Tuesday, December 12, 2017

SPX S&P 500 2-Hour Chart

The SPX 2-hour chart has been dishing out drama over the last couple weeks. Price is news-driven lately with central banker dovishness continuing and the tax-cut talk is also maintaining buoyancy in stocks. Price recovers but not due to positive divergence. Traders know that equities are bullish about 80% of the time into the Fed meetings and keep front running this seasonality more and more over the last few months.

The maroon lines show the negative divergence spankdown off the top but note that the MACD line squeezes out a tiny higher high. The MACD tells you that the SPX will likely come back up after a pull back and this occurs with price now back up in the neighborhood of the highs from last week.

The red lines show negative divergence wanting a spankdown to occur. However, the RSI and MACD line continue moving higher trying to keep the upside party going for a couple or few more candlesticks. Watch the RSI to see if it takes out the prior high that occurred when price made its high early last week (purple circle). The top is in if the RSI does not move above the prior high in the purple circle. If the RSI sneaks out a higher high, it will take a couple more candlesticks (each candle is 2 hours of trading time) for price to set up with negative divergence and identify the top.

Even with Yellen professing dovishness on Wednesday afternoon (tomorrow), the top should be in at this 2660-2670 level but the FOMC drama will have to play out 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.

SPX S&P 500 Daily Chart; Overbot; Negative Divergence Developing; Upper Band Violation

Here is an update of the S&P 500 daily chart from the weekend. The chart is setting up with negative divergence and the idea was to watch the MACD line to see if it could move higher and it did. The other indicators are neggie d (red lines) wanting a pullback but the MACD line moves higher, long and strong, wanting another higher high in price.

The central bankers are the market. Stocks typically rally into the FOMC rate decisions about 80% of the time so traders were in a rush to buy equities believing it will be all upside into the Fed decision Wednesday afternoon.

Putting the central banker intervention to the side, the chart set-up would typically create a jog move for a couple days dropping lower due to the neggie d, but then recovering for a higher high in price due to the MACD fuel. When price comes back up, if the MACD line negatively diverges, the top is in. So this would be say, down today then up tomorrow for the potential top. However, the central bankers always have their thumbs on the scale (with the pending rate decision) and stocks remain buoyant.

Price violated the upper standard deviation band requiring a move at least back to the middle band at 2613 and rising. With the long and strong MACD line, price wants another higher high so the upper band at 2669 remains on the table. The chart is topping out but the Federal Reserve is the wild card. If Yellen expresses dovishness on Wednesday, equities will pop higher. Taking the Fed out of the equation, stocks would be expected to slip today, then rally tomorrow placing a top with the MACD going neggie d. This information is for educational and entertainment purposes only. Do not invest based on anything you read or view here. Consult your financial advisor before making any investment decision.

Monday, December 11, 2017

NYA NYSE Composite 5-Minute Chart; NYA Flash Spikes +56% Above 19.7K then Flash Crashes to 12.7K

The NYA flash spikes +56% above 19.7K at the opening bell then about one hour later flash crashes retracing the move. This is how the saga played out today.

At 9:30 AM EST, a major flash spike occurs in the NYSE Composite. The NYA catapults higher from 12643.06 to 19763.65 a huge 7120.59 points, a +56.3% gain for a major index. Something is drastically wrong with the pricing and data feeds. Amazingly, Bloomberg, CNBC and Fox do not mention the blaring event. It is ridiculous that a major index would make such a move. The NYA price remains elevated above 19.7K. Internet business sites do not mention the wild move. What is going on? Perhaps the markets are subject to another flash crash event a la 5/6/2010.

At approximately 10:40 AM EST, the NYA flash crashes from the flash spike high at 19.65K down to 12.65K, a -36% crash. This is ridiculous behavior for a major stock index. The exchanges, business networks and internet are quiet about the event sweeping it under the rug before anyone notices. No doubt a fat finger or computer glitch will be blamed. This is extremely scary behavior and a serious omen that a major flash crash event may be on the come for the US stock market. NYA is at 12653 up 10 points on the day a marginal gain.

At 4 PM, the NYA finishes up 25 points, +0.2%, to 12668.21 a new all-time closing high. The NYSE Composite prints a wild spike high at 19763.65 a new all-time intraday high. The NYA flash spiked at the opening bell to 19764 a +56% gain and then flash crashed back down the same price amount about one hour after the opening bell. There is no information available behind the reason for the wild and scary behavior. 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 Flash Crashes, Fat Fingers and Computer Glitches, Oh My! eBook by K E Stone is available from Amazon by clicking the link at the right. The eBook will be updated for the 2017 flash spikes and flash crashes and is slated for publication by Amazon in January.

NYXBT Bitcoin Weekly Chart

Bitcoin prices are all over the map and different exchanges report different prices. Bitcoin popped to near 20K on the Coinbase exchange last week and then retreated to 15K. As this is typed, bitcoin is up +16.666% to 17500.

The bitcoin saga begins in 2015. The standard deviation bands squeezed in tight (purple arrows) predicting big moves which happened to be higher. Tight bands do not predict direction only that a huge move is on tap. Bitcoin proceeds merrily along with higher highs and goes parabolic beginning March of this year.

