Monday, January 30, 2017

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

A key ST (short term) market indicator is the 200 EMA on the 60-minute chart now at 2264.80 and slight rising. The SPX is above 2265 so the bulls have no cares or worries. They laugh each day at the bear's feeble attempts to create selling pressure. As long as the SPX remains above 2264-2265, the bulls are in full control. Market mayhem, however, begins under 2264.

The LOD today was 2268 in the neighborhood of the 200 EMA. Price bounced but the RSI and MACD line remain weak and bleak wanting to see another lower low in this hour time frame. Perhaps price will come down to shake hands with the 200 EMA and make a bounce of die decision which will dictate broad market direction for the days ahead.

The brown lines show strong S/R at 2298, 2278, 2272, 2263 and 2234. The 20-day MA is 2273. The 200 EMA on the 60-minute is 2265. The 50-day MA is 2247It would be reasonable for price to test the strong 2278 support and decide to bounce or die.

The SPX gapped-up higher last week from 2282 to 2290-ish. This placed price on an island. The SPX liked hanging out on this Gilligan's Island for a few days but faced the edge of the island this morning at the opening bell. Price collapsed straight back down through the gap creating an island reversal pattern.

The 200 EMA is for all the marbles. Bulls are enjoying each day of life always rewarded by the central bankers with price above 2265. However, the bears are plotting revenge which begins below 2264-2265 where the wheels would fall off 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.

Barron's Boast of "Next Stop Dow 30,000" Sinks the Markets?

It is well documented over the decades how overly euphoric magazine covers tend to identify market tops while doom and gloom covers identify market bottoms (contrarian indications). On the weekend, Barron's proclaims, "NEXT STOP DOW 30,000." Is this the kiss of death for the stock market? Humorously, equities retreat today. Perhaps Barron's unwittingly called a market top?

Keybot the Quant Turns Bearish

Keystone's proprietary trading algorithm, Keybot the Quant, flips to the short side this morning at SPX 2282. Price ends the day at 2281. Bears need UTIL below 655 to unleash market carnage. Bulls need RTH above 76.55 to create upside rally joy for stocks and perhaps whipsaw Keybot back to the long side. One side or the other will likely win tomorrow. More information is on Keybot's site;

Keybot the Quant

SSEC Shanghai Index Weekly Chart; Sideways Symmetrical Triangle

The Chinese are having a good time all weekend long into this week, drunk as skunks, staggering around, setting off commercial-scale fireworks in the streets, celebrating the Lunar New Year, the Year of the Rooster. Cock-a-doodle-do. It is great they can escape for a few days from the realization that their lives are dictated by a few communist leaders hiding behind a curtain in Beijing.

Everyone will need to party-hardy since a day of reckoning may be at hand for the Chinese stock market. At the same time, a day of euphoric glory may be on the come. The sideways symmetrical triangle is in play. The SSEC has to make a major up or down decision and the direction move will likely be epic (over, say, the next couple years). The moving averages are lining out sideways. The standard deviation bands are in tight forecasting a major move coming.


China is burning through their reserves to manipulate the yuan currency and to maintain the SSEC above the 2800-3000 level for the last couple years. The reserves are now under $3 trillion. Since China does not disclose its financial system, it is difficult to know how long the cash will hold out. China has to keep a portion on hand to maintain stability in banks and confidence in the financial system. This is likely at least one-third or more. More cash must be kept on for other ongoing government affairs. Thus, the Chinese reserves may only have a year or two of juice available. Unfortunately, this cannot help provide an educated guess on which way the chart will break. China's PBOC may goose like madmen and the upper targets may be achieved before a huge rollover. Or, perhaps fear develops that China's reserves are far lower than reported and they are in deep trouble which exacerbates a collapse lower beginning in the nearer term.

