The BOE and ECB central bankers pump equity markets higher on dovish talk as the U.S. enjoyed the July 4th Independence Day holiday. BOE's Carney, with his first policy statement, hinted at further easing coming in August. Both central bankers left rates unchanged but their comments were very QE and low-rate friendly. The magic words are "rates will stay low for an extended period of time." The pound and euro immediately weakened as the race to debase by all nations continues. The green rectangle shows the dramatic drop in the euro on Draghi's comments. The global economy may be headed south but the central bankers rule the markets and control the direction of equities. U.S. futures jumped on the news.
Interestingly, for many months, the euro and equities moved in the same direction. If the euro dropped, the higher dollar would hurts commodities and the broad indexes. The asset relationships, however, remain in flux these days, twisted in knots due to the central banker intervention in markets. Euro is currently printing 1.2874. Price tries to maintain a sideways range through 1.288-1.292 the last few hours but now may be slipping again. 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.
Egypt is in disarray with Mursi not willing to step down but the army says he is in the final hours of rule. Two Portugal ministers resign as this country is tumbling into crisis. The 10-year Portugal yield jumped above 7%, then 8%. The Portugal market is down -6% with banks selling off in excess of -10%. The bank deposits in Portugal will likely be subject to confiscation just like Cyprus a la a bail-in. Greece continues to fall apart unable to pull out of its depression and now jeopardizing the bail-out requirements so there is a trio of trouble ongoing ahead of the U.S. shortened trading session. Egypt turmoil sends WTIC crude over 101 and Brent oil is at 104.76 nearing 105. The pre-holiday market buoyancy may be crushed by the geopolitical risk. S&P futures are -10 about four hours before the opening bell.
Keybot the Quant is long. UTIL 480.75 and GTX 4735 are causing market negativity. The bulls will need to regain one or both these levels to take markets higher. XLF 19.26, SOX 459.80 and RTH 51.65 are causing market bullishness. The bears need to push one of these three parameters under the level shown to create strong market downside. If one of the three fail, and the SPX drops under 1607 and lower, Keybot will likely flip short. Interestingly, S&P rating agency downgrades three large banks, Barclay's, Credit Suisse and Deutsche Bank, and, along with the bank losses in Portugal, may create negativity for XLF today. In addition, the Fed approves the Basel rules and Dodd-Frank requirements which places restrictions on banks. The Fed will impose stricter rules on the large banks in the months ahead. So add it all up and financials should take a few thwacks today.
The SPX 1618-1624 resistance gauntlet has held this week. The 8 MA is under the 34 MA on the 30-minute chart and the SPX is under the 200 EMA on the 60-minute chart signaling bearish markets for the hours and days ahead. For the SPX today, starting at 1614, and considering the current negativity to begin the day, the bears need to push under 1607 and this will accelerate the move lower to test the 1598-1600 support in quick order. The 20-day MA is 1616.63, the 200 EMA on the 60-minute is 1618.87 and the 50-day MA is 1623.94. The bears will rule moving forward if the SPX stays below these three key moving averages.
Mortgage Applications are released at 7 AM and have been in a downtrend. The Challenger and ADP Job Reports at 7:30 AM and 8:15 AM, respectively, will provide insight into Friday's Job Report. International Trade is 8:30 AM. Jobless Claims are moved one day early and released at 8:30 AM. ISM Non-Mfg Index is 10 AM so markets may take a stutter step on this release. Oil Inventories 10:30 AM and Natty Gas Inventories at noon. Markets close at 1 PM today. Markets tend to be bullish in front of a holiday but the geopolitical risks are dictating market direction this morning. The dollar/yen is back under 100 down to 99.75, in concert with lower S&P futures.
Note Added 6:00 AM: S&P's -8.5. Dow -74. Nasdaq -17. WTIC oil is up to 101.09 and Brent oil is 104.80. Gold and silver are up slightly but not receiving as strong a safe haven bid as would be expected considering the Egypt and European turmoil. Portugal 10-year yield is 7.6%. Euro 1.2960. Dollar/yen 99.78. Dollar spot is 83.44.