Bitcoin price peaks in August with overbot RSI and stochastics, the bearish rising wedge pattern and negative divergence with the RSI, stochastics, ROC and Williams. This told you that bitcoin wants to pull back for a rest. The MACD line and histogram, however, remain long and strong in August so you knew that after a pull back bitcoin would move higher again for another high price and this occurs. Price drops to the September low and then takes off parabolically higher into the present day.

Price stabs up through the upper band so the middle band at 5872 and rising is on the table. There are so many gap-up moves on the chart it looks like Swiss cheese. Someday these gaps will be filled on the downside.

With the higher high in price, the indicators remain mixed. The RSI and stoch's remain overbot and prefer to see price taking a rest going forward. The RSI, however, ekes out a higher high providing more upside juice for further bitcoin highs. Ditto the MACD line and histogram both long and strong. Ditto the ROC. The overbot conditions want to see a pull back but bitcoin should head further higher after any stall move.

The ADX indicates that the price trend for bitcoin was off the charts higher in 2016 (purple box). The ADX prints an unbelievable 70 in June 2016 forecasting strength ahead for the cryptocurrency and the higher highs occur. Note, however, that bitcoin continues higher but the ADX is at 62.44 off the high at 70-ish 18 months ago. Thus, despite the parabolic spike higher in price, the trend higher in price is not as strong as in 2016. The trend is the strongest of this year, however.

If you are banking on bitcoin heading ever higher, watch the ADX since you will need it to surpass the elevated 70 level to prove the trend higher remains strong. The overbot conditions want to see price move lower in the near term but higher highs are expected going forward. Looking at the monthly bitcoin chart, the RSI, stochastics and Williams are overbot but the RSI is squeezing out a higher high, the MACD line is running vertical and the ADX trend is strong.

The monthly chart points to higher highs in bitcoin into the early new year. This does not mean parabolic moves continue. Price may simply idle sideways with an upward bias for several months forward.

The weekly chart hints at choppy trading ahead with fits and starts and bitcoin squeezing out new highs on the weekly basis but this may run out of gas over the next month or two. Bitcoin price would be expected to fall on this weekly basis say somewhere into the 6K to 10K range but then likely recover again to the current highs since the monthly chart is strong.

Keystone does not have a position in bitcoin. One trading idea is to simply let bitcoin burn itself out over the coming 2 to 6 weeks and buy that pullback when it occurs since the monthly chart remains strong. Bitcoin price is at 16657. 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, December 10, 2017

America's Fake News; A Layman's Guide to the Biased News Reporting in the United States

by K E Stone (Keystone the Scribe and The Keystone Speculator)

Non-biased news in America has gone the way of the penny loafer. Unbiased and impartial news reporting and journalism in the United States is as rare as hen’s teeth. Each news source you follow is slanting the news story towards either the Republican Party or Democrat Party manipulating American minds.

The US is a two-party crony capitalism system. This article explains the news bias in the US that must be considered when absorbing any information on the internet, radio or television.

The democrat-leaning news sources will always tout former President Obama, Hillary Clinton and progressive and liberal ideals as the greatest thing since sliced bread while denigrating republicans. At the same time, the republican-leaning news sources place President Trump on a pedestal praising every decision as genius. The republican media touts conservative ideals (even though most republicans no longer believe in fiscal conservatism as evidenced by the obscene Keynesian spending over the last nine years by both parties) while bashing democrats. America has become very ill and divided.

The cable news networks practice news sensationalism to attract eyeballs since advertising fees, the mother’s milk of profits, are dependent on viewership. The lip gloss beauties reading the teleprompters display long sexy legs that attract viewers. One pair of shiny legs is longer than the next pleasing the majority of male viewers. Roger Ailes, that ran the Fox News media empire for many years but had to resign in disgrace, then croaked, professed the mantra that “legs equal viewers.”

Botox is on full display at the news networks with talking heads sporting foreheads tighter than a garage band’s snare drum. The female news readers don beautiful custom-tailored dresses at over $500 a pop that highlight their attributes. A first-year marketing student will tell you that “sex sells.” The news networks manipulate minds into loyal democrats or republicans.

News is entertainment nowadays when it used to simply provide level-headed facts. All news is biased in America. News organizations do not even attempt to hide it anymore. The teleprompter readers comment at the end of each news story reinforcing the network’s bias. It is standard fare for anchors to praise, or denigrate, each news story depending on the networks bias.

President Trump calls out the ‘fake news’ from CNN, MSNBC, the broadcast networks (ABC, CBS, NBC), public television (NPR and PBS), New York Times, Washington Post (owned by Amazon CEO Jeff Bezos a democrat) and others on a daily basis highlighting the exaggerated negative bias. The democrat-leaning media is relentless in denigrating Trump and hopes he fails and is removed from office. America used to support the president no matter what party is in the Whitehouse but not anymore. The country has changed.

There are always two sides of the coin and President Trump conveniently ignores the fake news spewing daily from Fox News, Breitbart, Rush Limbaugh, Mark Levin and others that denigrate the democrats while praising republicans and the decisions made by the orange-headed leader of the Free World.

Interestingly, most Americans prefer the middle ground and are very disturbed at the direction the country over the last couple decades. Independent voters are on the rise as many US citizens are fed up and do not want to be associated with either party and the political baby games. Many Americans do not realize that they are actually libertarians in their thinking wanting fiscal responsibility concerning government budgets and tax policy and at the same time do not care what people do in the privacy of their own bedrooms.

