Here are two of Keystone's key short term signals. There is no point to talk about the signals much anymore since the Federal Reserve keeps goosing the stock market higher for all their wealthy friends (knowing that they will also be wealthy once they leave public life). The crony capitalism system is great if you are part of the club.
The SPX prints a new all-time record high last week at 3337.77 before falling on its sword. Remember the triple 3's and 7's? Interestingly, the S&P 500 bottomed in March 2009 at the infamous triple six's; 666. The Fed is printing money like crazy using the Golden Printing Press in the basement of the Eccles Building. The rally has been one joyous day of fun after the other for the bulls. The Fed and markets play the part of Major Kong in Dr Strangelove. The stock market ride is a blast it is only the sudden stop at the end that proves somewhat uncomfortable.
You can clearly see the roll over in the stock market during the mid-September liquidity event when the overnight lending market blew up. Fed Chairman Powell and his partners in crime panicked and started printing money like madmen flooding the market with liquidity in a world already awash in liquidity. Pope Powell was worried about a liquidity event at the end of the year so he comically pumped the stock market higher during the whole fourth quarter. Powell is simply pleasing his investment bank masters and the elite class (one-half of Americans do not own a single share of stock). The stock market takes off like a rocket on the Fed money-printing. The central bankers are the market. Do you understand this simple fact, as clearly illustrated in the chart above, or are you stupid?
The SPX 30-minute chart shows the 8 MA finally stabbing down through the 34 MA so the bears are in control of the stock market in this VST. There were a few fake-out moves where the 8 MA wanted to create a negative cross, but the Fed and happy trade talk would send stocks higher saving the day. Bears win going forward until the bulls can push the 8 MA back above the 34 MA. Now that the 30-minute has given up the ghost, how about the 60-minute?
The SPX 60-minute chart shows the SPX price above the 200 EMA at 3251 so the bulls remain in control of the stock market over the VST. The signals between the 30-minute and 60-minute charts are conflicting and both cannot be right; one of them will flinch. Thus, watch to see if the SPX can push down through the 200 EMA on the SPX 60-minute chart at 3251 which ushers in serious stock market negativity. Look for a 25 to 30-handle flush in the S&P 500 if SPX 3521 fails.
The bulls must focus on the 30-minute chart and pushing the 8 back above the 34; it is the only way the bulls can regain their upside momentum.
Bulls win going forward if they can push the 8 MA above the 34 MA on the SPX 30-minute chart.
Bears win going forward if the 8 MA remains below the 34 MA on the SPX 30-minute chart.
Bears win big going forward, with blood, chaos and mayhem in play, if the SPX loses the 200 EMA on the 60-minute at 3521. The coronavirus continues to expand around the world with the US cases rising to five. Futures will be slapped in the face, punched in the stomach and perhaps taken to the woodshed out back. 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.
At 6:19 PM EST, Sunday Evening in the States: Futures are falling like a rock. S&P -35. Dow -277. Nasdaq -118. Russell -18. WTIC oil loses -2.8% to 52.69. Brent oil drops -2.5% to 59.22. The coronavirus will hurt oil demand. Gold rises to 1585. Silver pops to 18.31. Copper tanks -1.5% to 2.643. Euro 1.1032. Euro/yen 120.05. Dollar/yen 108.82. US Treasury yields are; 2-year 1.49%, 5-year 1.50%, 10-year 1.68%, 30-year 2.13%. The 2-10 spread is 18.5 bips.
At 7:24 PM EST: Futures remain weak. S&P -28. Dow -233. Nasdaq -117. Japan's NIKK and Topix are each down about -2%. WTIC oil 52.89. Brent 59.36. Gold 1578. Silver 18.21. Copper collapses -1.9%. Euro 1.1034. Dollar/yen 108.98. US Treasury yields are; 2-year 1.45%, 5-year 1.46%, 10-year 1.64%, 30-year 2.09%. The 2-10 spread is 18.8 bips. Yields drop about 4 basis points across all durations but interestingly, the yield curve (2-10 spread) remains about the same.
Note Added 8:20 PM EST: Futures remain in the crapper. S&P -26. Dow -221. Nasdaq -105. WTIC oil 52.97. Brent 59.49. Gold 1580. Silver 18.25. Copper is down -1.6% to 2.60. Euro 1.1032. Dollar/yen 108.98. Pound 1.30666. Dollar/yuan 6.9109. US Treasury yields are; 2-year 1.45%, 5-year 1.46%, 10-year 1.64%, 30-year 2.09%. The 2-10 spread is 18.8 bips. Yields drop about 4 basis points across all durations but interestingly, the yield curve (2-10 spread) remains about the same. A huge earnings week is on tap.