Note Added 6:38 AM: S&P's -10. Dow -83. Nasdaq -20. WTIC crude oil 101.08. Brent oil 104.83. Euro 1.2964. Dollar/yen 99.76. The Egyptian army's ultimatum for Mursi expires at about 11 AM EST. This is two hours before the closing bell today so the fireworks may begin before tomorrow's holiday. The video running on television showing the unrest in Egypt will foster market negativity.
Note Added 7:38 AM: S&P's -8.3. Dow -65. Nasdaq -16. Oil is really starting to run. WTIC oil 101.37. Brent oil 105.27. Gold and silver receiving firmer bids higher. Euro 1.2960. Dollar/yen 99.30. Mortgage Applications are weak for another weak, basically the last couple months, continuing to question the housing recovery despite all the rosy talk.
Note Added 8:19 AM: ADP Jobs Report is 188K jobs in line with what is expected for Friday in the 150K-200K area. S&P -8. Dow -70. Nasdaq -17. Holy smokes. Look at oil run. WTIC crude oil 101.83. Brent oil 105.49. Euro 1.2969. Dollar/yen 99.62 recovering higher.
Note Added 8:32 AM: Dramatic improvement in futures. S&P's -3. Dow -22. Nasdaq -5.5. The data and ADP number creates the boost. Dollar/yen 99.73.
Note Added 10:19 AM: Having technical difficulties here today with the computers. UTIL 476.53. GTX 4749. XLF 19.41. SOX 468.41. RTH 52.31. VIX 16.97. TRIN 0.72 which is very bullish for today. SPX 1608.78. LOD 1605.57. Keystone took profits on SPXU and SKF exiting both long positions (which are short S&P and short financials, respectively) and will look to reenter.
Note Added 10:36 AM: Oil inventories down more than expected. Oil continues higher as the television screens show the Egypt protests live. WTIC crude 101.72. Brent oil 105.60. SPX flat at 1609. GTX joined the bull camp today and XLF remains in the bull camp.
Note Added 11:10 AM: Egypt is at its deadline now. There are millions of people in the streets. The European close is on tap. The SPX calmly motors along sideways through 1608-1611. The stock market closes withing two hours until Friday morning.
Note added 11:30 AM: SPX breaks up through the sideways range now at 1612.17. Keystone took profits on MUX exiting this long position. Will look to reenter. MUX remains very attractive moving forward for the weeks and months ahead.
Note Added 11:52 AM: SPX moving through 1612-1613. The 20-day MA is 1616.83.
Note Added 11:57 AM: Utilities are moving higher. UTIL now at 479.65 heading towards the 480.75 level that will create more upside for the broad indexes. SPX at highs of the day now at 1615.69, testing the 20-day MA resistance.
Note Added 11:59 AM: UTIL 480.21 moving higher. WTIC oil 101.39. Brent oil 105.83.
Note Added 12:41 PM: SPX moves up into the 1618-1624 resistance gauntlet and is rejected. SPX is fighting at the 20-day MA at 1617.03. ECA and CLF are set up nicely as potential speculative longs.
Note Added 12:46 PM: UTIL 479.28. The 200 EMA on the 60-minute is 1618.61 and the 20-day MA is 1616.98. SPX is printing 1615.87. Keystone bot ECA and CLF opening new long positions. Also bot more KOL adding to this ongoing long which is the long coal ETF.
Note Added 1:12 PM: SPX finishes at 1615.41 under the three important moving averages highlighted above. Price also makes another attempt at busting through the 1618-1624 gauntlet, and fails. The last day or so, it has been highlighted how the 50-day (1624.68) is moving higher, and 20-day (1616.96) lower, so this creates a sideways bracket for price to move through, which would be 1616.96 - 1624.68, or to keep it simple, 1617-1625. The 1626-1627 is very strong resistance so that top side at 1625-1627 forms a strong confluence of resistance. The SPX closes under this range so that is a plus for market bears. UTIL is 479.14 continuing to provide bear juice. GTX is 4755 and XLF is 19.44, so if the 4735 or 19.25 level is lost, respectively, that will provide bear juice to send markets down under SPX 1600. Bulls will obviously focus on pumping utilities come Friday morning. Keystone's two short-term signals (200 EMA on 60-minute chart and 8/34 MA cross on 30-minute) remains bearish although the 8 MA is curling to the upside now hinting that the bulls may launch a surprise attack on Friday morning. Happy July 4th to everyone. Time to commence eating large amounts of apple pie.