But enough of this windbag front matter; all you want to know is what the media bias is in America and who are the major players so without further ado lets expose the nasty truth about the United States media.

You may decide on different percentages of bias after reviewing the lists below but the most educated guess is that about 70% of the news in America is biased towards democrat, liberal and progressive minds while 30% of the news is biased towards republican and conservative thinking.

Democrat, Liberal and Progressive (Left-Leaning) News Outlets, Groups and Organizations Represent About 70% of the US Media
ABC (broadcast television dominated by the left)
CBS (broadcast television)
NBC (broadcast television)
PBS (pubic television)
NPR (public television)
CNN (cable television news)
MSNBC (cable television news)
Bloomberg (cable business news)
Associated Press (AP)
New York Times
Washington Post
LA Times
San Francisco Chronicle
Boston Globe
USA Today
Huffington Post
Media Matters
Brookings Institute
The Economist
American Prospect
Reliable Sources (CNN)
Vox Media
Television Business
Movie Business
Music Business
Publishing Business
Pop Culture
Saturday Night Live (SNL) Comedy Show
Celebrities/The Aspen Elite
Silicon Valley
Colleges and College Professors
LBGTQ Community
Pro-Choice Advocates
Union workers and employees making minimum and low wages tend to favor the left.
The major US cities lean democratic including New York City, Boston, Washington, DC, Los Angeles, Seattle and Chicago. The states of Virginia, New York, California, Oregon and Washington are left-leaning.

Republican and Conservative (Right-Leaning) News Outlets, Groups and Organizations Represent About 30% of the US Media
Fox News (cable television news)
Rush Limbaugh (talk radio is dominated by the right)
Sean Hannity
Mark Levin
Glenn Beck/The Blaze
Laura Ingraham
Hugh Hewitt
Dennis Prager/Prager University
Mark Steyn
Drudge Report
Wall Street Journal (WSJ)
American Spectator
National Review
Washington Times
Daily Caller
Daily Wire
The Federalist
MediaBuzz (Fox News)
National Rifle Association (NRA)
US Chamber of Commerce
The Heritage Foundation
The Religious Right
Pro-Life Advocates
Country Music/Patriotic Anthems
Auto Racing/NASCAR (National Association for Stock Car Auto-Racing)
Upper-middle class professional employees such as attorneys, doctors, engineers and accountants, and high-wage earners, tend to favor the right.
The Midwest and Rust-Belt cities, the Heartland (the center of the United States often referred to as the ‘fly-over country’), lean republican.

Assessing the news bias above yields 70% of media in the democrat camp and the other 30% in the republican camp. America is no longer united and instead has become tribal. Both the republican and democrat ‘tribes’ place their party ahead of what is actually good for the United States. This sad new face of America spells trouble for the United States going forward. Tribal allegiance rules the day.

President Obama had a free ride during his eight years in office since 70% of the media was always on his side praising his decisions and covering up any mistakes. On the other side of the ledger, for example, republican presidential candidate Mitt Romney was ridiculed daily by the liberal press during the 2012 presidential race; he never had a chance. It is like playing a football game where the referees are paid off helping one team win. Republicans are at a disadvantage since the news coverage is weighted towards the democrats.

President Obama was the first media selected and elected president in America’s history. Obama never cared much about what he said off the cuff since if he did misspeak, the liberal press would always protect him.

President Trump has a tougher row to hoe since only 30% of the media is supportive to his agenda while the other 70% denigrates the president every 10 minutes. Like it or not, many Americans must accept Trump as president and give him a chance for the sake of the country. President Trump won the election fair and square.

Many Americans receive their daily news from the broadcast television stations such as ABC, CBS and NBC which slant the news in favor of democrats while representing republicans in a bad light. The democrats hold the advantage in the media bias game.

This article changes the way you view the media and news outlets. Monitor the news sources listed above and the bias will smack you squarely in the face. As long as you know how the game is played, you can filter the news and not become a puppet of the establishment republicans and democrats that attempt to control your mind daily.

Use the above knowledge to filter out the news bias. Before consuming any news, first read the byline or reference the lists above to determine which news organization is peddling the left or right-leaning propaganda. Think objectively and independently. A smart American declares a pox on both the republican and democrat houses.

SPX S&P 500 Daily Chart; Overbot; Negative Divergence; Upper Band Violation; Powell Rally

The day before the Powell Rally, the maroon lines show universal negative divergence in play with overbot RSI and stochastics and a rising wedge pattern all portending downside. As Keystone always states, however, in these manipulated markets, the only thing that can nullify the chart and create more upside is central banker joy. Jerome Powell, the next Federal Reserve chairman that will take over from Chair Yellen, appeared for his confirmation hearing in front of the Senate Banking Committee on 11/28/17 and hit the ball out of the park. Stocks became orgasmic celebrating the new Fed head. He had all the right answers and plans to continue Yellen's dovishness.

The tax-cut bill continues making progress through Congress creating further upside so the chart has to adjust for these joyous real-time events.The red line shows the higher high in price on Monday morning, 12/4/17, but the red candlestick shows that price collapsed as the day played out; it was a bull trap.

