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.

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

The SPX 2-hour chart morphs into another sideways triangle after the Yellen Rally breakout on Wednesday. The tight bands in the previous chart squeezed out a 30-point move from bottom to top for the SPX. The SPX remains above the 200 EMA on the 60-minute chart at 2351 which forecasts a bullish stock market for the hours and days ahead. Market bears need SPX under 2351 to create strong selling pressure. Since 2351 is also strong price support, if it fails, there will be market carnage. If the SPX remains above 2351, the bulls will keep smoking expensive Cuban cigars flicking the ashes in the bear's faces.

The vertical side of that sideways symmetrical  triangle is 50 points. Thus, a breakout above 2381 will target 2431 and a breakdown from 2368 will target 2318. So if the bottom trend line of the triangle fails, watch 2351 and if that fails, 2318 is the likely destination. 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 30-Minute Chart; 8/34 MA Cross; Sideways Channel

The 8/34 MA cross on the SPX 30-minute is a very useful short-term signal. The bears turned the markets negative on the 14th which was Tuesday, however, Fed Chair Yellen arrived on Wednesday flapping her dovish wings after invoking a hawkish hike. Markets are happy there are no surprises and with at most two rate hikes on tap this year with an accommodative Fed running the show, traders are buying stocks with both hands. The SPX rockets higher for the Yellen Rally creating the positive 8/34 cross and confirming the upside party for the hours ahead. The central bankers are the market.

The SPX runs from 2357 to 2390 and now retreats to 2379 and, as fate would have it, between the 8 MA at 2380 and 34 at 2378. The hour or so ahead will tell a lot about market direction. A negative 8/34 MA cross may be on tap in about one hour or so which would be expected to flush the stock market lower. Price may want to return to that sideways triangle through 2358-2378.

By definition, to avoid the negative cross, the bulls must immediately curl the 8 MA higher up and away from the 34 MA to rally the stock market. This can only occur by price running above 2380 and higher to pull the 8 MA higher. If the SPX instead sinks lower through 2378 and lower, the negative 8/34 cross is guaranteed and bears will throw confetti. Who will win and dictate the path ahead for stocks over the coming hours? 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 12:23 PM: The SPX is at 2382 trying to breakout higher. This action will curl the 8 MA higher and punch the bears in the face. If bears want it they better step in fast and push the SPX lower, otherwise, the stock market will stage a rally into the closing bell.

Note Added 2:44 PM: The SPX is at 23824 continuing to breakout higher. The bulls have succeeded in curling the 8 MA higher. One bull steps up and puts his cigar out in the middle of a bear's forehead. The 8 MA is at 2382 so the bears need to pull the SPX price below 2382 pronto to try and curl the 8 MA downward again to set up a negative 8/34 cross. For now, the 8/34 cross remains positive with the 8 above the 34 so the market bulls dance and sing with glee.

VRX Valeant Pharma Weekly Chart; Oversold; Falling Wedge; Positive Divergence

Activist investor Bill Ackman at Pershing Square finally threw in the towel with Valeant exiting the VRX stock after riding it down from 270 to 10 a -96% crash in 18 months. Ackman lost his shirt but he had other trades that performed well. Anyone that has traded a long time will tell you that the moment you capitulate is comically when the bottom occurs. Ackman has officially given up on VRX but humorously, the monthly and weekly charts are set up with falling wedges, oversold conditions and universal positive divergence for all indicators (all bullish indications).

Price tags the lower standard deviation band so the middle band at 15.14, or higher, is on tap going forward. Price is extended below the moving averages and desperately needs a mean reversion higher. VRX should pop over the next week or three and then continue choppy sideways performing a basing pattern going forward.

As Ackman runs for his life with his shirt in tatters and his pants torn, hedge fund ValueAct Capital steps up to the plate buying VRX shares now owning more than 5% of the troubled pharma company. ValueAct has been involved with Valeant for 11 years rotating in and out of the shares many times. Judging by the chart, it appears that ValueAct is putting on a smart trade taking a chance on the recovery that is forecasted by the chart above.

If Valeant recovers sharply, Ackman's television set will have to be turned off and all sharp objects will need to be removed from sight. VRX will likely recover to the 15-20 area in the weeks and months ahead. Keystone is not in VRX but may nibble on some shares on the long side after looking for an entry point in the coming days or week or so. 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, March 16, 2017

HYG High-Yield Corporate Bond ETF Daily Chart

The high-yield instruments are slapped silly over the last three weeks. The smackdown is reflected in the HYG and JNK charts. Rising wedges are very ominous patterns and price was spanked lower starting this month. The RSI and stochastics were overbot and the chart indicators are all neggie d (red lines) wanting to see a spankdown, which occurs. Remember the October spankdown Keystone described back then and played on the short side? Keystone was not paying attention and missed the top this time in the high yield arena.

