Thursday, October 26, 2017

VIX Volatility Daily Chart; Battle at 200-Day MA Bull-Bear Signal Line

According to the Keybot the Quant algorithm, volatility is the key parameter most impacting stock market direction currently. The quant identifies VIX 10.72 as a major bull-bear line in the sand. VIX is currently at 11.03 on the bear side. The stock market will continue lower as long as the VIX remains above 10.72.

Another key market signal is the VIX 200-day MA now at 11.22. Market bulls are in the game under 11.22 but market bears rule the stock market above 11.22.

Thus, use VIX 10.72 and 11.22 as the two key parameters for gauging broad stock market direction going forward. If the VIX drops below 10.72, the stock market will run higher to new record highs. If the VIX is between 10.72 and 11.22, like now, the stock market will stagger sideways with a downward bias. If the VIX moves above 11.22, stocks will sell off in force and market carnage will begin. 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 2:55 PM EST: VIX is at 11.23. As the Apollo 13 astronauts said, "Houston, we have a problem."

Note Added 6:12 AM EST Friday Morning, 10/27/17: VIX ends yesterday at 11.30 so the bears are happy. It is surprising that stocks did not sell off into the closing bell but with the tech heavyweights AMZN, GOOGL, MSFT and INTC reporting earnings, traders were willing to wait for the news. The tech companies hit the ball out of the park so S&P futures are up +7 with VIX at 10.81 pennies from the critical 10.72 level. This is key for Friday. As stated above, market bears will be okay as long as the VIX does not drop below 10.72. If the VIX moves below 10.72, Friday will be one big bull party with stocks joyously higher into the weekend. The VIX is at 10.81.......

Note Added 10:29 AM EST Friday Morning, 10/27/17: VIX drops below 10.72 so the bulls are cheering the stock market higher. VIX is at 10.67. The battle continues. The market bears have one last chance to stop the bulls if they can prevent the SPX from taking out today's high at 2574.60. If the bears can stop this and then push VIX back above 10.72 they can remain in the game. If the S&P 500 moves above 2574.60, and the VIX remains under 10.72, the bears are toast. SPX is at 2572.45. VIX 10.60.

Keybot the Quant Turns Bearish

Keybot the Quant algorithm flips to the short side yesterday at SPX 2565 about where the stock market sits now. The VIX 10.72 bull-bear line in the sand is key. Market bears are in control above VIX 10.72. Bull will rejoice if VIX drops under 10.72. VIX is currently printing at 11.04 moving towards 2 PM EST on Thursday, 10/26/17. As always, more information is found at Keybot's site;

Keybot the Quant

Tuesday, October 24, 2017

NIKK Nikkei Index (Japan) Daily Chart; 16th Consecutive High; Overbot and Extended RSI; Negative Divergence Developing; Upper Band Violation

On Tuesday, 10/24/17, the NIKK ends the session with the sixteenth record closing high at levels not seen since July 1996. The Nikkei Index gains +0.5% to 21805 closing at the high. The Topix gains +0.666%. The RSI is at a phenomenal 89+ at extremely overbot levels like the Dow Industrials in the United States. The indicators are overbot. The red lines show neggie d. Price has violated the upper standard deviation band. All these signals are bearish.

The middle band at 20923 and rising is on the table. The NIKK will likely trade with a jog move over coming days down, then back up for a higher higher high. At that time, check to see if the MACD line and RSI turn neggie d, if so, the top is in on this daily chart. Nikkei futures are higher going into the Wednesday trade.

The ADX shows the upside trend is strong in this daily time frame. The NIKK peaked above 38K in 1990. 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 Industrials Daily Chart; Elevated RSI

There is lots of chatter about the elevated RSI (relative strength index) in the major stock indexes especially the Dow Jones Industrials. The Dow RSI was up above 87 extremely overbot at levels not seen since 1955 and 1944. More recent overbot conditions show the tops for the 1987 crash, dotcom bubble crash, the financial crisis crash, and now. What do you think will happen? Note that it may take several months for stocks to top out and roll over after the elevated RSI's print, however, the RSI is already at elevated levels for several months this year. This information is for educational and entertainment purposes only. Do not invest based on anything you read or view here. Consult your financial advisor before making any investment decision.