With the new all-time high for the S&P 500 at 2665.19 on 12/4/17, the indicators are negatively diverged. The MACD line is neggie d over the last two months but note the short green line that was trying to create a higher high. This little bit of juice remaining in the MACD helps create the Thursday and Friday recovery in price.

The expectation is for the SPX to roll over in this daily time frame. The thin red lines in the right margin show how the indicators are sloping negatively after the all-time high, however, this is not negative divergence since price did not make a new high on Friday. The key is that thin red line for the MACD. As long as the MACD remains below that thin red line, stocks should roll over to the downside. If stocks rally, it does not matter, they will roll over. But if price floats higher and the MACD moves higher, that will extend the upside for a day or few.

Price has violated the upper band so the middle band at 2609, and rising, is on the table. If price floats higher to begin the week, the 2662-2663 upper band is the likely target and if price prints there check the MACD line as described above to see if it negatively diverges or if it makes a higher high.

The CPC and CPCE put/calls printed the uber lows 9 days ago so the expectation was for a pullback in stocks. Instead, the powerful Powell Rally and tax-cut bill joy jam the chart higher. A pull back occurs of about one-half the gains but the SPX rallies again last week on Thursday and Friday. The CPC is up to 0.94 and the CPCE is at 0.60. A selloff remains on the table for equities until a tradeable bottom occurs when the CPC prints above 1.20 and the CPC prints above 0.80. Thus, mixing the above analysis together, forecasts a pull back on tap going forward.

The central bankers are always in play ready to goose stocks higher especially by crushing volatility. Global central bankers collude daily to depress the VIX and guarantee an ever-rising stock market. The FOMC 2-day meeting is Tuesday and Wednesday and stocks are usually bullish into the Fed events. This week is OpEx with Quadruple Witching on tap on Friday. For OpEx week each month, a Tuesday low typically leads to a Wednesday high so the bulls have seasonality factors on their side especially from Tuesday into Wednesday.

Mixing the seasonality stuff into the analysis above, stocks may dip to begin the week into a Tuesday low then rally into Yellen's press conference on hump day. The expectation is for lower prices ahead but the central bankers are extremely powerful and Wednesday afternoon will have to play out. The central bankers are the 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.

Note Added 4:24 AM EST on Tuesday Morning, 12/12/17: As you saw at the opening bell on Monday morning, the MACD line squeezes out a higher high so the bulls ran stocks higher in the Monday session. Equities typically rally into the Fed decisions and traders are front-running this seasonality factor. If you bring up the SPX daily chart, note that the RSI, histogram stochastics and money flow remain negatively diverged wanting the S&P 500 to sell off, but the MACD line wants another higher high in price. If the Fed was not on tap this week, this would typically create a couple day jog pattern, down one day, then back up to satisfy the MACD. If at that higher high with price the MACD line goes neggie d, then the top is in. If the MACD line continues higher, or if one of the other parameters move higher, the bulls will keep extending the upside. The stock market is likely creating drama into the Fed decision and Chair Yellen press conference on Wednesday afternoon.

RTH Retail ETF Daily Chart; Mother of All Short-Squeezes

The RTH retail ETF (exchange-traded fund) rocket launches into a parabolic price move over the last month (22 trading days). RTH jumps from 81.60 to 90.82 a huge +11.3%. Everybody and his brother was short the retail stocks and once the sector caught a bid, and short-sellers began covering, the move went parabolic with the shorts running for their lives. The short-covering creates the rocket fuel sending price into the stratosphere; the mother of all short squeezes. The RTH is rallying a half-percent per day every trading day over the last month.

There are 10 major retailers in the RTH ETF including AMZN, HD, WMT, COST, LOW, SYY, TGT, ROST, TJX and CVS. Amazon's big jump higher over the last month creates much of the upside joy in RTH. Investors started shorting retail stocks heavily this year and Joe Schmo jumped into the game as well; all have received their heads on a platter.

Note the tight standard deviation bands in early November (purple arrows) that forecasted a big move on tap. Tight bands, however, do not predict direction only that a huge move is about to occur one way or the other. This one was obviously up. Consider how surprising that was since market participants were all on the short side of the boat. Once the upside move started it accelerated since shorts had no choice but to cover (buy stock to cover the short position and exit the trade).

Price has violated the upper band so the middle band at 86.78, and rising, is on the table. The red lines show negative divergence for the indicators as RTH prints new highs except for the MACD line that remains long and strong. The RSI and stochastics are overbot wanting to see a pullback. The rising red wedge is a bearish pattern.

RTH will likely weaken for a day or two but the long and strong MACD line will probably create another high. At that time, the MACD will likely go neggie d along with the other indicators and the top will be in on the daily 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.

PLAT Platinum Weekly Chart; Platinum at 2-Year Low

Precious metals pull back last week as the US dollar index rises above 94 now at 93.90. Platinum collapses -6.1% to 883 at levels not seen since February 2016. Platinum is one of the least reactive metals and is corrosion resistant making it an ideal choice for catalytic converters for cars, buses and trucks. The ladies love the platinum jewelry as well.