Note Added Monday Morning, 1/27/20, at 3:10 AM EST: The VIX begins trading above 17 at 17.17 with the new trading week underway, well above the critical bull-bear 200-day MA at 14.93, so the bears rule the stock market. S&P futures tank -31. Dow -285. Nazzy -104. Russell -14. Much of Asia trading was closed. China extends the lunar holiday period. Japan's NIKK and Topix each dump -2%. European stocks begin trading minutes ago and collapse lower. The DAX (Germany), CAC (France) and FTSE (UK) are each down from -1.5% to -1.8%. The stock market will remain sick and trend lower and lower as long as the VIX is above the 200-day MA at 14.93. Bulls will not shine again until the VIX goes sub 14.93. Global fear increases over the spread of the coronavirus. Every time that you look at news on the internet, the virus death count and infections keep rising. Scientists now believe the coronavirus is very contagious during a two-week incubation period when you cannot even tell that you are sick. Hence, the virus is starting to spread like wild fire with 80 deaths and close to 3,000 now infected. The filthy communists drop the ball as usual lying about the virus that began in China probably due to close human habitation with animals. Do not discount the possibility that Xi and the gang are culling their own population that is 1.4 billion on its way to 1.5 billion. If you kill off one-third of the elderly population with a pandemic, the same goes for the United States, voila, all your worries about funding government programs (think Social Security, Medicare, etc...) vanish. The world is not a pretty place. Meanwhile, at the President Trump impeachment trial, the two corrupt political parties, the demopublicans and republocrats, battle for media attention and talking points. Crony capitalism is not experiencing a pretty ending and this is only the start of the next few years of trouble. According to the New York Times, former Security Adviser Bolton's book manuscript is provided to the Whitehosue for review. This is standard practice to make sure there isn't any information that will impact national security. Bolton supposedly identifies Trump as asking Ukraine for the favor of investigating his political rival, democrat Joe Biden, in return for military aid. The aid was already approved by Congress and the president should not be playing such games, but it looks like Donny's hand is caught in the cookie jar. No doubt that King Donny will try to bury Bolton's book; this is how the crony capitalism system works. All politicians inside the beltway are corrupt. Of course, Trumpster is getting out in front of this latest problem the president already refuting everything that Bolton has written; of course he does. Donny will probably be busy tweeting his innocence this morning. If you were ever in, or visited, the county lock-up near you, they all say they're innocent. The reality television show presidency, the never-ending daily baby drama, is getting old. The week is beginning with a risk-off day. WTIC oil 52.91. Brent 59.35. Gold is up 7 bucks at 1579. Silver gains +0.4% to 18.18. Copper collapses -1.7%. Euro 1.1035. Euro/yen 120.36. Dollar/yen 109.07. Pound 1.3083. US Treasury yields are; 2-year 1.46%, 5-year 1.46%, 10-year 1.64%, 30-year 2.10%. The 2-10 spread is 18.7 bips.
Note Added Monday Morning, 1/27/20, at 3:54 AM EST: S&P -31. Dow -285. Nazzy -104. Russell -14. VIX 17.17. WTIC oil is down -2.666%. Brent oil slips -2.5%. Gold 1579. Silver 18.21. Copper tanks -1.8% to 2.637. Euro 1.1032. Euro/yen 120.29. Dollar/yen 109.03. Pound 1.3073. Dollar/yuan 6.9109. USD is at 97.87 moving slightly higher. US Treasury yields are; 2-year 1.45%, 5-year 1.46%, 10-year 1.64%, 30-year 2.09%. The 2-10 spread is 18.4 bips. Nifty (India) is trading down -0.666%. Soybeans are down -6% this month. Soybean Donny better get on the horn to Dictator Xi and ask the communist why he is not buying the ag goods he promised. The ink on the paper of the so-called Phase One trade deal is not even dry yet and US farmers ask, "Where's the beef?". Traders on the US East Coast wake up from slumber, those that were not up all night, and begin monitoring computer screens.