SRX Seagate Daily Chart; Island Reversal

The Seagate chart is interesting since it displays an island reversal pattern. Price collapsed lower in July creating the gap-down move. Then STX spent the summer on the brown island. The island even had a green palm tree for shade. Price began moving higher in October and it looked like it would be a gap-fill move but instead price gapped higher above 38 creating the island reversal pattern. Price shot into the gap at 41 and may want to play around there for a little while. 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 Remains Long After Whipsaw

Keystone's proprietary trading algorithm, Keybot the Quant, is on the long side after a whipsaw move the last few days. Watch VIX 10.72 as the bull-bear line in the sand. Volatility is the top parameter impacting stock market direction currently. Market bears win big if the VIX remains above 10.72 heading higher. Bulls win big if the VIX drops under 10.72. As always, more information is found on Keybot's site.

Keybot the Quant

Friday, October 6, 2017

BPSPX S&P 500 Bullish Percent Index

The 6 percentage-point reversals and 70% level are key for the BPSPX indicator. In May, the double-whammy sell signal was short lived. The bulls send the BPSPX above 70 for a buy signal and the 6-point reversal occurs in early July for the double-whammy buy signal.

The bears fight back in August sending the BPSPX under 70 for a sell signal and then under 69.5 for a double-whammy sell signal. The stock market bottoms in August and the bulls rally stocks higher. The BPSPX moves above the 70 level and prints a 6-point reversal during September for a double-whammy buy signal which remains in play. The bulls are unstoppable with the central bankers and happy tax-cut talk pumping stocks higher.

The bulls are in good shape unless the BPSPX slips under 70 which would be a sell signal. If the BPSPX drops under 66.80 (72.80-6.00) a double-whammy sell signal would occur. For now, the bulls rule the stock market. This information is for educational and entertainment purposes only. Do not invest based on anything you read or view here. Consult your financial advisor before making any investment decision.

Note Added 10/24/17: The  bulls keep slapping the bears in the face. The BPSPX rises to 73.00 and is now at 762.40. So the bears need to send BPSPX under 70 to confirm downside mayhem and then below 67 to confirm downside carnage. Bulls are fine and on easy street above 70.

Wednesday, October 4, 2017

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

The SPX 2-hour chart is topping in the near-term. Note the firm negative divergence with the MACD, stochastics and money flow. The stoch's and RSI are overbot. The red rising wedge pattern is in play. Price has violated the upper standard deviation band so a move back to the middle band at 2517 and rising, at a minimum, would be needed. Price is at the top trend line of the upward-sloping blue channel and must decide to bounce above or die. All these factors are bearish.

The bulls are strong, however, and managed a higher high in the RSI. There is also some near-term juice in the MACD line. The SPX will not roll over until these two indicators go neggie d. Thus, a jog move is likely where price will fall for a candlestick, then come back up again for a higher high and at that time the RSI will likely roll over with neggie d and identify the near-term top. S&P futures are -1 about five hours before Wednesday's opening bell. 

So a jog move down then up then roll over, or, down then up then down then up then roll over is the likely outcome. The candlesticks are 2 hour trading increments. So the near term top for the stock market is from 2 to 8 hours away and more likely in about 4 hours which would be this afternoon.

Fed Chair Yellen speaks at 3:15 PM EST today with 45 minutes remaining before the closing bell. Yellen can extend the topping process by flapping her dovish wings. Always remember, the central bankers are the market. Otherwise, the expectation would be for stocks to top out today and fall into tomorrow.

The full moon peaks for the month at 2:40 PM tomorrow and stocks are typically bullish moving through the full moon. Perhaps a slight recovery will occur from Thursday afternoon into Friday morning when the Monthly Jobs Report is released. The bears are ready to take a turn at bat later today as long as Yellen does not take away the bat and ball with her typical 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.

