SPX Daily Chart New All-Time Record Highs

The bulls appear unstoppable. The SPX prints a new all-time intraday high at 1941.74 and new all-time closing high at 1940.46. The Dow print new all-time highs as well and the trannies print a new all-time intraday high. Interestingly, the ECB announcement did not create much movement in Typically, for example, on days the Fed announced happy stimulus measures, the SPX popped about 25 to 30 handles on average. So a 13 handle gain is roughly one-half of prior joy. Perhaps another 13 points of upside are added today, or, there is simply not much bang for the buck. The euro is actually higher than before the ECB announcement; moving opposite of the desired effect.

The tight bands squeeze out the upside move. Price thrusts higher to tag the upper band again so the move back to the middle band, now at 1900.36 and rising, is on the table. A back kiss of the 20-day MA, same number, is also needed. So perhaps price will relax back down to 1900-1910 next week to take a breather. After any pull back the near-term RSI, MACD and money flow all show long and strong behavior wanting another price high before they likely set up with negative divergence like the stochastics and histogram already are. RSI and stochastics are now overbot. Negative divergence remains  universal in the multi-month time frame. Pay attention to the past indicator levels to see if the neggie d remains in place which will continue to forecast sideways to sideways lower markets ahead despite the near-term joy.

Volume yesterday was  bit higher but remains below the selling levels prior to the breakout. The upside orgy is creating gaps that will need filled over time. Projection is for a pull back in the near-term but the indicators want to see these price levels again next week, then the chart should set up with firm negative divergence across the board for a more sustainable downward move. 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.

Euro Daily Chart

Draghi's mini-bazooka has not succeeded in driving the euro lower. Granted the euro pulled back from 1.40 down to 1.36 in anticipation of the easing announcement over the last month. The euro collapsed on the news to 1.3503 unable to break under the psychological 1.35 level, and bounced. Traders shorting the euro frantically ran to cover creating the launch higher to the same level as before the announcement. The euro is actually now higher than before the announcement. 

The idea behind the ECB lowering rates, creating a negative deposit rate and implementing other stimulus measures is to weaken the euro so the European manufacturers and exporters can gain an advantage and start to jump-start the sick economy. Perhaps Draghi needs a bigger bazooka like the full-blown QE money bazooka. The ECB's action yesterday is like the famous, and hilarious, clip from a Crocodile Dundee movie. The ECB pulled out a knife to weaken the euro. The euro pulls out a knife a lot larger and comments, "that's not a knife, this is a knife."

The deflationary scenario remains on the table for Europe moving forward. Once a country or region falls into a deflationary spiral, a la the two-decade Japan deflationary funk ongoing and the Great Depression deflationary funk that extended the pain back then, it is very hard to recover. Consumers cut back on spending (which is occurring globally currently) and see no reason to buy since in deflation things will be cheaper next week. This causes businesses to close and lay off workers which creates the downward spiral. The central bankers fear deflation the most since they are likely powerless against it if it appears in force and begins accelerating. 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.

RUT Russell 2000 Small Caps Daily Chart Price Bounces from Correction Level 150-Day MA Slope Flattening for Potential Cyclical Bear Market Potential Death Cross

The pink lines show the 1212 top and 1191 level which constitutes a -10% correction. As soon as price logged the correction phase for small caps, boom, the bulls rush in to buy and send price higher avoiding the -10% correction. The death cross (50-day MA under the 200-day MA) for the RUT is probably only about one week away. The blue chip divvy stocks continue to catch a bid, stocks such as AAPL, XOM, JNJ, BRK/A and others, while the smaller caps leak lower which is the expected behavior at market tops. The monitoring of the 150-day MA slope continues since a negative slope, should it occur, will indicate the exact conception of a cyclical bear market that would likely run for a year or three.

The last few readings for the 150-day MA are 1140.07, 1140.23, 1140.29 and 1140.35. Remember a week or so ago the differences each day were about 20 cents or so. Now the differences are 16 cents, 6 cents and 6 cents, respectively, pulling in tight. Visually, you easily see this with the 150-day MA green line above where it slopes up steeply with large differences between each print and then in recent days note how the slope is flattening and perhaps ready to roll over to the downside. If the slope turns negative (for today that would mean the 150-day MA ends the day at 1140.34 or lower), it identifies the start of a cyclical bear market for the stock market. Currently, the slope continues higher verifying the ongoing cyclical bull market. Of course if the bulls send price higher the 150-day MA will move higher and the bulls will remain in control with the bears left at the altar once again. If the 150-day MA slope turns negative and rolls over the bears will be stabbing the bulls finally bringing the beast to its knees after the five-year plus cyclical bull rally.