Today picks up where yesterday ended. The SPX is fighting at the 1618-1624 resistance gauntlet so watch the 20-day MA at 1616.87, 200 EMA on the 60-minute chart at 1618.90, and 50-day MA at 1624.04. Price is moving through the 20 and 50-day MA bracket between 1616-1624. Bulls need to push utilities higher today. Watch UTIL 480.74. Price jumped above, then failed below, now back above again at UTIL 481.10. Bears need to push either XLF under 19.25 or RTH under 51.60 to gain downside fuel. The 200 EMA cross on the 60-minute and the 8 and 34 MA cross on the 30-minute, two important near-term market signals, are both walking a tightrope right now. Whichever direction they both agree on is the market direction forward.
The dollar/yen is above 100 now at 100.34 so equities are higher. Factory Orders are at 10 AM so a market pivot point may occur. Fed's Dudley speaks at 12:30 PM so after noon time, his speech may be released which will probably bump the SPX a few handles higher as he pumps the QE talk. Keystone started shorting KKD, opening a new position, which is short donuts. Also bot PBR opening a new long position.
Note Added 9:59 AM: TRIN is 1.00 flat neutral and not wanting to choose a side today. VIX is down again today at 16. Keystone took profits on FRO exiting the long trade, will look to reenter.
Note Added 10:03 AM: Markets initially pivot to the downside after the data; the SPX loses a couple points. UTIL just came down to tease the critical 480.75 danger line, and bounced. UTIL is 481.15. Watch utilities as a rudder for market direction today. Up utes is up markets, down utes is down markets. Dollar/yen is 100.36.
Note Added 10:51 AM: UTIL 482.25. TRIN 1.03. VIX 15.99. SPX 1622.23. The beat goes on with the ongoing battle across the 1618-1624 gauntlet. Keybot the Quant remains long since utilities, retail and financials all remain in the bull camp. Keystone added more SPXU to this ongoing long trade which is short the S&P's.
Note Added 2:30 PM: Egypt is falling apart. The army says they will oust Mursi and suspend the constitution. There are millions of people in the streets, squaring off on both sides, so the situation could grow ugly and send the country into turmoil. Of course the Suez Canal is important to the oil industry, and WTIC crude moves up towards 100 now at 99.74. Gold is not receiving a safe haven bid. Mursi may be pleading 'mercy' in a few hours. UTIL drops back under the 480.75 danger line so the markets weaken. RTH and XLF remain bullish. The SPX is losing altitude now under 1610. VIX is positive on the day now up to 16.72. TRIN 1.14. Dollar is 83.47 moving higher. Dollar/yen 100.51, down a little so equities leak lower. The 1618-1624 resistance gauntlet continues to hold favoring bears. The SPX is under the 200 EMA on the 60-minute chart at 1618.90 signaling bearish markets for the hours and days ahead. That pesky 8/34 MA cross on the 30-minute, however, continues to ......... whoopsies, .... the 30-minute just printed a new candlestick for 2:30 PM and the 8 MA just stabbed down through the 34 MA to signal bearish markets for the hours ahead and this places the 60-minute and 30-minute in agreement giving the overall negative prognostication forward street cred. The next one-half hour is key since the bulls must spike the indexes higher right now to stop the slide and hold the bears at bay, otherwise, the bulls will lose their grip on the markets. Since the Egypt news will likely remain concerning, equities should continue to leak lower.
Note Added 2:39 PM: Dollar/yen 100.47. UTIL 478.57. VIX 16.88. TRIN 1.19. RTH 52.40. XLF 19.45. SPX 1607.95. The 8 MA is holding under the 34 MA on the 30-minute chart, so far, so the bears develop a cautious smile. DNKN is upgraded today so this was unfortunate timing to short donuts, but, KKD should drop anytime forward.
Note Added 3:00 PM: Another candlestick prints now on the 30-minute chart and the 8 MA is clearly down through the 34 MA signaling bearish markets for the hours ahead, however, another one-half hour is needed to make sure the 8 stays under the 34. The bulls may have a trick up their sleeve. Fed's Powell will pump the markets about one hour after the closing bell today and the pre-holiday buoyancy may enter the markets. If the Egypt situation worsens, however, it trumps all, and markets will head lower.