The sideways symmetrical triangle has a vertical side at about 2450 points. The shorter vertical line only using the price moves on the downside of the 2015 peak is about 1500 points. Thus, if you use 3160 as a pivot point, where price either begins trending lower, or higher, to break from the triangle, the upside target is 4660-4810 and the downside target is 1510-1660. Our friends in China need to drink up and enjoy the next couple days since this year may be a crazy ride. The trend breakout will likely be confirmed to the downside with a drop under the 200-week MA at 2812 and the upside breakout can be confirmed by taking out the 3700-ish resistance. The Beijing communist leaders continue frantically puling at levers behind the curtain. 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; Risinig Wedge; Negative Divergence Developing; Upper Band Violation

The red lines show the rising wedge patterns in place; take your pick. Price has  moved into the apex of the rising wedge. The red lines for the indicators are negatively diverged wanting to see a spank down in the weekly time frame, however, the MACD  line remains long and strong wanting to see another higher high in price after any pull back. The MACD line hints that a jog move is likely needed, down, then back up to a matching or higher high, then roll over to the downside, on a weekly basis, as long as the MACD negatively diverges when price comes back up 2 or 3 weeks out.

The other thing to watch is the RSI that is dead flat. This can be called negative divergence but if that RSI sneaks a smidgeon above the prior high from a month ago, the bulls will  have more upside juice for a few more weeks and the RSI may want to explore the overbot territory. This does not have to happen. If the RSI remains flat as the MACD line rolls over with negative divergence then the SPX will be cooked.

The ADX had called the market sell from mid-2015 into early 2016 a strong trend lower for price (pink box). Interestingly, this entire one-year upside rally, of course induced by the central bankers which has been the case for the last eight years, is NOT a strong trend. This is surprising considering the long time for the rally and drastic move higher from the 1800's to 2300. The central bankers are pumping stocks higher not the market fundamentals. The central bankers are the market.

Market bulls need the ADX to move above 20-25 to prove that multi weeks and months of upside rally joy is ahead. Otherwise, price will roll over to the downside as the impact of a weak trend takes hold.

The pink arrows show the tight band squeeze that popped price skyward. Tight bands do not predict direction they only tell you that a big move will occur, and the bulls won again. The SPX has violated the upper band (pink) so a move back to the middle band, which is also the 20-week MA, at 2200, and rising, is in play.

The expectation is for a jog move ahead; down for a week or two, then back up for a week or two for another higher high in price to satisfy the long and strong MACD line, then roll over to the downside on this weekly basis. The caveat is the RSI so watch it closely over the next couple weeks. Bears need the RSI to start heading south.

Marrying the above with the SPX support/resistance information in a prior post, and considering the weekly basis and intermediate term, price will seek the middle band at 2200 and rising which matches up with the strong 2205 support level. If the bulls can keep stringing the game out further, the strong support at 2213 would be another downside target. There is a big-time air-pocket at 2214-2234 so if 2234 fails, look out below.


A logical expectation is for price to sell off for a week or two. There may be faux worry exhibited by traders but many will probably buy the dip sending price back up to satisfy the MACD. At that point is where the roll over likely occurs so perhaps an intermediate top coming in February. Once the downside begins, the expectation would be for price to target the 2205-2234 landing zone perhaps around Valentine's Day. At that point, if you remain stubbornly-long, you may need your honey to ease your pain. 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 Wedges; Negative Divergence; Upper Band Violation

There is a lot going on in the spaghetti above. The red lines show the rising wedge pattern in place; price has  moved into the apex of the rising wedge. The red lines for the indicators are negatively diverged wanting to see a spank down. Stochastics are overbot. RSI is not overbot but was six weeks ago as the rally was in full force. All of this is bearish.

The ADX had called the rally move in November and December a strong uptrend (pink box) but two weeks ago the ADX loses the strong trend status. Price may be printing new highs but the rally is NOT in a strong uptrend any longer. Bulls will  need the ADX to jump up to +28 and higher again.

The pink arrows show the tight band squeeze that popped price skyward. Tight bands do not predict direction they only tell you that a big move will occur, and the bulls won again. The SPX has violated the upper band (pink) so a move back to the middle band, which is also the 20-day MA, at 2272, and rising, is in play.