Note Added 1:33 PM EST on Thursday, 10/5/17: As usual, Yellen flies in on her white dove promising easy regulations for banks. Although she did not comment directly on monetary policy, Yellen said the Federal Reserve is actively working towards reducing banking regulations especially for the regional banks. That is music to Wall Street's ears. Yellen's term ends on 2/3/18 so for the next four months she will be pumping the banks higher. Of course she will. If she retires in February, by next summer she will appear at a token luncheon hosted by Goldman Sachs or another investment bank where she will be handed $250K or more just like former Fed Chairman Bernanke. The Fed members are rewarded handsomely by the investment bankers for their dovish loyalty once they leave office. The  privileged elite class always protects their own. So the RSI places a higher high and you know that price is not yet ready to roll over. The SPX prints a higher high and the RSI and MACD slope higher now providing a little more upside juice. The stochastics and RSI remain overbot. The stoch's, MACD histogram, and money flow indicators remain neggie d and want to see price roll over to the downside. So the RSI and MACD line have to negatively diverge to place the near-term top so probably a jog move down then back up (where the RSI will likely go neggie d) then down then back up for another high (where the MACD line and all indicators should be neggie d) and the top will be in. Yellen squeezed out another dozen SPX handles by flapping her dovish wings concerning the banks. So the top is likely 2 to 4 candlesticks away which is 4 to 8 hours. The full moon peaks for the month at 2:40 PM only an hour away so stocks may remain buoyant today. The SPX near-term top target is tomorrow morning into tomorrow afternoon. The Monthly Jobs Report drops in the morning.

Tuesday, October 3, 2017

Keybot the Quant Turns Bullish

Keybot the Quant flips bullish last Friday but is now in position to flip back to the bear side. If the SPX drops below 2529 tomorrow, Keybot will likely flip short. As always, more information is found at Keybot's site;

Keybot the Quant

Monday, October 2, 2017

September Publication of the Daily Chronology of Global Markets and World Economics 2017-09 is Available from Amazon; Stock Market Record Highs; SPX 2519; INDU 22420; COMPQ 6498; NDX 6013; RUT 1494; NYA 12209; TRAN 9935; Hurricanes Harvey, Irma, Maria; Puerto Rico Devastated; Mexico Earthquake; Bitcoin 5000+; North Korea Tests H-Bomb; London “Bucket Bomb” Terror Attack; Brent Oil Golden Cross; Apple Unveils iPhone 8 and X (10); German Chancellor Merkel Wins Reelection

The September Publication of the Daily Chronology of Global Markets and World Economics 2017-09 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 for individual stocks around the world. The world is awash in central banker liquidity so all asset classes continue floating ever higher.

September Cover Highlights;
SPX 2519, INDU 22420, COMPQ 6498, NDX 6013, RUT 1494, NYA 12209, TRAN 9935

The September chronology highlights the non-stop all-time record breaking stock market highs in all seven major indexes. Bitcoin prints above 5000 but retreats as China places more restrictions on cyber currencies. Brent oil prints a golden cross stock chart pattern indicating more new highs ahead although West Texas Intermediate Crude oil has not printed a golden cross as yet.

The daily Whitehouse drama continues with 16 key personnel changes occurring after only eight months an unprecedented revolving door. North Korea tests an H-Bomb that rocks the world. London is hit with another terrorist attack. German Chancellor Merkel is reelected.

Hurricanes slap the Caribbean Islands and United States. Puerto Rico and the Virgin Islands are destroyed. Mexico is hit with a major earthquake.

Appple unveils the new iPhone 8 and X (pronounced 10) models. The iPhone X has a new fancy facial recognition system that failed during the stage presentation. Production problems are occurring with the iPhone X as the facial recognition sensors are not working as well as expected.

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.

As always, all monthly publications of the Daily Chronology of Global Markets and World Economics are available from the links in the margins of the K E Stone blog sites or simply searching on Amazon or Google. The monthly 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 October 2017-10 chronology is tentatively set for publishing by Amazon on Saturday, 11/4/17.

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