Note Added 3:54 PM: UTIL 479.57. SPX 1613.48 remaining under all the important moving averages highlighted in pink above. Keystone shorted more donuts, KKD, adding to this ongoing short position opened today.
Note Added 3:57 PM: The 20-day MA is 1616.65. SPX is 1614.35. Volume is lighter today than it was yesterday which says tomorrow will be fumes and vapors with the early close.
Note Added 4:10 PM: Keystone's two short-term market signals, the 200 EMA cross on the 60-minute, and 8/34 MA cross on the 30-minute, finally agree, after the last few days of mixed signals, and the decision is favoring the downside. You know what this means. The signals are tentatively bearish so the bulls can mount one, last-ditch effort, to reverse the negativity, at the opening bell tomorrow. The bulls must catapult equities higher at the opening bell to send the SPX over 1619 and the 8 MA above the 34 MA on the 30-minute to reverse the market negativity. So bulls need to see the overnight futures at +5 or higher to light the way. Fed's Powell is on deck shortly. Egypt will be watched all evening long into tomorrow since Mursi may end up pleading 'mercy'. UTIL 479.95, below 480.75, causing bearishness. XLF 19.53, above 19.25, causing bullishness.
Happy Canada Day to our friends up north. Today begins a new month, a new quarter, Q3, and the second half, H2. China PMI is one single hair above contraction at 50-ish verifying the recent weak economic data. The dollar/yen pops to 99.75, boosting the S&P futures to +8, as compared to the dollar/yen at 99.10-99.40 last evening when futures were down. So watch this relationship that appears in sync again. Dollar/yen up = up equities and dollar/yen down = down equities. Keystone keeps singing the 1618-1623 resistance gauntlet song since a winner and loser is determined by the price action across this zone. If the SPX stays under 1618, the bears will continue to gather strength and push price back under 1600 and lower. If price pops above 1623, the bulls will probably not look back until 1636 R and/or 1649-1650 R. Watch the three key moving averages to receive the answer; the 50-day MA at 1621.72, the 20-day MA at 1618.77 and 200 EMA on the 60-minute at 1618.75. If 1619 gives way to the upside, then the 20 and 50 will likely give way in quick order.
For the SPX today starting at 1606, the bulls need to touch the 1616 handle and the upside will accelerate into the 1618-1623 gauntlet and begin the battle for market control. The bears need to push under 1601 to accelerate the downside that would target 1593 in quick order. A move through 1602-1615 is sideways action today. Keybot the Quant is long and will likely stay that way unless UTIL 480.82, RTH 51.48 and/or XLF 19.20 fail. If these three parameters remain in the bull camp, the markets will continue floating higher. If any of the three fail, that locks in the market downside path moving forward. Markets need to play out this morning into 10 AM with the ISM Mfg data since this will create a pivot point. So the initial move at the opening bell may not be the move in store for the day. The 60-minute chart with 200 EMA must come into agreement with the 30-minute chart with 8/34 MA cross as highlighted in this morning's charts. This agreement will identify the market direction forward.
The bulls are at an advantage since the new month brings in new money and bullishness, ditto the holiday. Fed heads begin pumping the markets tomorrow at noon time and politicians are on vacation which is market positive as well. If the bears run today, the markets may shift into the bull side from noon Tuesday into the holiday. If the bulls maintain the bullish start today through the close, the markets may float higher all three days into the holiday. Wednesday is a shortened session with the NYSE closing at 1 PM EST. The markets may take on a sideways function this week due to the holiday and traders taking time off for hot dogs, apple pie and fireworks. The Jobs Report is Friday morning and will also be the first opportunity for markets to react to the ECB decision on Thursday so the week may have a wild ending. Next week all the traders will return ready to begin the summer trading season. S&P's are +7 and dollar/yen is 99.67.
Note Added 9:16 AM: GDXJ is receiving a reverse split this morning so that price will change at the open to reflect the split.
