A follower wanted a quick read on bitcoin which is not in the news as much as it was last year. The NYSE announced plans to launch a Bitcoin Index, the NYXBT, a few weeks ago which adds legitimacy to the fledgling digital currency. The sideways symmetrical triangle has developed during 2015 and price is at and through the apex. A major decision for bitcoin will occur at anytime and will dramatically affect the future for the cyber currency. The vertical side of the triangle indicates that the upcoming move may be about 150 handles.
Bitcoin lost the 200-day MA last August and languishes below ever since. Price should revert back above the 200-day MA at some point forward making bitcoin bulls happy. The slope of the 200-day MA, however, is downward which is a bearish indication. An upside breakout from the triangle pattern would place bitcoin back into the sideways 325-400 range that dominated the October-December 2014 period. Bitcoin news coverage will likely increase in the weeks ahead as price makes the important bounce or die decision from current levels. 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: The chart is courtesy of Bitcoin Charts a very useful site for bitcoin followers and is annotated by Keystone.
The RSI, MACD line and money flow remain weak and bleak in the 2-hour time period wanting to see lower lows in price after any bounce occurs. The 1-hour chart is set up to bounce so meshing the two together indicates that a bounce may occur today in stocks but weakness should reexert itself as the day plays out. The chart above needs at least one to three candlesticks of time to produce positive divergence in the indicators to create a substantive rally which is 2 to 6 hours of trading time which easily takes up today and perhaps into Wednesday morning.
The RSI is in oversold territory and will seek a recovery move moving forward. Ditto the stochastics that will want to see price move higher. The histogram and stochastics positive divergence meshes with the 1-hour chart and will help create a bounce in price. Price is violating the lower band so a move back to the middle band, at a minimum, at 2100 and dropping, is on the table.
The brown lines show the ongoing sideways channels through 2076-2035 and more tightly, 2091-2121. The SPX lost the 100-day MA at 2085 yesterday and the 150-day MA is at 2072. The 50-day MA is at 2101. The 20-week MA is at 2089. Key price support/resistance is at 2108, 2091, 2081, 2076, 2067, 2061 and the starting year number at 2059.
Thus, for Tuesday price should stage a recovery bounce say to the 100-day at 2085 and potentially the 20-week at 2089 and price resistance at 2091; call it 2085-2091. The indicators in the 2-hour chart want to see further weakness so the downside targets perhaps for this afternoon and/or early tomorrow are price support at 2076 and 2067 and the 150-day at 2072; call it 2067-2076.
As always, the central bankers control the stock market so if any of these money printers talk happy talk stocks can rally at anytime; ditto if a Greece solution is announced. S&P futures are -3 about 90 minutes ahead of the opening bell. 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 VIX 200-day MA is a key short term market signal. Market bears win above and bulls win below. Volatility moves inversely to the stock market. The 200-day MA is at 15.20 and the VIX is at 15.29 favoring the bears by nine pennies. This indicator is key for Tuesday trading. Very simply, stocks continue to sell off if the VIX moves higher. If the VIX drops under 15.20, the market selling stops and the bulls will stage a relief rally. 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.
Drilling down into the very short term (VST), the SPX lost the critical 200 EMA on the 60-minute chart at 2108 signaling bearish markets for the hours and days ahead. The market bears run the show as long as the SPX remains under 2108. The green falling wedge, oversold stochastics and RSI, and positive divergence (green lines) point to a recovery bounce in this very short one-hour time frame.
The 100-day MA is 2084.64 and price prints a low 2086 handle today testing this critical support and deciding whether to bounce, or die. The 50-day MA is 2101.19 so a recovery bounce would target the 2100-2101 level. The 150-day MA is 2071.92. So if 2084 fails, 2072 is on the table. If the bulls bounce price from this 2084-2088 area then the SPX will seek 2100-2101. The SPX daily chart (see previous chart) hints that lower lows in price are desired after any bounce in the daily time frame so perhaps a dip to the 150-day MA will be on tap later this week or next week. 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 6/9/15 at 7:25 AM EST: The SPX slid down the rabbit hole yesterday to 2079. Markets deteriorated after confusing comments out of the G7 meetings including President Obama commenting on the dollar which is a no-no. The positive divergence remains so a bounce is expected as described above in this one-hour time frame. S&P futures are -4 recovering from -9 a short time ago. The opening bell is a couple hours away. The 100-day MA at 2084.54 failed yesterday. The 150-day MA is 2071.85. Price may want to recover and back kiss the 100-day at 2085.
