SPX 60-Minute Chart 200 EMA Cross

The SPX continues the fight for the 200 EMA on the 60-minute at 2102.27. Price is under the 200 EMA signaling bearish markets for the hours and days ahead but flip a coin in these markets. Bulls and bears are duking it out with no clear winner as yet. Bulls win big above 2102.27. Bears win big under 2102.27.

The chart above is in conflict with the 30-minute chart that shows the 8 MA above the 34 MA signaling bullish markets for the hours ahead so one of them is wrong. Either the chart above turns bullish or the 30-minute chart will turn bearish (8 MA under the 34 MA) and the outcome will tell you market direction for the short term ahead. 

The green lines for money flow and very short term on the MACD line show long and strong behavior wanting another higher high. Price may want to come up to test today's high at 2107 again. Price will roll over when the neggie d (red lines) are universal across all the indicators. 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 Thursday, 6/18/15, at 11:03 AM:  The SPX launches higher to 2119 with the SPX far above the 200 EMA so the bulls win.

Keystone's Evening Nightcap 6/17/15; FOMC Rate Decision, Forecasts and Fed Chair Yellen Press Conference Play by Play

(As always, the trading day's price action is explained on Keystone the Scribe's site. Reference Keystone the Scribe for further color and detail including the entire day's chronology and jump-start on tomorrow.)

Picking up the action shortly before the FOMC announcement;

At 1:30 PM EST (8:30 PM in Greece), thousands take to the streets in Athens with worries of violence increasing as night falls. The bailout crisis is reaching a peak likely this weekend with only days remaining before the large debt payment is due to the IMF. Greeks are concerned about what will happen to their country if a default occurs.

At 1:35 PM, the US 10-year yield is 2.39% taking out yesterday’s high yields. USD 94.90.

 Moving into the Fed decision at 1:54 PM, SPX 2091. INDU 17864. COMPQ 5048. RUT 1268. VIX 15.34. Euro 1.1255. Euro/yen 139.83. Dollar/yen 124.24. Pound 1.5731. USD 94.92.

WTIC oil slips under 59 to 58.99. Brent oil 62.72 well off the high above 65 this morning. Natural gas 2.85. Gold 1179. Silver 16.01. Copper 2.6120.

US Treasury yields are; 2-year 0.73%, 5-year 1.73%, 10-year 2.39%, 30-year 3.12%. German bund 0.812%.

At 1:58 PM, the insider traders must know something with stocks jumping higher. SPX 2094. INDU 17889. COMPQ 5053. RUT 1269. WTIC oil 59.11. Gold 1178. 2-year yield 0.73%. 10-year yield 2.39%.

At 2 PM EST, the FOMC leaves rates unchanged as expected. The Fed upgrades the economy modestly and says there is progress towards meeting the rate hike criteria. The pace of job gains increases. Unemployment is steady. The Fed says there is moderate growth in household spending. Business fixed investment is soft and exports are soft. Energy prices are stabilizing. VIX drops to 15.03 sending stocks higher. The SPX jumps to 2100.

The Fed statement contains no explicit wording on when the first rate hike will occur but the member forecasts, the dot plot, indicates that 10 members are looking for a 0.63% or higher funds rate this year (which would be two rate hikes by the end of the year) and 15 members are at 0.38% (at least one hike this year).

At 2:03 PM, the US dollar index is dropping. USD 94.64. VIX 14.71. 2-year yield 0.69%. SPX is above 2100. The initial reaction by traders is that the Fed remains dovish with no firm plan on when to hike rates despite members predicting at least one hike, or more, this year.

At 2:05 PM, USD 94.68. Treasury yields are; 2-year 0.71%, 5-year 1.69%, 10-year 2.363%, 30-year 3.11%.

At 2:07 PM, the four major indexes are up uniformly +0.3%. VIX 14.53. TRAN -0.7%. Euro 1.128. Dollar/yen 123.94. WTIC oil 59.43. Brent oil 63.20. 10-year yield 2.35%.

At 2:09 PM, the SPX peaks at 2102 and begins retreating lower. Gold 1181. WTIC 59.72.

At 2:17 PM, SPX 2100. INDU 17936. COMPQ 5064. RUT 1261. US 10-year yield is 2.32%. German bund 0.812%.