Note Added 12:16 PM: The bulls stampede the bears from the opening bell forward, leaping to 1624-1626 after the 1616 was touched and is now moving sideways. The 1626-1627 is strong resistance. The bulls move through the 1618-1623 resistance gauntlet, and successfully back kissed the 1623 at 10:30 AM, helping the bulls keep the broad indexes elevated. The 20-day MA is 1618.05, the 200 EMA on the 60-minute is 1618.95 and 50-day MA is 1623.13. The bulls take out all three flexing their muscles. The TRIN is under 0.9 helping the bulls. Volume is light only about two-thirds of a day's average expected volume, so it is easier to push the jello around the plate. The SPX is above the 200 EMA now agreeing with the 8/34 MA cross on the 30-minute chart signaling bullish markets for the hours and days ahead. It's all going the bulls way, however, the move above the important MA's is not very convincing as yet, the volume is light, the 1626-1627 holds price down so far, UTIL is leaking lower with a 483 handle right now, and the SPX hourly and minute charts are either showing or developing negative divergence. Thus, the broad indexes likely need to play around sideways for a while and more action may occur across the 1618-1623 gauntlet. Give the bulls the nod right now but the move so far is not entirely convincing. The dollar/yen is 99.68 going no where so equities stumble sideways as well. Keystone took profits on DNDN, will look to reenter. Also took profits on GLD, will look to reenter. Also bot FRO, opening a new long position, a dangerous and speculative shaky shipper, that is showing attractive positive divergence. Also bot SKF, the double inverse ETF for financials, opening a new long trade (which is short financials).
Note Added 12:34 PM: SPX comes down to back test the 50-day MA at 1623.09. Price is at 1623.72 bouncing off the 50-day four minutes ago. Looks like some drama is on tap. UTIL 482.71 now only two points above the danger line.
Note Added 12:41 PM: Note the daily chart with the 50-day MA sloping upwards, and 20-day MA sloping downwards. Price may end up preferring to move between this range using these moving averages as the upper and lower limits, which is currently a range of 1618-1623. The bulls are keeping their heads above water with the SPX at 1624.09 and 50-day MA at 1623.09, so one buck to the upside, and bulls know they must close above the 50-day today to prove they have the upside juice moving forward. UTIL 481.67 now less than a point from the 480.74 danger line. Things are getting interesting.
Note Added 1:43 PM: If you bring up a minute chart you can see how price is dancing across the 50-day MA at 1623-ish bouncing, then drifting back, then bouncing, then drifting back. Will the bulls hold the 50-day MA support? Utilities continue to leak lower. Whoa. UTIL just failed at 480.74, now printing 480.59. If UTIL stays under 480.74, the broad indexes will weaken.
Note Added 1:45 PM: SPX collapses through the 50-day MA at 1623.04 now printing a 1621 handle. That was fast. A sideways bracket is formed by the 20-day MA below at 1618 and 50-day above at 1623. UTIL 480.85 back to the bull side by a dime. The drama continues. Dollar/yen 99.62, a bit lower, so the SPX is a bit lower.
Note Added 1:51 PM: UTIL collapses to 480.04. Hold on, this may get interesting.
Note Added 2:06 PM: The 200 EMA on the 60-minute chart is 1618.95. The SPX is 1620.08. The 8 MA is curling over to the downside on the 30-minute chart. UTIL 480.74 exactly on the danger line so bounce or die and the markets will follow UTIL.
Note Added 3:33 PM: SPX is 1616.11, where the break out started this morning in the first minute of trading, under the 200 EMA on the 60-minute at 1618.92 which signals bearish markets ahead. Who knows where it ends today? The 8 MA is dropping towards the 34 MA on the 30-minute chart. UTIL is 479.03 creating the market negativity this afternoon. XLF is 19.54 above the 19.25 danger line and RTH is 52.32 above the 51.60 danger line. The bears will need either RTH or XLF to join the bear camp to send the SPX under 1600. Keystone bot DBA opening a new long position.