Marrying the above with the SPX support/resistance information in the prior post, the 2292 level, last Friday's low, is the first test of support. The SPX begins the week at 2295. S&P futures are weak overnight and down -6 a couple hours before the opening bell for the new week of trading. The 2292 rupture will send price to 2289 immediately, then a test of 2285 would be next. If that fails 2282 support is next and then a gauntlet of strong support at 2277-2279. It would be a big deal if 2277-2279 fails; this would be a logical place for a bounce to occur so if it does not, price will collapse to the 2271-2275 level which envelopes the middle standard deviation band and 20-day MA at 2272 and rising. The SPX likely has a date with 2272-2275 this week where price would make a bounce or die decision. This information is for educational and entertainment purposes only. Do not invest based on anything you read or view here. Consult your financial advisor before making any investment decision.

Note Added 8:27 PM EST Monday Evening: The SPX sells off today but recovers into the closing bell ending at 2281. The LOD is 2268. The test of 2272-2275 came quickly and price bounced and then ended the day at that 2282 S/R level. If you look back at the SPX Support/Resistance missive, you see the support at 2268-2269 and that is exactly where price bounced from. This level now carries more clout going forward. The key short-term signal is the 200 EMA on the SPX 60-minute chart at 2264-2265. Market bulls are not worried since this critical 2264-2265 held. Also, the VIX bounced but at 11.88 remains below the critical 200-day MA at 14.06 an important market direction signal. Bulls have their feet up on the desk and are smoking expensive Cuban cigars, dabbing the ashes into the faces of huddled masses, while sipping Fed wine and ECB champagne. Bulls will panic if SPX loses 2264 and VIX moves above 14 since stocks will be collapsing. Until then, the bulls are drinking and singing without a care in the world; the hula girls are swaying.

SPX S&P 500 Daily and Weekly Charts; Over Extension Above Moving Averages


The SPX daily chart shows price above the 20-day MA  above the 50 MA above the 100 above the 150 above the 200. The SPX weekly chart shows price above the 20-week MA above the 50 MA above the 100 above the 150 above the 200. The moving averages are above each other and price is up at the tippy-top with its face pressed into the ceiling. A mean reversion lower is desperately needed where price comes back down to earth to kiss a moving average or two.

Further, which is very important for those managing money long term, the SPX monthly chart shows price above the 20-month MA above the 50-mth MA, above the 100 MA  above the 150 above the 200. The charts indicate that a multi-year top for the stock market is very likely to occur in the weeks and months ahead. If you are Joe Six or Ma and Pa Kettle, or Aunt Jane or Uncle Paul, it is likely prudent to scale-out of the long side positions as the weeks play which is the opposite of what the television pundits say.

Just think, in a year or two, or three, price has to return to earth and when it does the moving average ribbon rolls over to the downside as well. In the future, the SPX will be under the 20 under the 50 under the 100 under the 150 under the 200. You can imagine how far down that will be. This information is for educational and entertainment purposes only. Do not invest based on anything you read or view here. Consult your financial advisor before making any investment decision.

Note Added 8:38 PM EST Monday Evening: The SPX sells off today but recovers into the closing bell ending at 2281. The LOD is 2268 and price tags the 20-day MA at 2273; at least one moving average was back kissed today, for now.

Sunday, January 29, 2017

SPX S&P 500 Support, Resistance (S/R), Moving Averages and Other Important Levels for Trading the Week of 1/30/17

SPX (S&P 500) support, resistance (S/R), moving averages and other important levels are provided for the trading week of 1/23/17. 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 2300.99 on 1/26/17 and the all-time closing high is 2298.37 on 1/25/17. 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, this year, the intraday high is 2300.99 on 1/26/17 and closing high is 2298.37 on 1/25/17. 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 stocks continues into the New Year. The central bankers keep pumping stocks higher and the new found optimism and euphoria around President Trump’s proposed lower taxes, less regulation and huge infrastructure spending ignites the afterburners.

The new moon peaked last Friday night and stocks are usually bearish moving through the new moon. On Sunday evening, as this message is typed, S&P futures are down 7 indicating a soggy open to begin the week but there are many hours before stocks open for trading on Monday morning.