Keystone has provided the play by play on the monthly charts over the last year and more monitoring when the multi-year top would appear technically. It's here. May prints a positive month with new all-time record highs. Note, however, the indicators have universally rolled over with negative divergence (red lines). Price is overbot (bearish). The red rising wedge is an extremely ominous bearish pattern as mentioned many times over the last few months. The collapses from rising wedges can be quite dramatic. The MACD cross occurs with the black line under the red line (bearish).
The maroon-colored line shows negative divergence in place compared to the 2007 market top as well. The monthly volume candlesticks show distribution taking place with big selling volumes occurring after the up months. This is the smart money handing off stocks to the dumb money. Retail investors are hyped daily by business television happy talk and are buying at the top as the hedge funds and others dump their shares. Every market top needs a bag holder.
The current price action as reflected in the chart is similar to the October 2007 market top. Can the SPX run higher? Of course it can but the upside appears very limited and there is a high likelihood that the multi-year top is in. The Dow is rolling over in the same manner but the Nasdaq may need a couple more months to properly top out. Regardless, the above chart is very negative. Perhaps the bulls may be able to keep a happy face as they enjoy the beach and summer vacation, but the chart says the end is very near and the multi-year market top may have already printed in May. It is prudent to exit long positions.
The 10-month MA is 2057 and 12-month MA (the cliff) is 2042. Extremely bad things will happen to the stock market under these levels. The 2057 level would be key; if it fails stocks are likely going to collapse in earnest. Going forward, bulls must hold the 2057 level with all their might. 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.
Price continues to decide between the red rising wedge (bearish) versus the green ascending triangle (bullish). One of the two patterns will win. The bulls were throwing confetti in May when price broke up and out of the triangle only to see price collapse again and now fall out the bottom side of the triangle. The SPX continues to honor the upper and lower trend lines of the red wedge as time moves along and price failed below the lower red trend line last week. Monday trading is underway with stocks marginally lower.
The SPX has violated the lower standard deviation band now at 2089 so a move higher to the middle band at 2113 (also the 20-day MA) is on the table. This area would represent a back kiss of the wedge failure. The 50-day MA is 2101.15 and 100-day MA is 2084.62 (not shown). The bulls will be fighting to hold the 100-day MA support. The RSI over the last day, and stochastics now dipping in oversold territory may help lift price but the MACD line, histogram and money flow are all weak and bleak wanting to see lower lows in price after any bounce would occur in this daily time frame. The 2080-2090 level may be an area where a bounce can occur. Selling volume is more robust than buying volume. The SPX drifts lower to print at 20878 on the lower standard deviation band and testing the 100-day MA support. 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 DAX drops under 11160 intraday Friday and in Monday's trade is currently down 56 points, -0.5%, to 11140. This price action tags a -10% correction for Germany. The 12400 top occurs in April so 1240 points lower (-10%) is 11160. The ECB QE program continues but the DAX is going the wrong way. The DAX rocket launched last October from 8500 to 12400 in April of this year, +46% in seven months.
The brown H&S pattern with head at 12400 and neck line at 11750-ish, targets 11K. Price teased lower in May but bounced on happy central banker talk so the DAX may be coming back down for unfinished business at 11K. The indicators are a mixed bag so a recovery bounce is on the table. The RSI is not oversold so price may want to play around in that 10.7K-11.0K congestion zone in the weeks and months ahead. The purple lines show another H&S-like pattern with head at 12400 and neckline at 11250 which would target 10.1K and the neck line is currently ruptured. The 200-day MA is sloping higher which is bullish.
The ongoing ECB QE program into September 2016 is also bullish for European stocks. The odd thing about Europe's QE which Keystone pointed out months ago, is that the European stock indexes were already at or near record highs when QE started. This is different than in the States and in Japan where their respective indexes were beaten down and had plenty of room to run on the Fed and BOJ QE easy money pumps. The ADX shows that the strong uptrend in February and March ended in April. The downward price action is not yet a strong downtrend which makes the DAX bulls happy but if the ADX rises into the pink box in the right margin the downside will become far more substantive. The DAX may stagger sideways from here. 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 chart is not yet updated for China's overnight +2.2% gain to 5132 (purple dot). Chinese Import and Export data overnight is weak, especially imports. The domestic economy is supposed to save China but less imports means people are spending less not more. The weak data is cheered by traders since bad news is good news in these central banker-controlled global markets hence the Shanghai pops another +2.2%. The upside Chinese stock market orgy continues.