If 'Peak Auto' is occurring, platinum will be hit and it does drop more than gold and silver last week, that dropped -2.6% and -3.5%, respectively, hinting that part of the platinum drop is due to projected weakness ahead in the car industry. The automobile and housing industries are the two key drivers of economic strength. This information is for educational and entertainment purposes only. Do not invest based on anything you read or view here. Consult your financial advisor before making any investment decision.

INDU Dow Jones Industrials 5-Minute Chart; DOW PRINTS ABOVE 24,000 FOR FIRST TIME IN HISTORY

On Thursday, 11/30/17, on the last day of November, the Dow Jones Industrials, INDU or DJI, print above 24,000 for the first time in history. The world is awash in never-ending global central banker liquidity pumping all asset classes continually higher. The central bankers are the 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.

Keybot the Quant is Short but the Stock Market Remains a Coin Flip

Keystone's proprietary trading algorithm, Keybot the Quant, is on the short side but the stock market remains in a choppy sideways trend. The bulls will regain control in the stock market if the semiconductors, SOX, move above 1254. Bears will send stocks sharply lower if the VIX  moves above 10.76. One of these two parameters will flinch and dictate stock market direction forward.

As always, more information is found at Keybot's site;

Keybot the Quant

Saturday, December 2, 2017

November Publication of the Daily Chronology of Global Markets and World Economics 2017-11 is Available from Amazon; Record Highs in World Stock Markets Continue; Dow 24K+; SPX 2600+; Bitcoin 11K+; Tax-Cut Bill; Brexit; Jerome Powell Next Federal Reserve Chairman; Amazon CEO Bezos $100 Billion Man; Tech Stocks Selloff; Flattening Yield Curve; High-Yield Bond Outflows; VIX Flash Crashes to Historic 8.56 Low; Former Trump Adviser Flynn Cooperates with FBI

The November Publication of the Daily Chronology of Global Markets and World Economics 2017-11 is available through Amazon. The historic market action continues with more all-time and multi-year record stock market highs printing in the major indexes and individual stocks around the world. The world is awash in central banker liquidity so all asset classes continue floating ever higher, perhaps forever.

November Cover Highlights;
DOW 24K+
SPX 2600+

The November chronology highlights the non-stop all-time record breaking stock market highs in all seven major US indexes (SPX, INDU or DJI, COMPQ, NDX, RUT, NYA, TRAN or DJT). The Dow overtakes 24,000 and the S&P 500 is above 2600. Bitcoin prints above 11.1K before dropping back.

President Trump continues boasting about the new record highs in stocks taking full credit and responsibility for the joy. Oil is on the move higher with both West Texas and Brent printing at two-year highs.

Jerome “Jay” Powell will be the new Fed chairman and he breezed through a confirmation hearing in November. Former Trump National Security Adviser Michael Flynn cops a plea and decides to cooperate with the FBI investigators. Flynn promptly throws Trump’s son-in-law Jared Kushner, under the bus. Thump, thump.

The chronology explains the price moves in global stock, bond and currency markets after key geopolitical events, central bank monetary policy meetings and economic data releases such as the monthly jobs report. 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 and economic news take place in real-time.

You can re-live the real-time price moves and excitement in markets for any past events including the May 2015 stock market top (2015-02 through 2015-10), Brexit (2016-06 and 2016-07), the US election (2016-10 and 2016-11), the drama behind the French election (2017-04 and 2017-05), economic data releases, monthly jobs reports, Fed meetings and much more. The wild overnight crash in the S&P futures, and quick recovery, after President Trump’s election last November is chronicled in real-time, as it happened minute-by-minute, in the 2016-11 publication.

In the 2017-11 publication, relive the 400-point intraday drop on Friday, 12/1/17, when it was thought that former Trump adviser Michael Flynn had implicated the president in nefarious deeds. This news story turned out to be not true although Kushner is in trouble.

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 publications contain updated information not posted on the Keystone the Scribe web site as well as clarifications, corrections, edits and refinements to the ongoing daily blog text.

The December 2017-12 chronology is tentatively set for publishing by Amazon on Saturday, 1/6/18.

The highly popular ‘Keystone the Scribe’ daily market chronology blog, ‘The Keystone Speculator’ stock, bond and currency (Forex) technical analysis and charts blog and the ‘Keybot the Quant’ algorithm blog are visited by over one-half million people around the world each month. The free original content on these sites is not available anywhere else and only continues if the sites are supported. Thank you. As a universal rule, disable your ad-blocking software for these blogs so the robots can tally proper advertising credit for the sites. The ads are very unobtrusive and benign. Proceeds aid charities.

Thursday, November 30, 2017

SPX S&P 500 2-Hour Chart; Overbot; Rising Wedge; Negative Divergence; Upper Band Violation

Here is an update of the SPX 2-hour chart from the weekend. The idea was to wait for neggie d to form for all indicators which would likely take the stock market into Monday afternoon, which it did. The catalyst (for bulls) was Tuesday with Jerome Powell having his coming out party. Stocks are up over 80% of the time into Fed meetings and Fed events. The bulls kept stocks buoyant into the confirmation hearing and then the Powell Rally took over sending stocks wildly higher. The SPX popped 30 handles in only about 7 or 8 hours. Always remember, the central bankers are the market. That is why they are always mentioned as a caveat.