A trio of central bankers report policy decisions this week. The Three Stooges are the BOJ providing a decision on Tuesday, the Fed on Wednesday and the BOE on Thursday morning. Consumer Confidence data is key on Tuesday morning. The US Monthly Jobs Report is on Friday morning. The EOM (end-of-month) is Tuesday so the monthly charts receive new data points. The month and year began at 2239 so it appears the bulls may paint a positive month to begin the year unless stocks collapse over the next two days.

For Monday, 1/30/17, with the S&P 500 starting at 2295, the market bulls need to push above 2299 and the upside will immediately jump several handles higher. The bears need to push the SPX under 2292 to accelerate the downside. A move through 2293-2298 is sideways action for Monday.

If the bulls print above 2299, price will slice up through the 2301 all-time high like a hot knife through butter and would probably not look back until 2305 and higher. If the bears take price under 2292, the SPX will target the 2285 support in a flash. If 2285 fails, 2282 will be tested next and if that fails price will set its sight on that gauntlet of strong support at 2279-2281. Under that is the strong gauntlet of support at 2271-2275.

Stocks will be in big trouble if the 200 EMA on the 60-minute at SPX 2264 fails but the bulls are 30 points above in control of the stock market and not worried. Markets will fall apart under 2264.

The strongest support/resistance is 2301, 2298, 2278, 2272, 2262, 2234, 2213, 2205 and 2194. The week begins at 2295. Note the big air pocket between 2213 and 2234.

Note: If the list below displays any blank spaces, view it in a different browser. The data is current up through 1/29/17.