The green bull flag pattern played out with the first leg from 2K to 3.5K, a 1500-point gain using round numbers, so the second leg targeted 4.5K from its 3K starting point. Price is moving parabolic up inside the rising red wedge. This type of price action is more typical in commodities trading and never ends well. The red lines show the indicators in negative divergence except for the MACD line that remains long and strong and some two-week juice in the RSI. So the RSI red lines, histogram, overbot and neggie d stochastics will create a spank down but price should come back up to satisfy the MACD line and slight very short term juice in the RSI. This scenario should take place over the next two weeks.
The SSEC monthly chart continues to show long and strong strength so the expectation would be for the Shanghai to top out say later this week, next week, or the week of 6/22/15, not all that much higher from here, maybe 5132-5300, then down for a month or three. Then the monthly chart should reinforce itself and bring price back up again to the current record highs for a potential peak in the second half of this year and then more substantive long term roll over to the downside.
The ADX line is up to 58 firmly verifying a strong uptrend in place (pink box) so this can continue for a while which reinforces the expectations on the monthly chart. Through June into early July, however, in the shorter term, there should be softness after the MACD line peaks and creates neggie d. So now is not the best time to go long this parabolic joy ride. If big gains are enjoyed in Chinese stocks, trimming back is likely a prudent strategy, say cutting one-half the position now and then the other half when the MACD line rolls over during the coming days or week or two. SSEC is not an attractive long from here but perhaps from a summer low in July-September once price pulls back for a rest. 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.
Lots of drama ongoing with the utilities these days. The closing print 15 weeks ago determines if the utilities are in a weekly uptrend or downtrend. The broad stock market is typically in rally mode when the utilities are in a weekly uptrend. Alas, the utes have been in a downtrend and this week's comparison number is 600 from 15 weeks ago. Bulls win big if UTIL moves above 600 by Friday's closing bell. The other thing to watch is the 50-week MA that Keystone refers to as the 'trap-door'. Simply look at the price action over the last three months to verify the importance of this signal. The 50-week MA is 584.38 and if this fails, the stock market will likely drop like a stone beginning at anytime after the failure and typically within about one-half hour's time. The SPX would be expected to dump about 20 or 30-handles quickly.
The bulls have been successful at preventing the 50-week MA failure and in March when things fell apart, and May, the bulls quickly recovered. This is another cyclical indicator so lump it in with the previous NYA 40-week MA cross and UPS 20/50-week MA cross charts. The stock market will be in serious trouble if UTIL 584.38 fails. If price stays above 584.38 and moves higher the market bulls are fine.
Note that the 15-week lookback number for next week is 594 and then two weeks from now down to the 570 level thus the comparisons become easier to make the bulls happy. If the bears are going to push the broad market lower they better begin the move this week or next, otherwise, the bulls are going to gear up for a summer party instead. The sideways triangle indicates that a break up or down is imminent anytime over the next couple weeks and the move may be about 50 handles (650 target on upside or 540 target on downside). 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 6/8/15: The utilities failed last week dropping to a low at 560.10 not seen since last October in this morning's trading.
Two of Keystone's key cyclical market indicators are in conflict. One of them is wrong. If you are more of an intermediate term trader (weeks and months), place these two charts on the top of your watch list. The NYA is above the 40-week MA signaling a cyclical bull market ahead. Keystone has described in detail the prior failures and how the central bankers collude to create the recoveries. The UPS negative 20/50-week MA cross occurs signaling a cyclical bear market ahead ending the multi-year cyclical bull.
Market bulls will cheer if the UPS 20-week MA crosses back above the 50-week MA since it signals a happy bull party continuing for weeks and months ahead. UPS price is under the 20-week MA and as long as that is the case the moving average will actually be pulled lower. Market bears will cheer if the NYA loses the 40-week MA. The central bankers have performed four stick-saves of the NYA since last October. If another failure occurs, can the central bankers muster up another stock market pump or is there pump pooped out?
Watch the above especially if you are a longer term trader. If remaining long you better rethink your thesis when the NYA loses the 40-week. The bears will be smacked in the face again if the UPS 20-week regains the 50. 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 6/8/15: The NYA is at 10957 and 40-week MA is at 10889 only 68 points away but the bulls continue to rule this market signal. UPS price is at 99.95. The 20-week MA is 98.98 and the 50-week MA is at 100.37 so the market bears remain in good shape with this indicator. One of these two will flip sides and tell you the intermediate term direction forward for the stock market.