At 2:30 PM, Fed Chair Yellen takes the stage and reads a prepared statement. The SPX pops from 2095 to 2099. Yellen, Queen of the Doves, says, “Conditions for a rate hike are not yet achieved.” Yellen says progress is occurring towards maximum employment. USD 94.65. In her characteristic talking out of both sides of her mouth, she says, “Weakness in the labor market remains.”

Yellen says inflation runs below target. 10-year yield 2.35%. WTIC oil 59.77. SPX 2099. INDU 17928. COMPQ 5062. Yellen says committee participants are reducing their growth rate forecasts. She says, “Downward pressure on inflation (deflation) is abating.” Transitory factors have impacted the economy. USD 94.58. WTIC 59.83. 2-year yield 0.68%. 10-year yield 2.33%. Gold 1183.

At 2:40 PM, as Yellen continues with the statement, the SPX is back to 2102 at the highs directly after the 2 PM announcement and moving higher. INDU 17943. USD 94.50. VIX 14.43.

At 2:43 PM, SPX 2104. VIX 14.34. Dovish Yellen knows how to pump stocks higher. There are no plans for a rate hike so stocks jump higher. Yellen says the first hike is data dependent continuing to kick the can down the road.

The Q&A continues and Yellen is asked why member forecasts point to one or two hikes this year but her comments remain reserved. SPX 2105. Yellen keeps singing the “data dependent” song. All Hail Yellen, Queen of the Doves, and champion of the wealthy in America that own large stock portfolios that are filthy rich from her dovish policies. To Hell with the middle class and poor. Let them eat cake.

At 2:47 PM, SPX 2107. The SPX gains 16 handles from before the announcement at 2 PM. The wealthy elite high-five each other and order caviar and champagne for tonight’s celebration. The Dow is up 80 points. USD 94.38. Since Yellen says the conditions are not met to justify a rate hike, stocks move higher.

At 2:50 PM, as the question period continues, SPX 2105. INDU 17979. COMPQ 5076. RUT 1271. Interestingly, the Russell 2000 small caps do not take out the highs from 2:10 PM after the initial announcement but the S&P 500, Dow and Nasdaq does. The VIX is at the day’s lows at 14.14 providing bull fuel.

At 2:55 PM, SPX 2106. VIX is 14.11 printing new lows. 2-year yield 0.665%. 10-year yield 2.31%. USD 94.30.

At 2:56 PM, Yellen keeps tap-dancing around the soft-ball questions. Reporters provide no follow-up or rebuttal to her answers. They sit there like puppy dogs lapping up her answers. VIX drops to 14.08. SPX 2106. TRAN -0.3%.

At 2:58 PM, Yellen is asked if a rate hike will occur this year. She says most participants feel a rate increase this year is appropriate. VIX 14.11. Yellen says ‘we could see data ahead that would justify the dot plot projections but no decision has been made on the timing of the first rate increase’. She follows up saying, “Certainly a rate increase is possible this year.” SPX 2105.

At 3 PM, Yellen says ‘independent of the timing of the first hike in September or December or March, the rise will be gradual’. VIX 14.13. SPX 2104.

At 3:03 PM, VIX 14.19. SPX 2103. Yellen says, “We will respond to incoming data.” At 3:04 PM, VIX 14.26. SPX 2103. The four major indexes are up +0.3%. Euro 1.1332. Dollar/yen 123.36. Pound 1.5822. WTIC oil 59.94. Gold 1187.

At 3:07 PM, the Q&A continues. VIX 14.30. SPX 2102.

At 3:08 PM, the SPX is 2103 fighting against the overhead resistance 20-day MA at 2106 and 50-day MA at 2104. Thus, the 2104-2106 level is a key pivot with market bulls winning big above and bears winning big below.

At 3:11 PM, VIX 14.42. SPX 2101. Yellen better quit while she is ahead. Yellen is questioned on Greece and if it is impacting her decision on the first rate hike. Yellen hopes the European leaders will find a way to resolve the Greece situation. She says if a resolution is not achieved global markets will be disrupted. VIX 14.39. SPX 2103.