2330
2325
2320
2305
2301(1/26/17 All-Time Intraday High: 2300.99) (1/26/17 Intraday High for 2017: 2300.99)
2300.99 Previous Week’s High
2300
2299.02 Friday HOD
2299
2298 (1/25/17 All-Time Closing High: 2298.37) (1/25/17 Closing High for 2017: 2298.37)
2297
2295
2294.69 Friday Close – Monday Starts Here
2294
2292
2291.62 Friday LOD
2289
2285
2282
2280
2279
2278 (12/13/16 Intraday High; 2277.53)
2277
2276
2275
2274
2273
2272 (12/13/16 Closing High: 2271.72)
2271.53 (20-day MA)
2271
2270
2269
2268
2265
2264.07 (200 EMA on 60-Minute Chart a Keystone Market Turn Signal)
2263
2260
2258
2257.02 Previous Week’s Low
2254
2252
2249
2245.45 (50-day MA)
2245
2241
2239 (12/30/16 Closing Low: 2238.83)
2238
2234 (12/30/16 Intraday Low: 2233.62)
2214
2213 (11/25/16 Intraday and Closing High: 2213.35)
2212
2211
2210
2209
2207
2206
2205
2202
2200.05 (20-week MA)
2200
2199
2238.83 January Begins Here; Trading for 2017 Begins Here
2198
2195.51 (100-day MA)
2195
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)
2185
2183
2182
2181.37 (150-day MA; the Slope is a Keystone Cyclical Signal)
2179
2178
2175
2174
2173
2170
2169
2166
2165
2164
2163.24 (10-month MA)
2163
2160
2157
2156.22 (200-day MA)
2155
2152
2151
2050.37 (150-week MA)
2150
2146
2140
2135.37 (12-month MA; a Keystone Cyclical Signal) (the cliff)
2135 (5/20/15 Intraday High: 2134.72)
2133.25 (50-week MA)
2133 (7/20/15 Intraday High 2132.82)
2131 (5/21/15 Closing High: 2130.82)
2132
2130 (6/22/15 Intraday High 2129.87)
2129
2128 (7/20/15 Closing High: 2128.28)
2126 (4/27/15 Intraday High: 2125.92)
2124 (6/23/15 Closing High: 2124.20)
2123
2121 (4/24/15 Intraday High: 2120.92)
2120 (2/25/15 Intraday High: 2119.59)
2118 (4/24/15 Closing High: 2117.69)
2117 (3/2/15 Closing High: 2117.39)
2116 (11/3/15 Intraday High: 2116.48)
2115
2114
2113
2111 (4/20/16 Intraday High: 2111.04)
2110 (11/3/15 Closing High; 2109.79)
2109
2108
2107
2105
2104 (12/2/15 Intraday High: 2104.27)
2103 (12/2/15 Closing High: 2102.63)
2102 (4/20/16 Intraday High: 2102.40)
2100
2099
2097
2094 (12/29/14 Intraday High: 2093.55)
2091.38 (20-month MA)
2091 (12/29/14 Closing High: 2090.57)
2089
2087.31 (100-week MA)
2086
2085 (11/4/17 Closing Low: 2085.18)
2084 (11/4/17 Intraday Low: 2083.79)
2083
2081
2079 (12/5/14 Intraday High: 2079.47)
2076 (11/28/14 Intraday High: 2075.76)
2075 (12/5/14 Closing High: 2075.37)
2074
2073 (11/26/14 Closing High: 2072.83)
2072
2071 (11/21/14 Intraday High: 2071.46)
2069
2067
2065
2064
2063
2061
2057
2056 (11/18/14 Intraday High: 2056.08)
2053
2052
2050
2046 (11/13/14 Intraday High: 2046.18)
2044 (12/31/15 Closing High: 2043.94)
2042
2040
2038
2034
2032
2030
2023
2022
2019 (9/19/14 Intraday High: 2019.26)
2017
2011 (9/18/14 Closing High: 2011.36) (9/4/14 Intraday High: 2011.17)
2007 (9/5/14 Closing High: 2007.71)
2005 (8/26/14 Intraday High: 2005.04)
2003 (8/29/14 Closing High: 2003.37)
2002
1998
1997
1995
1993 (1/15/15 Closing Low: 1992.67)
1991 (7/24/14 Intraday Top: 1991.39)
1988 (7/24/14 Closing High: 1987.98)
1987
1986 (7/3/14 Intraday Top: 1985.59)
1985 (7/3/14 Closing High: 1985.44)
1983
1982
1981 (2/2/15 Intraday Low: 1980.90)
1980
1979
1978
1977
1973
1970
1969
1968 (6/24/14 Intraday Top: 1968.17)
1967.54 (200-week MA)
1965
1964
1963 (6/20/14 Closing High: 1962.87)
1961
1958
1956 (6/9/14 Intraday Top: 1955.55)
1951 (6/9/14 Closing High: 1951.27)
1949
1948
1943
1942
1937
1936
1935.49 (50-month MA)
1931
1928
1924 (5/30/14 Intraday Top: 1924.03) (5/13/14 Closing High: 1923.57)
1920
1917
1914
1912
1910
1906
1902 (5/13/14 Intraday Top: 1902.17)
1901
1897 (5/13/14 Closing High: 1897.45) (4/4/14 Intraday Top: 1897.28)
1891 (4/2/14 Closing High: 1890.90)
1889
1886
1885
1884 (3/21/14 Intraday Top: 1883.97) (3/7/14 Intraday Top: 1883.57)
1882
1879
1878 (3/7/14 Closing High: 1878.04)
1877
1874
1873
1872
1870
1868 (8/25/15 Closing Low: 1867.61)
1867 (8/24/15 Intraday Low: 1867.01)
1865
1862
1859 (1/20/16 Closing Low: 1859.33)
1855
1851 (1/15/14 Intraday Top: 1850.84)
1849 (12/31/13 Intraday High Top for 2013: 1849.44)
1848 (1/15/14 Closing High: 1848.38) (12/31/13 Closing High for 2013: 1848.36)
1846
1845
1843
1841
1840
1839
1835
1831
1829 (2/11/16 Closing Low for 2016: 1829.08)
1828
1827
1824
1820
1816
1814 (11/29/13 Intraday Top: 1813.55)
1812 (12/9/13 Intraday Top: 1811.52) (1/20/16 Intraday Low: 1812.29)
1810 (2/11/16 Intraday Low for 2016: 1810.10)
1809 (12/9/13 Closing Top: 1808.37)
1808
1807 (11/27/13 Closing Top: 1807.23)
1806
1803
1801
1800
1799 (11/18/13 Intraday Top: 1798.82)
1798 (11/15/13 Closing Top: 1798.18)
1796
1793
1791
1788