Since the Fed pops stocks again the chart has to reset with its negative divergence which will mark the top. Remember, the CPC and CPCE put/call ratios printed uber low numbers and want to see a near term market top. The chart shows universal neggie across all indicators (red lines) except for the pesky MACD line. So you should know the drill by now; the top is not in until the MACD line goes  neggie d.

The stochastics and RSI are overbot and want a pullback. The MACD line is up in nosebleed territory. The red rising wedge is bearish. Price has violated the upper standard deviation band so the middle band at 2612 and rising is on the table as well as the lower band at 2585. Price is extended above the moving averages requiring a mean reversion lower.

So bears are champing at the bit for their turn at bat which should be very near. The MACD has to go neggie d to open the downside door. Thus, price should drift lower,then recover again for another matching or higher high. When that occurs, check to see if the MACD has gone neggie d. If so, the top is in. If the MACD continues sloping higher, then a couple more candlesticks would be needed to set the MACD up with neggie d.

It looks like a couple of candlesticks should set up the MACD neggie d. If bullish, you want to see the RSI inch higher, even a sliver of strength, since that will keep the upside game going another couple of candlesticks. The bears are close. The top should be in say anytime over the next 4 hours so that would be today. The MACD line will tell you when.

Keybot the Quant algo remains long with the robot tracking volatility, copper and chips as the main drivers of market direction currently. 

As this message is typed, the S&P 500 prints a new all-time record high at 2640.14 the highest number in stock market history. The majority of market participants and watchers do not realize that they are living through historic stock market action in real-time that will be talked about for decades to come. 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, November 28, 2017

CPC and CPCE Put/Call Ratios Daily Charts Signal Uber Complacency and Near-Term Top At Hand

The CPC and CPCE put/call ratios are at uber low levels signaling rampant market complacency. Today, the bulls rally stocks on the Powell Rally and happy tax bill talk. Banks are strong. Investors believe that central bankers will always save the day so there is no reason to take on downside protection, hence the low put/call ratios.

When the market is complacent, that is when it peaks and rolls over so that would be expected ahead in this daily time frame. The near-term top should occur at anytime any day forward. The pull back will probably be from 20 to 80 handles in the SPX and if it gains steam to the downside maybe more.

The SPX 2-hour chart posted on the weekend kept going higher and not printing universal negative divergence as yet. The RSI and MACD line has to roll over to place the top so that may take from 2 to 5 more candlesticks which is 4 to 10 hours; say, tomorrow or Thursday for the potential top that would gel together with the need for a top due to the low put/calls. 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, November 26, 2017

SPX S&P 500 Monthly Chart; Overbot; Upper Band Violation; Price Extended; Negative Divergence Developing

The SPX monthly chart strengthened over the last couple months as the ECB and BOJ keep pumping liquidity into global markets and President Trump keeps promising tax cuts while cutting banking regulations. The red lines show negative divergence. The stochastics are cooked and want this long multi-year upside rally to end. Ditto money flow. However, note the RSI running into the stratosphere above 82. There are 4 days remaining in the month so the chart may change depending if the bears growl this week, or not.

The histogram ticks a tiny bit higher which will help create another month or two of stock market joy. This weak is critical since it may bring the RSI lower to end the month which will bring the multi-year top in sooner rather than what appears to be another 2 to 4 months out.

As mentioned in the previous monthly chart posting, watch the MACD line like a hawk. See how the ADX is moving higher but remains below the peaks from late 2014. This is negative divergence since SPX price moves higher in the same period. This indicator will tell you if the multi-year top is coming on fast or will be delayed a few more months. Bears need to keep the ADX below the prior highs, otherwise, the bulls receive a huge feather in their caps and stocks will likely remain at record highs early next year perhaps into springtime. If the MACD rolls back over and does not take out the 2014 high, the multi-year top for stocks is coming a lot faster than anyone thinks, say within 3 or 4 months or sooner.

The ADX is on the verge of moving into the purple box which signals a strong upside trend on the monthly basis. This would create strong bull juice to begin the new year. The downtrend was very strong in 2008 into 2009 when former Fed Chairman Bernanke rode in on a white horse and began printing money in March 2009 (QE1) to save the stock market and protect the wealthy elite class.

The 2014 period was another strong trend for stocks, this time higher, but that petered out. Never fear. The BOJ and ECB stepped in to keep the easy money printing presses going and guarantee that stocks will continue higher forever. So here we are in late 2017.

The projection is that stocks will pull back in sync with the weak daily and weekly charts but on this monthly basis, the S&P 500 will come back up again for new record highs after the near-term pullback. The multi-year top will be in when the RSI and histogram go neggie d; the next 4 days are important.

From the chart above, the multi-year top should print within the next 4 months it is a question of narrowing it down further and more will be known on Thursday. Keystone can post more monthly charts once the data point for November is cast in stone 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.

SPX S&P 500 Weekly Chart; Overbot; Negative Divergence; Upper Band Violation; Price Extended

The SPX weekly chart is set up for a pull back. The RSI and stochastics are overbot and agreeable to a move lower in this weekly time frame. The red lines show negative divergence across all indicators so the move higher is running out of gas and set up for a spankdown. Note the volume last week one-half the average weekly volume. Markets were closed on Thursday for Thanksgiving and closed early Friday but the new stock market record highs, with the SPX closing above 2600 for the first time in history, occurs on vapor volume.