HYG was at the top standard deviation band so a move back to the middle band would be expected which happened very quickly and price continued dropping to the lower band at 86. HYG bounces strongly yesterday on the Fed announcement tagging the middle band at 87.35 which is also the 20-day MA.

Concern surfaces in the high-yield instruments since much of the paper is exposed to the oil and gas industry. As oil prices drop, fear grows that energy companies will not be able to service their debt. If any companies then default or restructure this will negatively impact the high-yield instruments. Perhaps as much as 30% of the paper may be exposed to the oil and gas industry. There is also a lot of troubled paper exposed to the retail industry that has stores going belly-up each day.

The HYG weekly chart topped out with neggie d across all indicators so this creates a gloomy picture ahead for price. The HYG monthly chart is also uninspiring for the intermediate and long term. HYG and JNK would be expected to trade choppy at these elevated levels for a couple months but then likely roll over for extended downside for weeks and months ahead. This information is for educational and entertainment purposes only. Do not invest based on anything you read or view here. Consult your financial advisor before making any investment decision.

USD US Dollar Index Daily Chart; Sideways Channel and Triangle

The US dollar slips lower after the Fed rate decision yesterday. USD is at 100.64 currently moving lower. The lower dollar sends gold, silver and other metals and commodities higher. The chart above is a big bowl of spaghetti but each line provides a clue.

The ADX shows that the strong upside trend in the dollar petered out in early December. The overbot conditions, rising wedge and negative divergence (red lines) create the spankdown off the top to begin the year. Remember at that time, when Keystone pointed out the top in the charts which coincided with everyone and his brother, even the taxi cab driver, proclaiming that the dollar was going to explode higher from 103-104. The consensus is usually wrong. That was three months ago.

The USD dropped in January through the falling wedge with ovebot stochastics and positive divergence (green lines) bouncing price. The RSI did not reach oversold levels. The USD moves higher and in early March tags the upper brown channel trend line and the upper trend line for the purple sideways symmetrical triangle and violates the upper standard deviation band. The dollar retreats to the middle band and then to the lower band at 100.46 and lower so the middle band up at 101.33 is on the table.

The ADX, sideways 50 and 200-day MA's and price movement indicate a sideways move ongoing with price. If the USD moves sideways, then so does the euro. This morning, the dollar bounces slightly off the bottom standard deviation band and off the lower trend line of the purple sideways symmetrical triangle.

Price is teasing around the 50-day MA at 101.04. The 200-day MA is 98.24. It would not be unreasonable to see the US dollar index move sideways through this 98-101 range going forward and ultimately choosing a future direction depending on which side of this moving average bracket that price exits. In the nearer term, the purple triangle is in play with a vertical side in December at about 6 handles. Thus, if price falls under the 100.3-ish level, the 94-96 area will be targeted. If price breaks out above 101.8-ish, the dollar will seek the 106-108 area.

Use the brown channel lines as another indicator as to whether the dollar bulls will win (above 102) or the dollar bears (below 99). The battle rages on between 99 and 102.

The USD monthly chart is extremely telling displaying negative divergence across all chart indicators for the move higher in price over the last two years. This chart set-up should pressure the USD for many months ahead and lends credence to the idea above that the dollar may move sideways through the 50 and 200-day MA bracket for the weeks and months ahead. The projection at this time would be for the USD to move sideways through 95-101 for the rest of the year; probably choppy sideways with a steady slightly downward bias as the weeks and months play out.

The euro call is the mirror image of the dollar since these currency baskets contain majority weightings of each other's currency. The euro will likely move sideways through the remainder of the year with a steady slightly upward bias as the weeks and months play out (say, though 105-113). The euro is currently at 1.0719. The USD is at 100.55, moving lower, as the above windbag commentary is typed. Remember, the middle band at 101.33 is in play in the very near term. 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 on Friday, 3/17/17: The USD is at 100.33. The USD fell to 100.14 a few hours ago teasing a 99-handle. Euro is at 1.0747. ECB’s Ewald Nowotny hints that a rate hike may be on the come sooner than expected so the euro is buoyant at 1.0781 earlier this morning and backs off to 1.0747. Analysts and traders expect the European Central Bank to adjust rates higher in 2019 but Nowotny hints that perhaps that may be pulled forward to September 2018. Nowotny opines about whether to raise rates or end QE first. The comments are in keeping with the euro moving sideways going forward.Central banker words move markets. The central bankers are the market and have been since March 2009. 