Thursday, January 26, 2017

EWW Mexico ETF 1-Minute Chart; President Pena Nieto Cancels Meeting with President Trump

President Pena Nieto was scheduled to meet with President Trump in Washington, DC, on Tuesday, 1/31/17,  but Nieto cancels the meeting at 11:52 AM EST today (1/26/17). Nieto is unhappy that Trump keeps repeating that Mexico will pay for the border wall. Nieto says Mexico will not pay for the wall and hinted that the meeting would be cancelled if the rhetoric does not cease. President Trump tweets that maybe the meeting should be cancelled and Nieto follows through a short time ago cancelling the meeting.

The Mexican peso currency pair jumps from sub 20 to 21.3505 which represents a weakening peso against the dollar. The EWW Mexico ETF immediately collapses -3%. Mexico is the second largest trading partner with the United States (Canada is number one) and accounts for 14% of US trade.

Trump always comes out on top when he stirs up trouble but has he created a potential Waterloo this time? Mexico citizens begin a boycott of US products with many refusing to go to Starbucks stores for coffee. SBUX drops -0.5%. Mexicans are also avoiding shopping at US border stores. The situation may spin out of control if the two leaders do not kiss and make up quickly.

At the Tuesday meeting, a joint press conference was planned and one of the reporters would definitely ask who is paying for the wall. So either Nieto or Trump would have to kneel in front of the other and kiss that person's shoes. The two leaders may have been better off to simply schedule an initial meeting to talk with each other and not conduct a press conference afterwards. Someone is going to lose face due to Trump demanding that Mexico pay for the wall. Colorful former Mexican president Vicente Foxx continues to tell Trump, "We are not going to pay for your 'f*#*ing' wall." 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 1-Minute Chart; SPX PRINTS 2300 FIRST TIME IN HISTORY

The S&P 500 prints above 2300 for the first time in history jumping to 2300.75. Oil prices were goosed into the opening bell to pump the energy stocks higher to print the SPX 2300 milestone. Strike up the band and pass out the SPX 2.3K hats. Everyday is a party for the market bulls. The 10-handle on the VIX and dropping put/call ratios indicate the rampant complacency and fearlessness in the markets but no one cares since they are too busy buying stocks. Traders expect stocks to move higher forever with the non-stop help of global central banker intervention and President Trump's spending plans. This information is for educational and entertainment purposes only. Do not invest based on anything you read or view here. Consult your financial advisor before making any investment decision.

Wednesday, January 25, 2017

SPX S&P 500 1-Minute Chart; New All-Time Record High; SPX 2300 Watch Continues

The Dow Jones Industrials tag 20,000 today. That is great for the public to see on television or for novice traders but the professional traders only pay attention to the S&P 500. The SPX prints a new all-time record high at 2297.09 within 3 points of the coveted 2300 level. Will 2.3K print today? Tomorrow? Will it ever print? 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 2-Minute Chart; DOW PRINTS 20,000 FIRST TIME IN HISTORY

At 9:30 AM EST, US stocks begin trading and the Dow Industrials print over 20,000. It took only 64 days (42 trading days) for the Dow to move from 19K to 20K the second fastest pace on record for the whole numbers. The fastest move was when the Dirty Thirty ran from 10K to 11K. Traders are donning Dow 20K hats. The trading floors are alive with a party and festive atmosphere. Radio, television and internet news outlets are touting the Dow 20 milestone. Traders are now watching to see if SPX 2.3K prints.

INDU, or DJI, prints a HOD at 20033.77. New record highs are printing. The SPX, COMPQ, NDX and NYA are also printing all-time record highs. The RUT small caps are not at record highs. This information is for educational and entertainment purposes only. Do not invest based on anything you read or view here. Consult your financial advisor before making any investment decision.

