); a society of the have’s and the have not’s.

April Cover Highlights;
COMPQ, NDX AND RUT ALL-TIME HIGHS
COMPQ (NASDAQ COMPOSITE) TAGS 6,000
BITCOIN RECORD HIGHS
GERMANY’S DAX 12,500
INDIA’S BSE SENSEX 30,000
PALTRY 98K JOBS REPORT
BANK EARNINGS GS DISAPPOINTS
NORTH KOREA TURMOIL
ARTICLE 50 BEGINS BREXIT PROCESS
MACRON LIKELY NEXT PRESIDENT OF FRANCE

The chronology explains the activity in global stock, bond and currency markets to key geopolitical events, central banker monetary policies and economic data releases. If you are trying to make sense of the markets this is the resource for you. No other publication exists where the stock, bond and currency moves are detailed and explained as world events take place in real-time.

You can re-live the real-time price moves and excitement in markets for any past event including Brexit (2016-06 and 2016-07), the US election (2016-11), the drama behind the French election (2017-04), economic data releases, monthly jobs reports, Fed meetings, etc...

As always, all monthly publications of the Daily Chronology of GlobalMarkets and World Economics are available from the links in the margins of the K E Stone blog sites or simply searching on Amazon or Google. The monthly publication contains updated information not posted on the Keystone the Scribe web site as well as clarifications, edits and refinements to the ongoing daily blog text. The April publication includes the Friday, 5/5/17, jobs report action.

The May 2017-05 chronology is tentatively set for publishing by Amazon on Saturday, 6/3/17.

Friday, May 5, 2017

US Monthly Jobs Report 5/5/17 Explained Simply for the Non-Economist

(below is an excerpt from the Keystone the Scribe website that chronicles the daily market action and events)

The consensus expectation for the US Monthly Jobs Report is 185K jobs. Last month was the disappointing and paltry 98K jobs that cannot even keep up with new entries into the workforce. The unemployment rate is expected to bump higher to 4.6% versus the current 4.5%. Private Payrolls are expected to come in at 180K jobs versus the prior 89K jobs.

The Average Hourly Earnings are expected to rise +0.3% month-on-month versus the prior +0.2%. Year-on-year is expected to rise +2.7% in line with the prior +2.7%. The wage data is more important than the headline jobs number and unemployment rate since it dictates whether overall inflation will occur going forward, or not.

The dirty little secret the Fed will never mention in public is that wage growth of +4.0% to +4.5% year-on-year is needed to sustain an inflationary trend. Even if wages increase to +2.8%, +2.9% or even +3.0% they remain a ways away from +4.0% and higher. This is why Yellen has always maintained her dovishness and hesitancy with rate hikes. If wages do move above +3.0%, however, that may lead to an acceleration higher. Inflation will remain elusive if wages remain below +3.0% year-on-year.

The Federal Reserve’s grand eight-year Keynesian experiment will be proven a failure if inflation does not materialize. Fed Chair Yellen will be clicking her heels with joy if wages outperform to the upside but will cry and search for a shot of booze if wages disappoint. If wages are weak, inflation is not on the come, Treasury yields will not move higher and the Fed will delay future rate hikes. If wages meet or beat expectations, inflation is coming and the Fed will look like geniuses proceeding with their plans this year for at least two more rate hikes with a growing economy.

The Average Workweek is expected at 34.4 hours a tiny tick higher from the prior 34.3 hours. The Labor Participation Rate is at 63.0%. The revisions are important in this morning’s data especially any adjustment to last month’s low 98K jobs. Traders are fixated on the wage data.

With the jobs report imminent, US futures are flat. S&P flat. Dow -23. Nasdaq -1. Russell -1. VIX 10.46. WTIC 45.05. Brent 48.03. Natty 3.22. Gold 1231. Silver 16.37. Copper 2.5115.

DAX -0.3%. CAC +0.1%. FTSE -0.1%. MIB +0.5%. IBEX flat. PSI -0.3%.