So watch the 150-day MA daily from here on out as well as the potential death cross. The blue circles show open gaps that will need filled. Note how the bears buttoned up price the whole way down not leaving any gaps behind and the gap they did leave they came up six days ago to button that up. Thus, price has no reason to ever move higher again from a gap-fill perspective. The 150-day MA also acts as a resistance ceiling for price over the last few days and as long as price is under the 150 the moving average number will continue to drop. Use all four moving averages above as key S/R levels to tell you if price is breaking out to the upside, or, collapsing to the downside. Bulls want 1133-1140 and higher. Bears want 1117-1120 and lower. This information is for educational and entertainment purposes only. Do not invest based on anything you read or view here. Consult your financial advisor before making any investment decision.

Note Added 7:23 AM on 6/6/14: The RUT launches higher to 1154. Picking up from the Tuesday print of the 150-day at 1140.35, the Wednesday print is 1140.43 and Thursday print is 1140.65. So a difference of 8 cents and 22 cents occur, respectively, allowing the bulls to remain firmly in the driver's seat. The 150-day MA was flattening but now the difference between each day's numbers are increasing showing this critical moving average moving higher again crushing any bear hopes for a cyclical bear market to develop, however, it is only a couple days, and considering the important jobs report is only an hour away, markets may need well into next week to chew on things and decide direction.

BitStamp Bitcoin Price Daily Chart Sideways Symmetrical Triangle

The green sideways symmetrical triangle was highlighted as it developed with the only question which way would price break out. The red descending triangle was in play but price kept avoiding the base line failure and continued higher honoring the sideways triangle pattern instead. The vertical side of the triangle is 180 handles. Price commits to the bull side at 450+ so the target is 630 (450 + 180) which is achieved. The circles highlight strong volume days. The 450 price level is very solid support. Also 530-ish and 575-ish. Bitcoin will likely stagger sideways. Watch to see if it can hold the 575, if so, then a sideways range of 575-700 will likely develop. If 575 fails, a sideways move through 450-650 may develop.

Bitcoin receives a boost after AAPL reverses decisions made months ago and now will allow selective apps to employ bitcoin. Big wigs in Silicon Valley are backing bitcoin so they must have gave the strong arm to Apple. Bitcoin should always be viable and successful if it stays above the 450 level and especially above the 530 level. 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.

Keystone's Morning Wake-Up 6/2/14; PMI's; ISM

The SPX logs another up month for May. On Friday, 5/30/14, the SPX prints a new all-time intraday high at 1924.03 and new all-time closing high at 1923.57. Is it time to "Sell in May and Go Away?" The bulls keep powering higher with a Caligula-style upside orgy fueled by QE easy money still pumping $45 billion into the economy each month. Today is the first trading day of June. June begins at 1923.57. Usually new money enters the market for a new month creating lift. Interestingly, Keystone's 80/20 rule (8's lead to 2's) works more often than it does not with the SPX 1280 level serving as a predictor of 1920. Price pierced 1923.80 on Friday so 1924.20 may be on tap. The 1918 led to 1922. The 1928 level, if achieved, would hint at 1932.

The BPSPX is at 76.60 and continues higher remaining on a market buy signal. Everything is going the bull's way although the volume for the stock market move higher is light over the last two weeks. It is easier to push markets higher on thin volume. The 8 MA is above the 34 MA on the SPX 30-minute chart signaling bullish markets for the hours ahead. Bears got nothing without a negative 8/34 cross on the 30-minute.

Key support below is 1924, 1920, 1912, 1901-1902, 1897 and 1891. Big picture support is 1924, 1897, 1884, 1878, 1848 and 1841. A back kiss of the 1912 support level, an important break-out area, and the 20-day MA at 1890.07, and rising, is expected moving forward. Price is violating the upper standard deviation banks on the SPX daily chart for five consecutive days which typically forecasts a move back to the middle band which is the 20-day MA.

Keep watching the slope of the 150-day MA for RUT since this will indicate the exact conception of a cyclical bear beginning and the five-year-plus rally over. The 150-day MA continues to flatten but has not yet turned negative so as long as the moving average is flat or higher the bulls continue to par-tay. The low volatility is a warning sign that something is likely not right under the surface of the markets. ECB's Draghi announces the stimulus program on Thursday morning so markets may be in a holding pattern until then.