XLE -0.1%. Materials are strong. XLB +0.5%. XLF flat. Consumer discretionary moves higher since higher stock prices, that benefit the wealthy, will continue supporting luxury spending. XLY +0.5%. Consumer staples are higher as traders buy defensive stocks that provide a dividend. XLP +0.6%. Homebuilders trade lower. XHB -0.2%. XLV +0.2%. Rates drop so utilities move higher. XLU +0.8%. TRAN -0.3%.

At 3:18 PM, VIX 14.26. SPX 2105. Euro 1.1358. Dollar/yen 123.24. Pound 1.5845. 10-year yield 2.317%.

The press conference ends at 3:30 PM. Stocks popped at 2 PM on the initial announcement, then retreated slightly, then ran higher once Yellen began speaking. The takeaway is that the Fed would like to hike rates this year but remains noncommittal the same position as before the FOMC drama this afternoon. Those looking for a firm strong hint as to when rates will begin moving higher are disappointed but the ongoing dovishness provides lift to stocks.

At 3:33 PM, VIX 14.15. SPX 2103. INDU 17957. COMPQ 5072. RUT 1270. The major indexes are up uniformly +0.3%. Euro 1.1335. Dollar/yen 123.37. Pound 1.5828. WTIC oil 59.82. Brent oil 63.67. Gold 1187. Silver 16.19.

Treasury yields are; 2-year 0.65%, 5-year 1.62%, 10-year 2.31%, 30-year 3.086%. The 2-10 spread is 166 bips indicating a steepening yield curve after the FOMC.

Minutes into the closing bell, the SPX is at 2100 off the highs. Greece PM Tsipras announces plans to meet with President Putin on Friday. The Greece bailout games continue.

The day ends with the SPX gaining 4 points, +0.2%, to 2100. The Dow gains 30 points, +0.2%, to 17935. The Nasdaq is up 9 points, +0.2%, to 5065. The RUT gains 1 point, +0.1%, to 1268. VIX 14.50. USD 94.26. 

Keybot the Quant Turns Bullish

Keystone's trading algo, Keybot the Quant is back on the bull side. More info is found at Keybot's site;

Keybot the Quant

Keybot the Quant Turns Bearish

Keybot the Quant flips bearish this morning at SPX 2080. More information is found at Keybot's site;

Keybot the Quant

SPX 60-Minute Chart 200 EMA Cross

The SPX drops under the 200 EMA on the 60-minute at 2105.45 signaling bearish markets for the hours and days ahead. Price closed exactly on the 200 EMA on Wednesday and in Thursday trading the bulls ran higher above the 200 EMA so it looked like a slam dunk for higher equities. Today, however, is a different story as the SPX collapses through the 200 EMA.

The green lines show the oversold conditions, positive divergence in the indicators and falling wedge pattern that conspire to create the recovery rally, which occurred starting on Tuesday. The top and high print yesterday comes with overbot stochastics and some negative divergence (red lines) but technically the top is shaky. The RSI never reached overbot territory and the MACD line kept moving higher with the price high seven candlesticks ago; so the expectation would be for price to come back up again, which it did, but it did not come back up for a matching or higher high as would be expected. The bears would be better off if price came back up to 2115 three candlesticks ago to place a more firm market top. Thus, the door remains open for another rally move higher for stocks. This would be in concert say with a potential Greece bailout resolution this weekend or early next week. The SPX 2-hour chart is showing the same behavior as described so the price move lower to begin today is met with a bit of skepticism.

The uber low CPC and CPCE put/call ratios signal a market top at anytime over the coming days so the bulls may pull a tricky maneuver and bring the SPX higher again especially if the Greece bailout drama is resolved. For now the bears are in charge. Use the 200 EMA at 2105.45 as the line in the sand. Bulls win big above 2105.45. Bears win big below 2105.45. The SPX recovers as this message is typed now printing at 2100. 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.

CPC and CPCE Put/Call Ratios Daily Charts Signal Significant Market Top

The CPC and CPCE put/call ratios signal rampant complacency in the stock market and a significant top at hand. Traders are drinking Fed wine each day and mainlining ECB crack cocaine into their veins buying stocks regardless of price partying like its '1999'. Cue the Prince music. Traders see no reason to worry since global central bankers control the markets and they keep printing money sending stocks higher to benefit the wealthy elite class that own large stock portfolios.