Euro 1.0967. Euro/yen 123.32. Dollar/yen 112.45. Pound 1.2940. Euro/pound 0.8475. Mexican peso 19.0613. Canadian dollar 1.3766. Dollar/yuan 6.9022. Indian rupee 64.375. Aussie dollar 0.7387. USD 98.90.

Treasury yields are; 2-year 1.31%, 5-year 1.89%, 10-year 2.36%, 30-year 3.00%. The 2-10 spread is 105 bips.

At 8:30 AM EST (1:30 PM London; 2:30 PM Frankfurt and Paris; 9:30 PM Tokyo), the US Monthly Jobs Report is 211K jobs and an unemployment rate of 4.4%. Both headline numbers beat their respective 185K and 4.6% forecasts. The prior month is revised lower from 98K to 79K jobs. Ouch. The previous two months are revised lower for a net 6K job loss. Jobs are averaging 185K per month this year. Private Payrolls increase by 194K jobs beating the 180K expected and above the prior revised-lower 77K jobs (prior number was 89K).

The unemployment rate is at 4.4% a decade low. If the economy was going like gangbusters, an economic phenomena should be occurring where the unemployment rate temporarily climbs instead of falling. When the economy is recovering and doing well, people become excited and start to actively look for work again. These folks coming back into the labor market are then once-again counted in the unemployment rate statistic which will send the rate temporarily higher.

The bump higher in the unemployment rate is typically a temporary phenomena that occurs as an economic recovery begins and proceeds forward. The rate will then begin trending lower again after a few weeks or months to reflect the better economic conditions going forward. Thus, this morning’s data showing a further drop in the unemployment rate is more indicative of a stagnant economy with businesses holding on to bare bone staff levels hoping for more work to come in the door.

Leisure and hospitality gain 55K jobs. Healthcare adds 37K jobs. Business and professional services add 39K jobs. Government jobs increase by 17K. Manufacturing is up a small 6K jobs. Construction gains 5K jobs. Note that the higher paying manufacturing and construction jobs lag the lower paying burger-flipping, bed-making, sheet-washing, bathroom-cleaning and table-waiting jobs. “Do ya want some fries wit dat burger?” And of course the government bureaucracy grows.

The Average Hourly Earnings are in line at +0.3% month-on-month but are up +2.5% year-on-year falling short of the +2.7% expectation. Yellen pours a shot of whisky into her café latte. Wages are stagnant which means inflation will remain subdued. Interestingly, however, the joyous headline numbers are sending the Fed Funds futures higher and a June rate hike is being priced in and expected.

Yellen is in between a rock and a hard place because market participants expect a June rate hike and more on the way but in her heart of hearts she knows that inflation will not appear since there is no wage inflation. Yellen gulps down her spiked coffee and signals to Charlie Evans to bring her the bottle. The 2-year yield is at 1.32%.

The Labor Participation Rate drops a tick to 62.9% so President Trump will quickly sweep this statistic under the BLS rug (less, not more, people are participating in the workforce). The U-6 rate is at 8.6% at levels not seen since November 2007. Average Workweek is in line at 34.4 hours.

US futures react calmly. It is one of the more non-eventful jobs reports in recent months. S&P +2. Dow -4. Nasdaq +6. Russell +2. VIX 10.36.

WTIC 45.27. Brent 48.22. Natty 3.21. Gold 1230. Silver 16.37. Copper 2.515.

DAX -0.1%. CAC +0.3%. FTSE +0.1%.

Euro 1.0981. Euro/yen 123.46. Dollar/yen 112.41. Pound 1.2953. Euro/pound 0.8476. Mexican peso 19.00. Canadian dollar 1.3764. Dollar/yuan 6.9022. Indian rupee 64.375. Aussie dollar 0.7395. USD 98.73. The US dollar is lower and euro higher.

Treasury yields are; 2-year 1.32%, 5-year 1.88%, 10-year 2.35%, 30-year 2.99%. The 2-10 spread is 103 bips (flatter yield curve than before the jobs data).