Keybot the Quant remains long and the algo is in overbot territory which does not occur often. Keybot signals that the bulls are in clover enjoying the non-stop upside, however, at the same time, overbot conditions indicate that there may be no where to go but down once price does roll over. The market bears likely need a stronger dollar to send copper and commodities lower to stall the rally, however, China PMI was better than expected adding a boost to copper today. On the esoteric side, Keystone's Eclipse Indicator identifies 5/22/14 as having potential for a major market top give or take a couple weeks. This window will close this week so if the market bears plan on moving equities lower they had better start this week.

The SPX 2-hour, 1-hour and 30-minute charts are setting up with or set up with negative divergence so topping in price would be expected today, however, with Draghi on tap in three days, markets may stumble sideways more than anything until the ECB decision. The SPX closed near the high at 1924 on Friday so any tiny smidge of green in the S&P futures will create several more handles of upside for the SPX towards 1930 and the S&P futures are +2.5. The bears need to push under SPX 1917 today to regain their downside mojo. A move through SPX 1918-1923 is sideways action for Monday. ISM Mfg Index is 10 AM which may create a market stutter step. Markets will likely chop sideways through 1900-1950 and weaken under 1900 and lower as the weeks play out towards Labor Day; sideways to sideways lower as the year moves along. Does "Sell in May" begin today?

SPX 30-Minute Chart 8/34 MA Cross

The 8 MA is above the 34 MA signaling bullish markets for the hours ahead. Negative divergence is in play (red lines) wanting to see weaker prices although the bulls are trying to develop some VST momo. The bulls, backed by the central banker easy money, continue to frustrate bears by reversing any negative 8/34 cross such as 7 days ago. Even as the 8 MA starts to flatten and roll over to the downside the bulls step in with a big goose, as the green arrows show, keeping the 8 MA elevated above the 34 MA and maintaining the Fed booze party higher.

The 2-hour and 1-hour charts are set up or setting up with negative divergence so market weakness is anticipated; a sideways to sideways lower move. With the ECB rate decision only three days away, the markets will likely favor a sideways move until Draghi brings the tablets down from on high and directs global markets on how to trade. Therefore, any weakness early in the week may recover by mid-week as Draghi decides the fate of all markets on Thursday. Bulls are in full control with the positive 8/34 cross. Bears got nothing without the negative 8/34 cross. 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 Weekly Chart Upward-Sloping Channel Overbot Rising Wedge Negative Divergence Developing

The smack down to begin the year was an easy call with the overbot conditions and universal negative divergence. The bulls are relentless, however, fueled by the Fed and other central banker easy money, and continue printing new all-time highs. Despite the QE tapering, the Fed continues to goose the stock market at $45 billion per month. Note the last time that price touched the lower standard deviation band (pink circle) was November 2012. This is very atypical and unusual market behavior and clearly the reason that markets do not properly correct is the central banker intervention.

The red rising wedge, overbot conditions and universal neggie d across the multi-month time frame is holding in place and wanting to see lower prices for the weeks and months ahead. Money flow is cooked with neggie d  in all time frames. In the VST, however, over the last month, with the strong performance in May, the bulls are creating short term long and strong juice (short green lines) and also have created a positive MACD cross. The move higher over the last couple weeks is on very light unimpressive vapor for volume.

The expectation is for choppy sideways behavior ahead; a pull back but then a price recovery again due to the VST momo but the multi-month negative divergence should win the day creating sideways to sideways lower prices for the weeks and months ahead. Note that the apex of the rising wedge allows a price move to 1925-1950 before a collapse out of the wedge would be expected. Price is at the upper band and extended above the moving averages requiring a mean reversion lower. Overall, the projection is sideways to sideways lower moving through 2014. The bears need to reverse the MACD cross, otherwise, the bulls will keep extending the market buoyancy. 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.

Keystone's June Seasonality Factors for Trading the Markets

The "Sell in May and Go Away" expectations are no where to be found, so far, as May logs a strong up month. The month of June is typically up about +0.2% on average so a flat to small gain would be expected for this month. The largest stock market gains are made from November thru April while markets are typically flat from May thru October. The tech sector slows thru the summer. The homebuilders tend to be weak April thru July.

June is the kickoff for Hurricane Season. The season ends in early November. When a hurricane starts moving across the Atalntic Ocean headed for the East Coast or Gulf, oil and natty gas prices typically escalate in response to oil rigs and terminals shutting down for the storms. Home-supply stores such as HD and LOW typically move higher as hurricanes approach. The news channels will run video clips of patrons leaving the stores with plywood (to board up windows), generators and other storm preparedness items to whip up the excitement. GNRC supplies generators and catches a bid each time a storm develops. URI supplies rental equipment once the storm clean-up begins. Also take a look at insurers such as ALL. Other possible hurricane plays are HRC, NUE, OC and TTC.  Electric and energy grid companies are worth watching as well such as MTZ, MYRG, GE, ENOC, AMSC, CPST, PWR, SSNI, etc...