The uber low put/calls signal a significant market top at hand at anytime over the coming days. The low CPC on 5/11/15 resulted in the market top about seven days later where the SPX dropped from 2035 to 2072; 63 handles. Last summer the low CPCE resulted in a market top in July and drop in the SPX from 1991 to 1905; 86 handles. Watch your wallet. Ditch the longs and begin scaling into the short side as the days ahead play out. Of course the central bankers can always pump stocks higher at anytime and a resolution to the Greece bailout drama would also create a pump higher in equities but these bounces, should they occur, can be shorted into since the uber low put/calls indicate complacency is off the charts and a market pull back to bring trader's attitudes back to earth is desperately needed. 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.

Keybot the Quant Turns Bullish

Keystone's proprietary trading algo, Keybot the Quant, flips long this morning shortly after the opening bell at SPX 2094. The stronger chip stocks and lower volatility create the upside juice. Bears need either GTX under 3232 or VIX above 14.28 to stop the market upside. Otherwise, stocks should continue floating higher. More information is available on Keybot's site;

Keybot the Quant

TRAN Dow Transports Daily Chart in -10% Correction

The Dow Transports Index dips into -10% correction territory joining the Dow Utilities Index. The all-time high for trannies is 9269 on 11/25/14 and all-time closing high at 9217 on 12/29/14 so a -10% correction is the 8342 and 8295 levels respectively. Both are violated in yesterday's trading although TRAN recovered slightly to end the session at 8307.

For this year the TRAN high is 9244 on 2/25/15 and closing high 9178 on 2/24/15 which yields -10% correction numbers at 8320 and 8260, respectively. The LOD yesterday, 6/9/15, is 8256 under all the -10% levels highlighted sending trannies into correction mode joining the utilities.

From a Dow Theory perspective, the Transports never confirmed the upside rally in stocks with the Industrials. The Dow Industrials printed new all-time highs this year but the Transports have not. 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.

NYA NYSE Composite Weekly Chart 40-Week MA Cross and NYSI NYSE Summation Index Weekly Chart

One of Keystone's important cyclical market indicators is the 40-week MA cross on the NYA. The market bears created a failure this morning under the 10888 threshold but the bulls fight back and prevent the negative cross from occurring--for now. Thus, the stock market remains in a cyclical bull market pattern with the NYA price above the 40-week MA but the action requires close monitoring moving forward. Failures have occurred since the October selloff but the central bankers, that control the stock market, come in with loads of liquidity to pump stocks higher and prevent the negative crosses from sticking.

The NYSI summation index dips under zero and in the past this identifies where stocks stage a recovery rally. The only question is will the bounce occur immediately or will stocks fall down the rabbit hole first and then recover. When the NYSI recovers and moves higher that will be the tell so monitor it closely in the days ahead.

Keep an eye on these market metrics. Equities are in major trouble if the NYA lsoes the 10888 level. Bulls are fine if they maintain the NYA above the 40-week MA. Watch for where the NYSI bottoms to provide insight into where the market bottom occurs. As this  message is typed, the NYA recovers to 10928 now 40 points above the danger line. 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.

MU Micron Technology Weekly Chart H&S Gaps

A reader wants a look at Micron where option activity is picking up. MU was a phenomenal winner from 6 to 36 a six times increase, +500%. MU topped late last year due to the negative divergence (red lines), overbot conditions and red rising wedge pattern. The purple bars and lines show a head and shoulders (H&S) pattern with head at 36.80 and neck line at 28.80. The H&S targets 20.80 (28.80-8.00), call it 21-ish which is strong price support from late 2013 and early 2014. The neck line at 29-ish failed and price meanders lower after back kissing the neck line failure. Price is now at the gap fill from April 2014.

If MU collapses from here to 23.5 and heads lower that would create an island reversal pattern which is on the table. There are other gaps on the way up (blue circles) that serve as future downside targets. Over the last few months since March, the lower price results in positive divergence with the histogram, stochastics and money flow so a bounce in the weekly time frame is near. The RSI and MACD line remains flat to weak and bleak, however, hinting that after a quick bounce, say for a week or two, price will likely come back down again to explore the 21-25 area. At that time a more substantive recovery rally may develop.

The fly in the ointment for the big picture is the weak and bleak monthly chart so after MU recovers say during the summer time, lower prices would be expected with price achieving the H&S lower target at 21 as the year plays out. 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.