Monday, March 13, 2017

SPX S&P 500 2-Hour Chart; Sideways Symmetrical Triangle; Tight Standard Deviation Bands

The 2-hour chart is interesting. Look at the pink standard deviation lines coming in tight ready to squeeze out a huge move (pink arrows). Tight bands do not forecast direction only that a large move is likely on tap at anytime. Note the prior tight bands in late February popped that move higher about 40 points in a flash.

The blue sideways symmetrical triangle is in play with price squeezing in tight having to make a decision up or down. The vertical side of the triangle is about 45 handles so that jives with the magnitude of the move from the last tight band squeeze. Thus, there should be a 40 to 45 handle move coming in the SPX.

Something very interesting is that the bands have already squeezed in as tight as late February ready to begin a wild price move one way or the other, however, the Fed rate decision, which will be an epic market event, is on Wednesday afternoon. That would be about 4 or 5 of the 2-hour candlesticks. Can price travel through that tight standard deviation tunnel for another 4 or 5 candlesticks? It does not seem so. It seems that price may decide on direction before the Fed announcement.

Also, price may pull a fast one. The initial move from the triangle may be a fake-out. These patterns are sneaky where they hint at moving one way but then reverse quickly and reenter the triangle and push out the other side for the true directional move so you have to stay alert.

Let's just say price is at 2370-ish so the downside target is 2325-2330 and the upside target is 2410-2415; probably one of these results will print by Friday. The chart is not providing any hints on direction. Simply watch to see if price move above the top triangle trend line and then above the outer band at 2376, or, if price collapses out the bottom trend line of the triangle and below the lower band number at 2362. Since the chart hints that the move may happen before the Wednesday afternoon activities, perhaps some wild news occurs tomorrow impacting markets?

Bulls have favorable seasonality factors. Stocks were buoyant moving through the full moon on the weekend as expected. During OpEx week a Tuesday low typically leads to a Wednesday high. Stocks are typically bullish heading into a Fed meeting decision. Perhaps oil or geopolitics will create drama on Tuesday? The tension mounts. The circus is coming to town on Wednesday. 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, March 12, 2017

SPX S&P 500 Weekly Chart; Rising Wedge; Overbot; Negative Divergence Developing; Price Extended

The SPX retreats last week due to the neggie d with the histogram, stochastics and money flow. The stoch's and RSI are overbot. The red rising wedge pattern is ominous since the collapses from rising wedges can be quite dramatic. The RSI and MACD were long and strong as price printed the high shadow in the candlestick for the record high at 2400 so these two indicators would like to see price come back up again for a matching high so they have a chance to negatively diverge and identify the top.

The guess would be a jog that is down one week, up one week, down one week, up one week and at this time the MACD line should be neggie d and price will begin rolling over for an extended multi-week downtrend. That places the top on this weekly basis at the beginning of April or anytime sooner.

The W pattern bottom shows a base at 1850-ish and breakout area from 2100. That is a 250-point difference so the target for the W pattern after the breakout from 2100 is 2350 which was achieved to satisfy the pattern. The breakouts from W patterns, or say a C&H pattern, typically follow a similar structure. When going long there are three buy points; one at the breakout, then one when price comes back to back kiss the breakout line and then another buy when price takes out the initial breakout high (circles).

The brown lines show a gap at 2351-2355 that will need filling. The SPX is on an island above 2355 and may print an island reversal pattern when price comes down. The S&P is above the moving average lines requiring a mean reversion lower.

The expectation would be choppy sideways for three weeks and as soon as the MACD rolls over with neggie d, stocks will roll over to the downside. On the SPX monthly chart, the indicators remain universally in negative divergence over the last four years, however, the Trump Rally momentum juice carries price higher in the nearer term. The monthly chart would be agreeable to printing a multi-year top anytime between now and say, May or June. The weekly chart will top out as described above so the charts can be reviewed again as they progress

It is likely prudent to keep scaling out of long positions. Once the stock market peaks and rolls over in the weeks ahead, it may not return to current levels for a few years. It will be interesting to watch play out; Keystone will describe the action as it occurs. The Fed rate decision and Chair Yellen press conference is on Wednesday and will move markets; it will be an epic and historic day for the stock market and global economics. This information is for educational and entertainment purposes only. Do not invest based on anything you read or view here. Consult your financial advisor before making any investment decision.

SPX S&P 500 Support, Resistance (S/R), Moving Averages and Other Key Levels for Trading the Week of 3/13/17

SPX (S&P 500) support, resistance (S/R), moving averages and other important levels are provided for the trading week of 3/13/17. Levels shown in bold are strong resistance and support. Bold and underlined levels are very strong and important S/R.

For the S&P 500 in history, the all-time record high print is 2400.98 on 3/1/17 and the all-time closing high is 2395.96 on 3/1/17. The all-time record intraday low is 666.79 (the infamous 666) on 3/6/09 and all-time closing low is 676.53 on 3/9/09.