The maroon lines show the top Keystone called in the summer. As usual, however, once stocks wanted to move lower, the central bankers step in to save the day. The ECB and BOJ remain very accomodative so stocks float higher. The world is awash in central banker liquidity sending all asset classes to bubblicious highs. It is interesting that from a technical perspective, there was no reason for the stock market to recover that quickly in the late summer--except for central bankers.

The upper band was violated so the middle band, the 20-week MA, at 2513 is on the table. Price is extended above the moving averages requiring a mean reversion at some point forward.

The ADX leaps higher to 38 indicating that the weekly uptrend in the S&P 500 is a very strong trend higher (pink box). When the stock market softened after the May 2015 top, that Keystone called back then, equities trended lower with lower lows and lower highs. The Fed and other central banks panicked in early 2016 and stepped in to save the day with liquidity again. That created the Tweezer Bottom (blue circle). The central bankers are the market.

The SPX daily and weekly charts are set up for a pull back so if you were contemplating on trimming positions, don't wait any longer. The SPX monthly chart is setting up with neggie d, as has been the case this year, but the RSI keeps running higher wanting to create more monthly highs in price. This RSI  may retreat over the next four days since the EOM is Thursday. This week is shaping up to be immensely important on how the year ends. Tax loss selling typically hits a peak the first week of December so if the bears can begin the down move in equities it may carry through into mid-December.

The expectation is for the stock market to pull back on the daily and weekly basis. Market bears, howerver, cannot expect any extended downside in the stock market until the ADX above drops below 28-ish, the RSI on the monthly chart goes neggie d and also for the utilities sector to roll over. The neggie d on the weekly chart above indicates that there is more of a likelihood that stocks will finish the year weak.

The monthly chart indicates that stocks will come up for another record high after the selloff. The best Christmas present the market bears can receive is for stocks to sell off on Monday through Thursday to end the month weak since this may bring the RSI on the monthly chart lower and usher in the multi-year top in the stock market sooner rather than say, 2 to 4 months out. The monthly charts receive final data points at 4 PM EST Thursday, 11/30/17.

Of course, any additional happy dovish talk from central bankers or from President Trump can create a temporary further boost in prices before the downside in the near-term begins. All things staying status quo, equities should begin rolling over this week and create at least 2 or 3 weeks of soggy stock market prices 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.

Saturday, November 25, 2017

SPX S&P 500 2-Hour Chart; Rising Wedge; Overbot; Negative Divergence; Upper Band Violation

The SPX daily chart is set up with overbot stochastics and negative divergence for the chart indicators so a move lower is expected. Perhaps the 2-hour chart above may shed some light on the timing of this potential near-term top. The red lines show the universal neggie d in play across all chart indicators although the MACD line is squeezing out a bit more juice. This may create a jog move in price down, then up, then down.

The upper band was violated so the middle band at 2592 is on the table and lower band at 2574. The upper band is at 2609 so this level must be respected as the new week begins trading on Monday morning. The pink circle shows the two top candlesticks with a mini tweezer top pattern. Typically, the upper shadows from the candlestick body should be longer to create a more obvious tweezer but the mini-tweezer is worth watching nonetheless and may be calling out the near-term top now.

The SPX daily chart and the 2-hour above indicate price is ready to roll over. The 2-hour above may jog sideways for a couple candlesticks to allow the MACD line and money flow to set up with negative divergence. That will identify the near-term top. If price drops, then comes back up once more that would be 3 or 4 hours of trading time so the near-term top may occur around lunchtime or in the afternoon on Monday as long as the Fed, other central bankers and the orange-headed President Trump remain quiet and do not pump the market higher with dovish talk. 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; Overbot; Rising Wedge; Negative Divergence; Upper Band Violation; SPX CLOSES ABOVE 2600 FIRST TIME IN HISTORY

The SPX closes above the 2600 level for the first time in history at 2602.42. The highest number for SPX ever printed in history is 2604.21. Sound the Seven Trumpets! The red lines show a rising wedge pattern and negative divergence with the indicators, and overbot stoch's; all bearish indications. The S&P 500 tagged the upper standard deviation band so the middle band at 2585 is on the table and lower band at 2567. 

Price is extended above the moving averages requiring a mean reversion lower. The purple box for the ADX shows when the S&P 500 was in a strong trend higher but this petered out a week or so ago. The bears have it on a silver platter if they want it. The SPX should receive a move lower at least to the 2585-ish area for starters. Happy talk from the central bankers or from President Trump may delay the rollover.

The little circles show volume distribution days. After an up day in price, Joe Sixpack, Ma and Pa Kettle and Uncle Frank run into the market the next day to buy shares. The smart money distributes the shares to the bag holding suckers lining up with naive smiles on their faces. The trading volume on the following day is larger than the buying volume on the prior day when the price was 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.

UTIL Utilities Weekly Chart; Overbot; Rising Wedge; Negative Divergence; Upper Band Violation

Everyone keeps asking if the big stock market top is in. Keystone has been highlighting the monthly charts and waiting for the stars to align this year. When the multi-month and more likely multi-year top prints, it will be in sync with utilities rolling over at the same time or utes rolling over from zero to 2 months ahead of the broad stock market. As the utilities continue to rally this year, it is tough sledding for the market bears. Thus, a key exercise is watching the utilities to see when they roll over.