At 9 AM, S&P +4. Dow +1. Nasdaq +11. Russell +5. VIX 10.21. DAX -0.1%. CAC +0.6%. FTSE +0.3%.

Treasury yields are; 2-year 1.32%, 5-year 1.90%, 10-year 2.36%, 30-year 3.00%. The 2-10 spread is 104 bips.

WTIC 45.39. Brent 48.35. Natty 3.22. Gold 1229. Silver 16.33. Copper 2.521.

Euro 1.0971. Dollar/yen 112.60. Pound 1.2941. Mexican peso 19.0159. Canadian loonie 1.3758. Aussie dollar 0.7401.

At 9:30 AM EST, US stocks begin trading flattish. The SPX gains 5 points to 2394. The Dow is down 10 points to 20941. The Nasdaq Composite begins up 16 points, +0.3%, to 6092 only 10 points from another new all-time high. VIX 10.20. Market bears do not have any hope with volatility so low. USD 98.79.

REV is not looking pretty crashing more than -20% after reporting earnings at the opening bell. Revlon will need a lot of makeup to cover the bruises from the beating. NFLX +0.666%. TSLA +0.8%. TTWO +0.6%. GIS is up +1% after spiking +5% higher on takeover rumors. VIAB +2%. OLED +18%. Universal Display rallies from 50 last Fall to 106 today.

DAX +0.1%. CAC +0.666%. FTSE +0.3%. MIB +1.1%. IBEX +0.5%. PSI +0.1%.

WTIC oil 45.58. Brent 48.53. Natty 3.23. Gold 1228. Silver 16.28. Copper 2.508.

Treasury yields are; 2-year 1.32%, 5-year 1.89%, 10-year 2.35%, 30-year 2.98%.

Utilities are higher. XLU +0.5%. Financials are marginally negative. Energy stocks are recovering from yesterday’s losses. XLE +0.5%. APA +1.8%. OXY +0.9%. SLB +0.2%. MUR +1.8%. RRC +0.6%. XOM +0.2%. XOP +1.7%. OIS +1.3%. Tech and chip stocks are flat reflecting the flat broad indexes.

The BDFC IPO, a fracking company, is postponed ‘due to market conditions’. The fracking IPO’s are not doing well this year. FRAC debuted a few months ago and has moved from 22 down to 12. There are a lot of sucka’s holding that bag.

At 10 AM, markets are finding their footing after a happy jobs report beating on the number of jobs and unemployment rate but falling short with wages. SPX 2391. INDU 20929. COMPQ 6077. RUT 13989. VIX 10.25.

At 10:37 AM, SPX 2390. INDU 20911. COMPQ 6068. RUT 1386. VIX 10.24. European indexes are floating higher. DAX +0.2%. CAC +0.4%. FTSE +0.4%.

(the Daily Chronology of Global Markets and World Economics continues at Keystone the Scribe's website)

VIX Volatility and SPX S&P 500 Monthly Charts; VIX at 10-Year Lows Reflecting Complacency in Markets


The VIX drops to 9.90 this week reflecting a complete lack of fear that the stock market can ever go down. Low volatility indicates rampant complacency. The green circles show the uber highs in stocks when volatility is uber low; the booze party rages on into the wee hours (when you sell the market). The red circles show the sadness and depression in stock prices when volatility spikes higher; there is blood in the streets and traders are jumping from windows (when you buy). What are you doing?

The Keybot the Quant algorithm identifies VIX 12.00 as the key bull-bear line in the sand. VIX is at 10.46 so the bulls are winning. If stocks selloff but VIX remains under 12, the bears got nothing and stocks will rally. If stocks sell off and the VIX moves above 12, there is lots more market selling on tap.

You can also watch the important 200-day MA now at 12.94. The stock market will be collapsing in earnest if VIX moves above 12.94. Market bulls can recover after a selling event if the VIX remains under 12.94 and begins dropping again to 12 and lower. There is no hope for bulls if the VIX moves above 12.94 since the selling will be extensive and ugly (until the VIX spikes to a high identifying a tradeable bottom like the red circles above). This information is for educational and entertainment purposes only. Do not invest based on anything you read or view here. Consult your financial advisor before making any investment decision.