Note Added Monday Morning, 1/27/20, at 4:35 AM EST: S&P -40. Dow -340. Nazzy -135. Russell -18. VIX 17.78. Dollar/yen 108.85. USD 97.89. Copper -1.9%. US Treasury yields are; 2-year 1.44%, 5-year 1.43%, 10-year 1.61%, 30-year 2.07%. The 2-10 spread is 17.6 bips. The ugliness festers. Perhaps we see traders and investors start running for the exits from those massive ETF positions? It will be a hoot watching everyone try to squeeze out the ETF door at once; that never seems to end well and can obviously bring on a potential crash scenario. The massive recent outflows from hedge funds, and corresponding inflows into ETF's, are very telling. Since the stock market goes up non-stop for 11 years due to the Federal Reserve's and other central bank's money-printing, investors are asking themselves 'why pay someone to manage money?' (Moral hazard.) All these folks figure they can squeeze a couple more percentage points of upside out by just managing their own money and buying ETF's. Most of the money managers have been doing a lot of this anyway. It's hilarious. All these armchair Einstein's, thinking they are the next Jesse Livermore, step up to the plate expecting to hit non-stop homeruns in the ETF ball game. It will be entertaining to watch them all run for that same exit, you know, the one where the double doors swing inside not outside. S&P -41.
Note Added Monday Morning, 1/27/20, at 5:04 AM EST: S&P -43. Dow -362. Nazzy -150. Russell -20. VIX 17.98.
Note Added Monday Morning, 1/27/20, at 5:19 AM EST: S&P -45. Dow -375. Nazzy -160. Russell -21. VIX 18.06. India's Nifty ends the day down -1.1%. DAX -2.0%. CAC -2.1%. FTSE -2.2%. The coronavirus news only becomes more confusing and disjointed. Humans tend to panic when they have a fear of the unknown; they are wired that way.
Note Added Monday Morning, 1/27/20, at 5:26 AM EST: S&P -47. Dow -400. Considering fair value and the joyous Friday, the Dow is set to drop about five hundo at the opening bell in about four hours. Nazzy -173. Russell -22. VIX 18.28. Copper -1.9%.
Note Added Monday Morning, 1/27/20, at 5:45 AM EST: S&P -50. Dow -430. Nazzy -176. Russell -23. VIX 18.34. The stock market is slip slidin' away, as Paul would sing.
Note Added Monday Morning, 1/27/20, at 7:18 AM EST: S&P -45. Dow -406. Nasdaq -162. Russell -19. VIX 18.00. The bulls are not discouraged. The investment houses such as Pimco, GS, JPM and others are calling the stock market pull back a great buying opportunity. Fear and panic creates a tradeable bottom but folks looking forward to buying the dip are not panicking or in fear; they want to keep partying like its 1999. This behavior hints that weakness may persist. 81 are dead from the coronavirus.
Note Added Monday Morning, 1/27/20, at 8:03 AM EST: S&P -48. Dow -430. Nasdaq -163. Russell -21. VIX 18.14; an 18-handle. Copper -2.1%. WTIC oil -2.8%. DAX -2.2%. CAC -2.2%. FTSE -2.1%. Dollar/yen 108.96. US Treasury yields are; 2-year 1.44%, 5-year 1.44%, 10-year 1.61%, 30-year 2.07%. The 2-10 spread is 17 bips.
Note Added Monday Morning, 1/27/20, at 9:26 AM EST: The opening bell is four minutes away. S&P -56. Dow -473. Nasdaq -191. Russell -24. VIX 18.62. DAX -2.7%. Dollar/yen 108.93. US Treasury yields are; 2-year 1.44%, 5-year 1.43%, 10-year 1.61%, 30-year 2.07%. The 2-10 spread is 16.66 bips.
Note Added Monday Morning, 1/27/20, at 9:31 AM EST: The SPX collapses 60 points, -1.8%, to 3235 stumbling out of the gate. The Dow falls down the cellar steps collapsing 523 points, -1.8%, to 28463. The Nasdaq Composite sinks 218 points, -2.3%, to 9097. VIX 18.90. Hotels, airlines, travel agents and commodities are slapped silly. Tech stocks are in retreat. Dollar/yen 108.95. WTIC oil -2.5%. Brent oil -2.666%. Gold 1584. Silver 18.24. Copper is punished -2.5%. Dr Copper is in the emergency room and the doctors have the paddles on his chest.
Note Added Monday Morning, 1/27/20, at 9:51 AM EST: Bringing this post around full circle, take a look at the SPX 60-minute chart, the 200 EMA is at 3252. SPX price is at.... wait for it .... wait a bit longer for it ....... you really need to wait a bit longer for it so you appreciate it more........ 3252. The 200 EMA fails but price quickly bounces for the back kiss. This bull-bear fight at SPX 3252 is for all the marbles. Bulls will be okay and stocks will recover going forward if the SPX moves back above 3252 and trends higher. Bears will rule the stock market going forward if price fails here from the 200 EMA on the SPX 60-minute chart at 3252 as this back test occurs. Stocks would then collapse down the rabbit hole. Which one will occur? It is bounce or die time from 3252.
Note Added 9:55 AM EST: SPX 3252. VIX 17.59. The battle line is drawn at 3252. Who will win?..
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