May and June typically hosts many conferences in such sectors as banking and biotech with traders already positioned ahead of time. The ASCO cancer conference and ADA diabetes conferences occur in May-June so tickers such as JNJ, CELG, SPPI, BMY, AZN, ALKS and others may see activity. Markets have been down 20 of the last 23 times for the week after June triple witching; this is the week of 6/23/14. Russell 1000 and 2000 rebalancing typically occurs at the second to last Friday which would be 6/20/14 this year causing lots of volume and movement in the tickers affected for the end of the month.

June is the official end to the second quarter, EOQ2, and the end to the first half of the year, EOH1. Window dressing comes in to play to end the month of June since it is quarter and half-year end, so typically market buoyancy occurs in the final week of June. This conflicts with the down week expected after OpEx so this year the OpEx week of 6/16/14 may be weaker than expected moving into the window dressing. The last couple days of June typically finish flat. Thus, the back half of June is typically weak the week after OpEx but then markets recover moving into the end of the month. Markets tend to develop a trading range for the summer months. June is typically a bad month for the XHB, XLI, XLF, XLP and XLY sectors.

Keystone's Eclipse Indicator targets 5/22/14, give or take a couple weeks, as an area where a major market top may occur. This window closes this week so if the market bears are going to run lower now is the time.

The ECB Rate Decision and Press Conference is Thursday, 6/5/14, and Draghi is expected to provide stimulus to weaken the euro and help Europe recover from the economic malaise. The Monthly Jobs Report is Friday, 6/6/14. Retail Sales 6/12/14. A full moon occurs 6/13/14, Friday the 13th, and markets are typically bullish through the full moon. Housing Starts are 6/17/14. The FOMC Meeting and Rate Decision is Wednesday, 6/18/14. Markets are typically bouyant on OpEx Monday, 6/16/14, and typically rally from a Tuesday low, 6/17/14, into a Wednesday high, 6/18/14. OpEx is Friday, 6/20/14. Consumer Confidence 6/24/14. GDP 6/25/14. A new moon occurs on 6/27/14 and markets are typically bearish moving through the new moon. Markets typically log a down week after OpEx although window dressing will be in play at the end of the month. The month ends on Monday, 6/30/14; EOM, also EOQ2 and EOH1.

SPX Monthly Chart Overbot Rising Wedge Negative Divergence

The monthly charts all receive new prints on Friday. The SPX logs another up month continuing to tease the top trend line of the red rising wedge. The SPX prints a new all-time intraday high at 1924.03 and new all-time closing high at 1923.57. Getting negative divergence to set up in all time frames for all indicators can be tricky like herding kittens. But a market top, that is very likely a significant multi-year top, is very close. The central banker money is powerful and has nullified any chance of a market downturn of any significance for the last 200 handles.

The tops are straight forward enough to identify as they occur but the markets are displaying rare behavior by staying elevated for months on end (due to central banker easy money) and refusing to back test moving averages as would be typical market behavior. The rally from the March 2009 bottom is now 5 years and 3 months long one of the longest market rallies in history that desperately needs a rest.

Money flow is cooked both from the 2007 top to now and over the very short term (last few months) with negative divergence. Ditto the stochastics that are overbot and keep bumping into the ceiling and have no where to go except down. The RSI is negatively diverged compared to the 2007 top as well as over the last several months but over the last three months has eeked out a smidge of long and strong behavior. The histogram is negatively diverged for the last four years wanting to see price drop. The bulls latch on to the MACD line, however, and ride this indicator upwards. Note that the MACD line continues to slope upwards so even after a pull back in the monthly time frame price likely wants to come up for another look at these levels, when the RSI and MACD line should then be firmly negatively diverged, and then begin a more substantive and extended long-term down move.

Therefore, a jog move would be expected going forward (down-up-down) where price drops due to the ongoing negative divergence, then recovers due to the long and strong MACD line, then rolls over creating a multi-year top as all indicators will be negatively diverged across all time frames. Thus, a reasonable projection is down in June, then a recovery in July placing a multi-year top. The alternate projection is that markets simply place the multi-year top at the current price levels and head lower from here for the months and perhaps years ahead.