Note Added 11:55 AM EST: The VIX is at 10.15 with a LOD at 9.99, a 9-handle printing again! HOD is 10.52. Bears do not have any hope with volatility so low.

Note Added Tuesday Morning, 5/9/17: The VIX drops to 9.67 at a 24-year low not seen since 1993. The fearlessness and complacency is off the charts. Traders are drinking Fed wine and Trump champagne each day, drunk as skunks, buying stocks with reckless abandon and total disregard for price. The joyous stock market party continues. Traders high-five each other proclaiming that stocks will never go down ever again. Television pundits shout, "buy, buy, buy!"

COMPQ Nasdaq Composite Prints Above 6,000 at Record Highs; Major Indexes At or Near Record Highs

On Tuesday, 4/25/17, the Nasdaq Composite gaps up at the opening bell printing above 6,000 for the first time in history. Several more days of new all-time record highs follow through Tuesday, 5/2/17, two days ago. The all-time high in the COMPQ is 6102.72 on 5/2/17 and the all-time closing high is 6095.37 on 5/2/17.

The Nazzy 100 Index prints new all-time record highs in concert with the Nasdaq Composite since the high-flying tech stocks such as FB, AAPL, AMZN, NFLX, GOOGL, INTC and MSFT pump the indexes higher. The NDX all-time high is 5645.08 on 5/2/17 and the all-time closing high is 5644.07.

The small caps print new all-time highs in late April but are trending lower for the last six days after the top. The Russell 2000, RUT, all-time high is 1425.70 and all-time closing high is 1419.43 both printing on 4/26/17.

The S&P 500 and Dow Jones Industrials are near record highs but not yet able to move above. The SPX all-time high is 2400.98 and all-time closing high is 2395.96 both from 3/1/17. The INDU, or DJI, all-time high is 21169.11 and all-time closing high is 21115.55 both from 3/1/17.

Trannies remain uncooperative with TRAN, or DJT, the Dow Jones Transportation Index, at 9138 well below its all-time high at 9639 from 3/1/17. The NYA, NYSE Composite, is at 11535 trying to venture higher to its all-time high at 11687 from 3/1/17. It remains interesting that the flash spike high at 11688.45 on 12/27/16, that was swept under the rug by the exchanges and regulators, ended up printing as the NYA's record high at 11687 on 3/1/17 two months after the flash spike high occurred that was expunged from the record. What does that tell you about the rigged stock market?

Watch to see if COMPQ can move above 6103, NDX above 5645, RUT above 1426, SPX above 2401 and/or the Dow above 21169. Bulls win if any of the numbers are printed. Bears win if they make a stand and never allow higher numbers for these key indexesThis 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, April 26, 2017

Keybot the Quant Turns Bullish

Keybot the Quant is back on the long side since Monday. As always more information can be found on Keybot's site, Watch copper and banks.

Keybot the Quant

Wednesday, April 12, 2017

Thursday, April 6, 2017

Keybot the Quant Turns Bullish

Keystone's proprietary trading algo, Keybot the Quant is on the long side after two days of whipsaw behavior in markets. More information is found at Keybot's site;

Keybot the Quant

Tuesday, April 4, 2017

March Publication of the Daily Chronology of Global Markets and World Economics 2017-03 is Available from Amazon; SPX, INDU, COMPQ, NDX, RUT, NYA & TRAN ALL-Time Highs; SPX 2,400 and INDU (DOW) 21K; Fed Hikes Key Rate 3/15/17; London Terrorist Attack; Netherlands Election; Subprime Car Loans; Westinghouse Bankruptcy; Obamacare Trumps Trumpcare; SNAP, JILL, GOOS & PUMP IPO’s

The March Publication of the Daily Chronology of Global Markets and WorldEconomics 2017-03 is available through Amazon. The epic market action continues with more new all-time stock market highs. The one-half of the United States that own stocks are joyous day after day while the other half of the United States struggles through eight years of high unemployment and debt. The gap between rich and poor in America is the widest in five decades.