Note Added 4:00 PM: After all the theatrics, the 1618-1623 gauntlet held, so far. UTIL 479.59. The rejection of both the 20 and 50-day MA's two times over the three days is bearish hinting that the bulls do not have the juice to take equities higher. Volume is below average about 72% of a day's average expected volume. The 8 MA is moving downwards towards a negative cross of the 34 MA on the 30-minute chart in the first hour of trading tomorrow, however, you know what has to be done, the bulls must catapult equities higher at the opening bell to send the 8 MA back up and prevent the negative cross. So bulls need another morning of S&P futures at +7 or higher before the open tomorrow. If the 8 stabs down through the 34, and the UTIL stays negative, the markets should start selling off in force. If markets are weak tomorrow morning, Fed's Dudley may pump the indexes at noon time with happy QE talk. The markets may stumble sideways ahead of the holiday in this light trading environment. Tomorrow is the last full day of trading until Friday. The battle for the 1618-1623 gauntlet continues.
The 8 MA is above the 34 MA signaling bulish markets for the hours ahead, however, the moving averages are on top of each other with the 8 MA poised to stab down through the 34 MA this morning. The bulls need a strong upside open so the 8 MA will curl higher and they can prevent the negative 8/34 MA cross from occurring, and the S&P futures are +7 so the bulls know what they must do. The price action is favoring a sideways symmetrical triangle that should make a decision today, at the latest tomorrow morning. The vertical side of the triangle is about 20 handles so if the move is up, breaking up through 1614, the target is the strong 1636 resistance level. If price collapses out the bottom of the triangle, the target is the mid 1580's. The 200 EMA on the 60-minute chart is 1619 and a very key decision level that would point the way forward, but the 1614 is important as well as evidenced by the triangle so a move up through 1614 can very well signal that the bulls want to run higher and will break through the 1619 level and the 1618-1623 resistance gauntlet. Simply watch the 8/34 cross. The bulls are firmly in the game as long as the 8 stays above the 34. If a negative 8/34 cross occurs, the bulls will fold like a cheap suit.
The 30 and 60-minute chart signals must agree and that agreement will point the market direction forward, either the SPX punches above the 200 EMA on the 60-minute chart to agree with the 30-minute chart above to give the bulls the nod, or, the 8 MA stabs down through the 34 MA on the 30-minute chart to agree with the 60-minute chart to signal that the bears rule moving forward. 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.
The 200 EMA at 1618.75 is uber important and determines if markets are in a VST bear or bull move for the hours and days ahead. The SPX is under the 200 EMA signaling bearish markets ahead. This 1619 is inside the important 1618-1623 resistance gauntlet (black lines) and is likely more important than the 20 and 50-day MA's. If the bulls can push back up through 1619, the 20 and 50-day MA's will likely fold like a cheap suit and price will likely punch up through the 1618-1623 gauntlet. Thus, Keystone views the 1619 level as the key level determining the fate of the broad indexes.
A tweezer top candlestick pattern identified the top on Thursday morning, which was also a successful back kiss of the 200 EMA by the bears. The indicators are weak and bleak pointing to lower prices ahead. Watch to see if the RSI loses the 50% level which would be another feather in the bear's cap. The 1619 R is key. Also of interest is the sister signal to the 200 EMA cross described above which is the 8 and 34 MA cross on the 30-minute chart, which currently is bullish. The 30 and 60-minute chart signals must agree and that agreement will point the market direction forward, either the SPX punches above the 200 EMA on the 60-minute chart to agree iwth the 30-minute chart to give the bulls the nod, or, the 8 MA stabs down through the 34 MA on the 30-minute chart to agree with the 60-minute chart above to signal that the bears rule moving forward. 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.
The 2-hour chart shows how price respects the 50 and 200 MA's and is now fighting to punch up through the 50 MA at 1613.57. The 1614 is strong S/R so this will be a key level to watch today and considering the futures are at +8, price may want to come up to test 1614 directly at the open. If 1614 gives way to the upside, then the 200 MA at 1622.21 would be targeted. Once price would move up through 1614-1618, an attack of the 1618-1623 resistance gauntlet is a given. Interestingly, the 200 MA on this chart falls within the important 1618-1623 like many other parameters highlighted previously. The importance of this 1618-1623 battle zone cannot be understated.
Price is playing at the top rails of the downward-sloping channel. The price action above and below the 50 and 200 MA's will provide hints on market direction. 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.