Remember, the collapses from rising wedges can be quite dramatic. The vast majority of traders are very complacent and worry-free, as evidenced by the low VIX and put/call ratios, and do not expect any pull back of any significance to occur. The Fed wine is flowing like water. 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 Support, Resistance (S/R), Moving Averages and Other Important Levels for Trading the Week of 6/2/14

SPX support, resistance (S/R), moving averages and other important levels are provided for trading the week of 6/2/14. Levels shown in bold are strong resistance and support. Bold and underlined levels are very strong and important S/R. The SPX prints new all-time highs piercing the 1900 level and running higher ever since.

The SPX prints a new all-time intraday high at 1924.03 and new all-time closing high at 1923.57. The Dow ended the day a hair away from printing new all-time highs. TRAN is printing new all-time highs.

For Monday, the bulls only need a smidge of green in the overnight S&P futures, which will send the SPX above 1924, and the upside orgy will continue to 1930. The bears need to push under 1917 to create a downside acceleration. A move through 1918-1923 is sideways action to begin the week. A new month begins (June begins at 1923.57 so write this number down for reference over the next four weeks) and markets are typically positive during the first days of a new month. China PMI released a few hours ago is better than expected which may create a boost to equities. The European PMI's will hit in the morning as well as the ISM Mfg Index in the States.

Key support below is 1924, 1920, 1912, 1901-1902, 1897 and 1891. Flying at 40,000 feet above it all, the big picture support is 1924, 1897, 1884, 1878, 1848 and 1841. A back kiss of the 1912 support level, an important break-out area, and the 20-day MA at 1890.07, and rising, is expected moving forward. Price is violating the upper standard deviation banks on the SPX daily chart for five consecutive days which typically forecasts a move back to the middle band which is the 20-day MA.

The bulls have near-term momo on their side so even after any pull back over the next day or two, price should come back up to test current levels again as the next several days play out where the charts should then set up for more substantive downside. With Draghi set to bring the tablets down from on high on Thursday morning and announce the ECB stimulus program, markets may simply idle sideways for the first-half of the week. If equities sell off they will probably recover into Wednesday afternoon as traders await for King Draghi, one of the central bankster interventionists, to dictate how global markets move.

1924.03 Previous Week’s High

1924.03 Friday HOD

1924 (5/30/14 All-Time Intraday High: 1924.03) (5/30/14 Intraday High for 2014: 1924.03) (5/30/14 All-Time Closing High: 1923.57) (5/13/14 Closing High for 2014: 1923.57)

1923.57 June Begins Here

1923.57 Friday Close – Monday Starts Here

1920

1917

1916.64 Friday LOD

1912

1910

1907

1902.01 Previous Week’s Low

1902 (5/13/14 Intraday Top: 1902.17)

1901

1897 (5/13/14 Closing High: 1897.45) (4/4/14 Intraday Top: 1897.28)

1894

1891 (4/2/14 Closing High: 1890.90)

1890.07 (20-day MA)

1889

1886.68 (200 EMA on 60-Minute Chart a Keystone Market Turn Signal)

1886

1885

1884 (3/21/14 Intraday Top: 1883.97) (3/7/14 Intraday Top: 1883.57)

1882

1880

1879

1878 (3/7/14 Closing High: 1878.04)

1877

1874.56 (50-day MA)

1874

1872

1871

1868

1867

1865

1862

1859

1855

1853

1852.84 (20-week MA)

1852.72 (100-day MA)

1852

1851 (1/15/14 Intraday Top: 1850.84)

1849 (12/31/13 Intraday High Top for 2013: 1849.44)

1848.36 Trading for 2014 Begins Here

1848 (1/15/14 Closing High: 1848.38) (12/31/13 Closing High for 2013: 1848.36)

1846

1845

1843

1842

1841

1840

1839

1838

1837

1835

1833.08 (150-day MA; the Slope is a Keystone Cyclical Signal)

1832

1831

1828

1827

1824

1820

1816

1814 (11/29/13 Intraday Top: 1813.55)

1812 (12/9/13 Intraday Top: 1811.52)

1810

1809 (12/9/13 Closing Top: 1808.37)

1808

1807 (11/27/13 Closing Top: 1807.23)

1806

1804.71 (10-month MA; a major market warning signal)

1803

1801

1800

1799 (11/18/13 Intraday Top: 1798.82)

1798 (11/15/13 Closing Top: 1798.18)

1796

1795.79 (200-day MA; not tested for 1 year extremely odd behavior)

1793

1791

1788

1785

1783

1782

1781

1778.26 (12-month MA; a Keystone Cyclical Signal) (the cliff)

1777

1776.05 (50-week MA)

1775 (10/30/13 Intraday Top: 1775.22)

1772 (10/29/13 Closing Top: 1771.95)

1770

1768

1763

1762

1759

1756

1752