March Cover Highlights;
SPX, INDU, COMPQ, NDX, RUT, NYA & TRAN ALL-TIME HIGHS
SPX 2,400 AND INDU (DOW) 21K
FED HIKES KEY RATE 3/15/17
LONDON TERRORIST ATTACK
NETHERLANDS ELECTION
SUBPRIME CAR LOANS
WESTINGHOUSE BANKRUPTCY
OBAMACARE TRUMPS TRUMPCARE
SNAP, JILL, GOOS & PUMP IPO’S

The chronology explains the reaction in stocks, bonds and currencies to key events and economic data releases. If you are trying to make sense of the markets this is the resource for you. No other publication exists where the stock, bond and currency moves are detailed and explained as world events take place in real-time. You can re-live the real-time price moves and excitement in markets for any past event including Brexit (2016-06 and 2016-07), the US election (2016-11), economic data releases, Fed meetings, etc...

As always, all monthly publications of the Daily Chronology of Global Markets and World Economics are available from the links in the margins of the K E Stone blog sites or simply searching on Amazon or Google. The monthly publication contains updated information not posted on the Keystone the Scribe web site as well as clarifications, edits and refinements to the ongoing daily blog text.

The April 2017-04 chronology is tentatively set for publishing by Amazon on Saturday, 5/6/17.

Saturday, April 1, 2017

Keybot the Quant Turns Bearish

Keybot the Quant flips back to the short side at SPX 2367. Copper and volatility are the two parameters most greatly impacting stock market direction currently. More information is found at Keybot's site;

Keybot the Quant

Tuesday, March 28, 2017

Keybot the Quant Turns Bullish

Out of the blue this afternoon, during the big rally, Keystone's proprietary trading algorithm, Keybot the Quant, flips to the long side at SPX 2361. Market bulls need higher banks, the XLF above 23.94, to keep the party going to the upside.

The bears can stop the upside rally in stocks dead in its tracks with either JJC under 30.43, RTH under 78.16 and/or VIX above 11.85. More information is found at Keybot's site;

Keybot the Quant


SPX S&P 500 30-Minute Chart with 8/34 MA Cross and 60-Minute Chart with 200 EMA Cross


Here are two of Keystone's key VST (very short term) stock market direction indicators. On the SPX 30-minute, the 8 MA remains under the 34 MA signaling bearish markets for the hours ahead. The price action is in a downward channel. The SPX is at 2342 above the 8 MA so price continues to pull this moving average higher to potentially create a positive cross above the 34 MA and prove that the bulls will receive a relief rally. The market bears must push price under the 8 MA at 2340 pronto to curl it lower away from the 34. Watch this closely.

On the SPX 60-minute, the S&P 500 is below the 200 EMA on the 60-minute at 2352 signaling bearish markets for the hours and days ahead. Note how price failed through the 200 EMA last Tuesday, a week ago, so you knew markets were in trouble. The SPX then comes up for the back kiss and on Friday was spanked down unable to overcome the 200 EMA. If a relief rally occurs, pay attention to the 2352 level since that will determine if any rally continues, or if it is squashed. For now, the bears rule the markets with  bearish signals from both charts. The first hint that the bulls are creating a market bottom and recovering would be shown with a positive 8/34 MA cross on the SPX 30-minuteThis 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 8:20 PM EST: At 11 AM EST, the SPX price ran above the 200 EMA on the SPX 60-minute chart at 2352 signaling bullish markets for the hours and days ahead. The bears were on the ropes and then, at 11:30 AM, the 8 MA crosses above the 34 MA on the SPX 30-minute chart signaling bullish markets for the hours ahead. The bulls punch the bears squarely in the face. The bears fall backwards and do not know what hit them.