The 20-day MA at 1618.77 and falling, and 50-day MA at 1621.72 and rising, are the key to market direction forward and will determine the fate of the broad indexes. The 1618-1623 resistance gauntlet (black lines) is for all the marbles. Using the Battle of Gettysburg as an analogy, in honor of the 150th Anniversary of this historic Pennsylvania conflict that changed the course of the Civil War in America, the North wins above 1623 (bulls) while the South will win under 1618 (bears). Price is deciding if it has the oomph, or not, to retake these critical moving averages and point the way higher for equities. The 20 under the 50 is a bearish signal moving forward.
The three-day bounce occurs off the 1560 intraday bottom due to the stochastics and money flow positive divergence. The other indicators were not agreeable to the bounce and would rather prefer to take another look at lower numbers. The RSI, stochastics and money flow are at or below their 50% levels in bear territory. The MACD is under the zero line another negative. The 50-day and 200-day MA's are leveling off another indication of topping action. The thin brown lines show the downward-sloping channel in place while the thin blue lines show an expansion-type pattern in play as well (megaphone). The fate of the markets will be decided in the pink circle this week. S&P futures are +7 at this writing less than 3 hours before the opening bell. The bulls have an edge this week since new money enters markets to begin the month, there should be bullishness ahead of the July 4th holiday, Fed heads will be pumping QE talk tomorrow, and the politicians are on vacation again which is a positive for markets when they are not in Washington.
The RSI and money flow never reached oversold levels. The markets bounced four days ago mainly due to China stepping in to prevent a Lehman-type banking crisis last week. This week may simply be sideways slop through 1600-1630 as traders may prefer to wait for next week when all traders will be back from vacations and ready to kick in the summer trading. The purple H&S shows head at 1680-ish, neck line at 1540, so a target of 1400 is in play if 1540 fails. Projection is for lower prices moving forward, back under 1600 and lower, however, if the bulls can take advantage of light volume this week and push the SPX above 1623, then markets may experience a couple weeks of buoyancy with a move back up to 1636 and 1649-1650 R on tap. 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.
The rising wedge, overbot conditions and negative divergence created the spank down off the top six weeks ago. The MACD cross occurs (blue circle) signaling further trouble ahead. The indicators are all weak and bleak except for the RSI that created the market bounce last week. Note how price parked itself at the 20-week MA at 1587 a week ago, and held that level last week, so look for this moving average to play a key role moving forward. A downward-channel is in place with lower lows and lower highs. Price may want to test the critical 1618-1623 resistance gauntlet, the upper rail of the channel, where a bounce or die decision will be made. Volume last week, for the upside, was below the selling volume the prior week. Stochastics and money flow are under the 50% levels so watch to see if this is maintained, or not, and if the RSI drops under the 50% level into the bear camp, or not. The SPX may bounce, especially in this holiday-shortened week, but the projection is lower prices for the weeks 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.
June ends last Friday and the monthly chart finally prints a negative month after seven straight up months. Markets were agreeable to rolling over in late 2012 but the Fed saved the day again with QE Infinity. The BOJ chimes in by weakening the yen this spring which creates the new all-time highs in the U.S. indexes as well as calm in Europe since the easy money bot stocks and bonds across the pond. Price is at the upper band limit and spiked up through for the last two months. The rising wedge, overbot conditions and negative divergence all say the top is in. The October 2007 top was verified by the MACD cross (blue circle) so watch this closely over the next month or two. If the MACD cross occurs, the markets are toast.
The pull backs during the 4-1/2 year rally sends price to the middle band, the 20-month MA, and this is currently at 1428 and rising. The Iraq War rally began March 2003 so that bull run into the October 2007 top was 55 months. The cyclical bear is October 2007 to March 2009, 17 months. The current cyclical rally from March 2009 to present is 52 months, long in the tooth. The purple circle shows a candlestick tweezer top over the last two months. The chart may want to play around at these levels for one to four months like the 2007 topping action. The 10-month MA is 1511 and rising and serves as an early warning system that the markets will sell off much more. The 12-month MA at 1491 and rising is one of Keystone's cyclical signals and would signal major market turmoil ahead. The markets would be lost under SPX 1491. Projection is lower prices moving forward for the weeks and months ahead. Watch for the potential MACD cross this summer which would clearly point to lower markets 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.