For 2017, the intraday high is 2400.98 and closing high is 2395.96. For 2017, the intraday low is 2245.13 from the first trading day of the year on 1/3/17 and the closing low for the year thus far is at 2257.83 on 1/3/17. For 2016, the intraday high is 2277.53 on 12/13/16 and closing high at 2271.72 on 12/13/16. For 2016, the intraday low is 1810.10 on 2/11/16 and the closing low for 2016 is 1829.08 on 2/11/16. The intraday low in 2015 is 1867.01 on 8/24/15 and closing low for 2015 is 1867.61 on 8/25/15.

The upside orgy in the stock market hit a peak on March 1st when the SPX tags the 2400 round number printing the highest price in the S&P 500 in history. The Dow Jones Industrials print above 21K. The band is playing, “Happy Days Are Here Again.” Stocks retreat the last few days and  bounce off the 20-day MA at 2361 and rising.

The SPX price remains above the 20-day MA above the 50-day MA above the 100 above the 150 above the 200. The moving average ribbon is stretched to the upside and price needs a mean reversion lower. The S&P 500 has not touched the 50-day MA since early November when the big-time Trump Rally started. The 50-day MA is 2310.

The full moon peaked yesterday; stocks are typically bullish moving through the full moon. The epic Federal Reserve rate decision and Chair Yellen press conference is on Wednesday afternoon. Typically, stocks are bullish moving into the FOMC meeting decision. The week ahead is OpEx with Quadruple Witching on Friday so a Tuesday low in stocks should lead to a Wednesday high. The seasonality factors favor bulls early in the week into the Fed decision. The NYMO is super low and hints that a recovery rally should occur for stocks in the daily time frame.

The month of March begins at 2364. The year began at 2239. The week begins at 2373.

For Monday, 3/13/17, with the S&P 500 beginning at 2373, the bears need to push the SPX under 2363 to accelerate the downside; price will quickly fail into the 2350’s to test the strong support at 2355 and 2351. That is a huge air pocket from 2322 to 2351 so if the 2351 fails, look out below, price will probably flush very quickly to 2322 causing trader angst. The 200 EMA on the 60-minute chart is at 2343; if this level is lost, stocks will drop like a rock.

The market bulls need to push up through that 2375-2377 resistance and price will accelerate to 2380 in a heartbeat then try to chomp through the 2380-2384 resistance gauntlet. If price sneaks above 2384 then it is likely going to 2395-2396 for new record highs. A move through 2364-2376 is sideways action to begin the week.

The Federal Reserve rate decision is historic on Wednesday. It will be an epic day in market history. Trading between 2 PM EST and the closing bell at 4 PM EST on Wednesday, 3/15/17 will be a circus. Strike up the calliope.

The strongest support/resistance is 2401, 2395-2396, 2380, 2373-2375, 2368, 2365, 2363, 2355, 2351, 2322 and 2311.
Note: If the list below displays any blank spaces, view it in a different browser. The data is current up through 2/20/17.

2401 (3/1/17 All-Time Intraday High: 2400.98) (3/1/17 Intraday High for 2017: 2400.98)
2396 (3/1/17 All-Time Closing High: 2395.96) (3/1/17 Closing High for 2017: 2395.96)
2378.80 Previous Week’s High
2376.86 Friday HOD
2372.60 Friday Close – Monday Starts Here
2363.64 March Begins Here
2363.04 Friday LOD
2361.37 (20-day MA)
2354.54 Previous Week’s Low
2343.02 (200 EMA on 60-Minute Chart a Keystone Market Turn Signal)
2310.28 (50-day MA)
2278 (12/13/16 Intraday High; 2277.53)
2272 (12/13/16 Closing High: 2271.72)
2259.44 (20-week MA)
2258 (1/3/17 Closing Low for 2017: 2257.83)
2249.32 (100-day MA)
2245 (1/3/17 Intraday Low for 2017: 2245.13)
2239 (12/30/16 Closing Low: 2238.83)
2238.83 Trading for 2017 Begins Here
2234 (12/30/16 Intraday Low: 2233.62)
2221.07 (150-day MA; the Slope is a Keystone Cyclical Signal)
2219.06 (10-month MA)
2213 (11/25/16 Intraday and Closing High: 2213.35)
2196.07 (12-month MA; a Keystone Cyclical Signal) (the cliff)
2195.08 (200-day MA)
2194 (8/15/16 Intraday High: 2193.81)
2191 (12/1/16 Closing Low: 2191.08)
2190 (8/15/16 Closing High: 2190.15)
2187 (12/1/16 Intraday Low: 2187.44)
2175.53 (50-week MA)