OVX Oil Volatility and WTIC West Texas Intermediate Crude Oil Daily Charts


The OVX oil volatility is a useful gauge to determine oil inflection points. The green circles are very high volatility which is panic and fear in the oil pits which creates a bottom in oil prices. The red circles are complacency and fearlessness, everyone is partying like its 1999 fully expecting oil to continue higher; of course the opposite occurs; oil sells off. What do you think will happen?

Oil is a better play on the short side going forward and a long oil play would not be attractive until the OVX prints above 42 indicating that there is blood in the pits; that is when you want to buy oil. Keystone has no position in oil currently. Any move higher in oil from here forward likely provides a short entry opportunity. 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 Weekly Chart; VIX Prints a Record-Setting 10-Handle

About 90 minutes ago, the VIX collapses through 11 printing a 10-handle dropping down to 10.68 (blue dot). Wow! The VIX has not seen these lows since July 2014 over 2-1/2 years ago. The complacency and lack of fear in markets is off the charts. No one expects the stock market to ever sell off again. Aunt Nellie just took her entire life savings and bought dividend stocks like the guy on television suggested. She told her lady friends at the card party that she will now be set for life and is happy since she never has to worry again.

In August 2014, only a couple weeks after the low July 2014 print, the SPX dropped from 1995 to 1902 a -5% drop. Note, however, that the low 10-handle prints back then were in place for a month or so.

Back in 2014 note how the VIX was below the 20 MA below the 50 MA below the 200 MA. A mean reversion higher was needed and the spike higher in the VIX sent the stock market lower (blue box). A similar fractal would be expected now. The market euphoria and joy is excessive. Each tweet by President Trump results in more stock market gains. Traders are singing, "Happy Days Are Here Again."

A short trade against the stock indexes can be brought on by scaling in over the next month. Perhaps short a little bit this week, then more next week, then again in two weeks and then again in three weeks to build the short position. By then, there will likely be stock market weakness occurring with the VIX spiking 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.

Tuesday, January 24, 2017

Keybot the Quant Turns Bullish

Keystone's trading algo, Keybot the Quant, whipsaws back to the long side at SPX 2272. Market bulls boost retail stocks higher. Watch RTH 76.64. Stay alert for another whipsaw move back to the short side due to the ongoing sideways choppy slop occurring in the stock market. More information is found at Keybot's site;

Keybot the Quant

USD US Dollar Index Weekly Chart; Sideways Channel

Keystone highlighted the US dollar index chart a few days after Christmas identifying  the negative divergence (red lines) at play. The majority consensus were calling for a huge move higher in the dollar index from 104. The bullishness on the dollar was rampant. The market consensus was wrong, as is usually the case, and the neggie d spanks price lower over the last month as forecasted. Traders rushed in to buy the USD at 104 expecting huge upside instead they have lost -4% of their money over the last month. If they would have simply noted the negative divergence they would have never made that bullish dollar trade.

The dollar is back kissing the top rail of that blue long-term sideways channel. The dollar will bounce or die from this level on the weekly basis. The indicators are weak and bleak wanting lower lows for the dollar after any bounce occurs in the weekly time frame. The MACD cross turns negative. Price has to decide if it wants to return inside the safety of the sideways channel, or, if a new sideways range is in play above one hundo.

The ADX is in the cellar which  verifies that the upward trend in the USD was not a strong trend. The tight standard deviation bands squeezed out the big upside move from October (pink arrows). The upper band was violated so the middle band at 99.61, also the 20-week MA, is in play and overnight, the USD prints a 99-handle exploring this level. A firm touch of the middle band should occur. The dollar weakened overnight from 1/23/17 into 1/24/17 due to President Trump's pick for Treasury Secretary, Steven Mnuchin, an ex Goldman Sachs man, stating in a written statement that he thought the 'dollar was excessively priced in the near term'.

Price may bounce off the trend line support now and seek 101.80-ish in this near-term but the expectation would be for a further sideways to sideways lower move for the dollar going forward. The sideways channel at 97.3-ish through 100.0 may be the destination for the dollar basket for the weeks and months ahead. Also, the 97.3-101.8 may prove to be the preferred path ahead for the dollar into spring and summer. 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.