Two tools are useful to assess UTIL; the 50-week MA and the closing price 15 weeks ago. The 15-week look back determines if the utes are in a weekly uptrend or downtrend and this will correspond to the same direction in the broad stock market. Obviously, market bears want to see UTIL roll over into a weekly downtrend which portends trouble ahead for equities. Also important is the 50-week MA support now at 711. Consider this as a trapdoor for the stock market. These technical analysis concepts with the utilities are from Norm Fosback years ago; copies of his red cover Stock Market Logic book should be floating around somewhere. 

The 50-week MA is at 711 and price is at 759 so obviously this is bullish for the stock market. The blue line is at 738.38 the closing price from 15 weeks ago. As long as price remains above 738 for the week ahead, UTIL remains in a weekly uptrend and the bulls are happy. Bears need UTIL to drop below 738. Things get interesting for the week after which is 12/4/17 through 12/8/17 since the UTIL 15-week look back number is 746.48 shown by the brown line. Now we are getting more in the neighborhood of the utes potentially rolling over into a weekly downtrend. For now, the trend is up.

The red lines show negative divergence across all indicators so a spank down a la the June and September pull backs is likely on tap. The RSI is trying to sneak out a hair more juice but UTIL looks like it needs a rest. Stochs are overbot and agreeable to a pull back. The red rising wedge pattern is ominous since prices can collapse quite dramatically from a rising wedge.

Look at the big upside volume coming into the utes over the last month. Market geniuses pat each other on the back and tell one another to buy utilities since they are safe defensive plays that pay a divvy. What dolts. The central bankers have destroyed the expected business and economic cycles. The easy money has jammed all asset classes into overextended territories. In past economic cycles, sure, utilities and consumer staples were good places to hide in an economic and market downturn but not now. These sectors are pumped as high or higher than the broad stock market the opposite position they would be in if the economic cycles were functioning properly without non-stop central banker liquidity. If you are one of the Einstein's that invested heavy in utilities over the last month and told your wife that you are as smart a trader as Jesse Livermore, you are instead only covering yourself with a fig leaf and may want to rethink your strategy.

The ADX pink box verifies that UTIL is in a solid uptrend. Market bears need the ADX to drop sub 25 to show that the uptrend in utilities, on this weekly basis, is done. Note how price has violated the upper standard deviation band and then returned to the middle band over recent months. Price has violated the upper band again so the 739 is on the table and even the lower band at 766. Price is also extended above the moving averages requiring a mean reversion lower.

Taking a gander at the UTIL monthly chart, it displays a rising wedge pattern, overbot conditions, neggie d across all indicators, an upper band violation and overextended price above the moving averages; all these indicators are bearish. Thus, the stars are slowly aligning for the market bears.

Watch the UTIL 738 level for the week ahead and then starting Friday, 12/1/17, at 4 PM EST and all of the following week, watch UTIL 746. If these numbers fail, you know the stock market is slipping into big trouble ahead. If UTIL remains above 738 for the week ahead and 746 the week after, it is nothing but blue skies and rainbows ahead for the stock market bulls who will be singing "Happy Days Are Here Again" each day while sipping Fed wine. 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.

VXX Volatility Futures ETN Weekly Chart

The VIX flash crashes to a record low at 8.56 on Friday, 11/24/17, at the closing bell at 1 PM EST (early close on the day after Thanksgiving). The VIX recovered immediately in the flash crash and finished at 9.65. The global central bankers maintain their jackboots on the throat of volatility which creates perpetual lift in the stock markets.

The volatility ETF and ETN trading instruments are flawed. If you are a novice trader, or any trader for that matter, stay away from these plays on volatility since you will lose your money. A $10,000 play in VXX 6 years ago will get you 31 dollars and 64 cents today. Ditto for 3x ETF's; avoid all of these flawed tickers as well. Stick to single ETF's and if you feel adventurous perhaps give a 2x ETF a whirl but stay in this more sane sandbox.

Volatility is crushed lower year after year by the central bankers to maintain elevated stock markets. The central bankers are the 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 1-Minute Chart Flash Crash 11/24/17; VIX Prints Historic Low at 8.56

One minutes before the early closing bell at 1 PM EST on Friday, 11/24/17, the day after Thanksgiving, the bottom falls out of volatility. At 12:59 PM, the VIX flash crashes -12% from 9.68 to 8.56 an all-time record low. One minute later, the VIX rocket launches skyward directly back to 9.68 then price staggers sideways ending at 9.65. Trading volume in the VXX ETF spikes hugely higher (novice traders should not play volatility ETF’s or any 3x ETF’s since they will only take your money). VXX ends the session at 31.64.

This is a significant event in market history occurring in real-time. The VIX volatility fear gauge prints the lowest number ever at 8.56. The market behavior is becoming scary.

VIX ends the week at 9.65. The VIX prints an all-time low today at 8.56; an 8-handle! The global central bankers maintain their jackboots on the throat of volatility and voila; stocks move higher forever. Central bankers are holding their heads in their hands asking each other, “what have we done?” Chart is courtesy of Big Charts and annotated by Keystone. 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.