Friday, March 24, 2017

BPSPX Bullish Percent Index Daily Chart

The BPSPX six percentage-point reversals and the 70% level are two key signals for the stock market. The BPSPX was on a buy signal and in December price poked above the 70 level creating a double-whammy buy signal. Note the textbook back kiss of the 70 level which proves how important this level is.

So the bulls party like its 1999 into the early March top. That red line is 79.6 so taking away 6 is 73.6. Interesting. Despite what seems to be a lot of recent selling and negativity in the stock market, the BPSPX remains on the double-whammy buy signal. The bears need to push the BPSPX under 79.6 to receive a sell signal and prove that down is the direction ahead for equities. If the BPSPX then drops through the 70 level, the stock market will be collapsing significantly lower with a double-whammy sell signal. If the BPSPX remains above 79.6, the bears got nothing and the bulls will celebrate a recovering stock market that keeps moving 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 Tuesday Morning, 3/28/17, at 8 AM EST: The BPSPX collapses to 71.80 reversing more than six percentage-points off the 79.6 top which issues a market sell signal. The market bears will create serious damage to the stock market if the BPSPX next drops under 70. Bulls simply need to prevent the BPSPX from slipping under 70.

Wednesday, March 22, 2017

VIX Volatility Daily Chart; 200 EMA Cross

There are two key levels to watch in the VIX this week. First is the 11.92 level which was violated to the upside yesterday which sent the broad stock market another leg lower in the afternoon trading. Keybot the Quant is on the short side and the algo is identifying 11.92 as the key bull-bear line in the sand. VIX creates a positive influence on the stock market under 11.92 and a negative impact, like now, above 11.92.

The second number to watch is the 200-day MA at 13.56. As the chart shows, the bulls are happy when the VIX is under the 200-day (green circles) while the bears rule above the 200 (red circle). So you can gauge the direction and strength of the stock market with VIX 11.92 and 13.56.


Under 11.92, the bulls rule. Between 11.92 and 13.56 stocks are moving sideways with a slight downward bias. Bears rule the markets above 13.56.


In addition, a previous chart shows the 200 EMA on the SPX 60-minute chart at 2354. This  number is extremely important. Bulls win big above SPX 2354. Bears win big below SPX 2354.


Keybot is tracking the VIX 11.92 number. In addition, bulls will recover if VIX moves below 11.92, RTH moves above 78.25, JJC above 30.40 and/or XLF above 24.04. Volatility, retail stocks, copper and financials are the main parameters dictating market direction currently. Any one of the four parameters turning bullish will stop the downward slide in the stock market. Monitor the parameters above since they tell you what you need to know. 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 6:37 AM EST Friday Morning: With the Friday session ahead, the VIX sits at 13.12. Close, but no cigar for the bears. Bears need to poke above the 200-day MA at 13.56 to prove they have the strength to drive the stock market strongly lower. Market bulls are content with the stock market since they are keeping the VIX below 13.56.

Note Added 8:03 AM EST Tuesday Morning, 3/28/17: The VIX runs above the 200-day MA at 13.56 creating stock market selling for a couple days but then retreats back down through the 200-day MA on Monday, 3/27/17. The VIX tagged 15.11 yesterday but is now down to 12.50. The VIX at 12.50 continues to cause market negativity based on the Keybot algorithm, however, the bears need the VIX above 13.56 if they want to create serious stock market damage. The bulls will easily weather the storm if the VIX remains under 13.56.

Tuesday, March 21, 2017

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

The SPX drops under the 200 EMA on the 60-minute chart at 2354 signaling bearish markets for the hours and days ahead. The market bulls are toast if the S&P 500 remains under 2354 but the bulls will be fine if the SPX moves above 2354. Watch this number like a hawk over the next couple days.

The tight bands squeezed the move lower in this one-hour time frame. Price has violated the lower band so the middle band at 2369 and falling is on the table. The indicators want a bounce in price now but the weak and bleak MACD line wants another lower low after price bounces in this 60-minute time frame. Thus, a bounce would be expected in stocks for the first hour or two of trading on hump day, then back down to test the lows in price, then a more substantive recovery for a few hours.

The 2-hour chart shows weak and bleak chart indicators so it may take from 2 to 5 candlesticks to set up with possie d which would be 4 to 10 hours of trading time which is all of Wednesday and Thursday. Thus, a guess would be that the SPX may recover into Wednesday afternoon but then may roll back over to the downside for soggy  markets for a day or two.

The 200 EMA at 2354 is extremely important and tells you what you need to know concerning market direction. Bears win big with the SPX under 2354. Bulls win big above 2354. 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.

Quarterly Reminder

It is time for the Quarterly Reminder;

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Sunday, March 19, 2017

SPX Monthly Chart; Obverbot; Rising Wedge; Negative Divergence Developing; Upper Band Violation; Price Extended

The SPX monthly chart above is a bowl of spaghetti. Note the universal negative divergence across all indicators over the last four years (red lines) which are calling a multi-year top on the come. The dark red lines show the May 2015 market top spanked down by the universal neggie d. The Fed and other central bankers saved the day in February 2016, as usual, and then President Trump's November election kicked stocks into overdrive with traders drooling over promises of lower taxes, less regulation and massive infrastructure spending. The ECB's QE has been a key driver in the buoyant stock market but the central bank is reducing its monthly asset purchases from this month into April.

So stocks float higher after the May 2015 major top fueled by central banker easy money and Trump hype. The red lines are universal neggie d wanting a multi-year top to print at anytime but note the very near term. The Trump bump creates short-term momentum as shown by the short green lines that indicate long and strong RSI, MACD line and money flow. This will likely create a couple jog moves in price until these indicators can print neggie d in the very short term to match the neggie that remains in place over the last four years. As long as the RSI and MACD lines stay below the purple line shown in the right margin, the bears will have their multi-year top at some point in the near future (probably within 16 weeks). Above those lines and the multi-year top would be likely occur in October-ish instead. The chart will simply have to be monitored as it develops.

The month of March began at 2364. The SPX is at 2378, up 14 points this month, +0.6%. The month ends on Friday 3/31 which is 10 trading days away where the chart will receive an official print for March and a candlestick for April will begin. The S&P 500 is currently  up for five months in a row gapping-up on the Trump joy each month since November.

The RSI and stochastics are overbot wanting to pull back and take a rest. Price is extended above the 10-month moving average above the 20-mth MA above the 50 MA above the 100 above the 200 so the SPX needs a mean reversion lower. Price tags the upper standard deviation line at 2374 sitting firmly above at 2378. The S&P 500 will need to move lower to touch the middle band at 2119 and rising, and the lower band at 1864 is on the table as well for the weeks and months to come.

The pink box shows that the upside multi-year rally was a strong trend in late 2013, 2014, 2015 but then petered out in 2016. The ADX is down at 16 so the move higher in the stock market, at or near record highs, is occurring but not with a strong trend anymore. The rising wedge over the last two years and the long-term rising wedge since 2009 are ominous since the drops from rising wedges can be quite dramatic.

The 10-month MA is 2220 and followed closely by old-timers that control a lot of money on Wall Street. Algo's, such as Keybot the Quant, have this number programmed into models. The 10-month is an excellent early warning indicator of serious trouble ahead. If 2220 is lost stocks will likely drop like a rock. The 12-month MA at 2197 is Keystone's indicator called "the cliff" since markets will completely fall apart under this level now at, say, 2200-ish.

Recapping after all this windbag talk, there is momo in the short-term monthly basis, but the neggie d over the last four months is very ominous. Stocks may go down for one month, then back up for a month for a matching high, when the RSI would likely turn neggie d in the couple-month time frame, then down for a month, then back up again where the MACD should go neggie d in the couple-month time frame. This would be THE top; thus, down to mid April, up to mid May, down to mid June, up to mid July then major roll over to the downside. This momo in the shorter term is subservient to the negative divergence for all indicators in place over the last four years.

The four-years of neggie d is is like an anvil hanging over the market's head supported by a thin frayed rope. The stock market may be able to play out the down up down jog move or moves described, however, the rope may snap and markets may collapse downwards at anytime printing the major top and the long-term downside begins. The 18-year stock cycle is coming to a close in 2018 (2000 to 2018; 1982 to 2000 was a secular bull) and we are  in a secular bear so it makes sense that now through 2018 and perhaps 2019, negative years should be logged for the stock market. It is very common to have powerful cyclical bull markets such as 2003-2007 and 2009 to present within the secular bear so this action is no surprise. A secular bull market would occur from 2018 to 2036 which makes sense since inflation and hyperinflation will likely kick into high gear in the 2020's driving all prices wildly higher.

The expectation would be for a major multi-year market top to print in the April-July time frame, or sooner (at anytime forward). The prices in the stock market now, once she rolls over at anytime in the weeks ahead, may not be seen again for many years. Looking at the prior SPX weekly chart and technical analysis, the MACD line needs to go neggie d to identify the market top in the weekly time frame which may be a couple weeks out so it is conceivable that the stock market may print its epic multi-year top over the next month. The weekly chart would be cooked and the monthly chart would honor the four years of neggie d across all chart indicators shown above which would be the end game and then the bears would begin to growl for many months and perhaps a couple years 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.

Friday, March 17, 2017

SPX S&P 500 Weekly Chart

On the SPX weekly chart, price makes a new higher high from 2 weeks ago. Looking at the indicators, all are neggie d ready to create a spankdown except the pesky MACD line. The MACD line remains long and strong as price makes a new high, thus, price will likely make a jog move, down, up, then  potential roll over, on a weekly basis, to provide time for the MACD line to display neggie d which will identify THE top in the weekly time frame.

So the indicators want to see price spanked down for say, a week or so, then price will venture back up again for a matching or higher high in this 2385-2393 area, and, if the MACD line is then sloping downward indicating neggie d, the top will be in, and the S&P 500 will roll over to the downside.

Price has violated the upper standard deviation band and needs to return to the middle band at 2272 and rising and perhaps the lower band at 2118 and rising. The red rising wedge is ominous since the collapses from rising wedges can be quite dramatic. A top is near as described.

Interestingly, Fed Chair Yellen speaks on 3/23/17 although she may or may not discuss monetary policy. The new moon peaks on Monday, 3/27/17 so perhaps some market voodoo is on tap to end the month and begin April. 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; Tight Bands; Sideways Symmetrical Triangle

The dark red lines show the prior top on the daily chart. The negative divergence with the MACD line, histogram, stochastics and money flow, and overbot RSI and Stoch's all pointed to a down in price, which occurs, but that RSI printed a tiny peak so this long and strong sliver of strength wanted price to come back up again, which it is doing now. Price is not yet matching the prior high as shown by the thick red line so negative divergence cannot yet exist, but the thin red lines in the right margin for the indicators clearly show each one sloping lower and lagging. If price would make a matching or higher high at 2400-ish, chances are all the indicators will be neggie d forecasting a move lower that will be sustainable on the daily basis.

A sideways triangle is in play and a breakout above 2182-2183 opens the door to 2432 while a drop below 2368 forecasts a drop to 2318. The SPX is printing above 2183 as this message is typed so the bulls have the bears in the corner and are giving them the ole one-two.

The tight bands forecast a big move on tap any day forward that will probably create a move of 30 or 40 handles or more. Tight bands do not forecast direction. The pink boxes show a strong upside trend in December but this petered out. However, this month, the strong trend shown by the elevated ADX reestablished itself. Market bulls need the ADX to curl upwards again while market bears need the ADX to start dropping to stop the strong uptrend.

It may be reasonable to expect that price will come up to touch the upper band at 2392 and from there either become squeezed strongly higher, or, forced lower by the band squeeze. Coming up to 2392-2400 may be good enough to satisfy that RSI strength from 13 days ago. With the indicators staying under the thin red lines, the bears would be favored going forward but the door remains open for 2384-2393 over the next day or two. Price remains above the moving averages and continues to need a mean reversion 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.