Look at that! Keystone rubs his bloodshot eyes to see that the CPCE did actually print a 0.47 today. Wow. That is something. It is like the VIX printing the record 8.56 low the day after Thanksgiving. The complacency is now off the page in uncharted territory. Traders are drunk as skunks, drinking Fed wine, ECB champagne and BOJ sake, buying stocks with reckless abandon and total disregard for price.
Everyone is buying stocks no matter what they say otherwise. Young people took their Christmas money and rushed to buy a few shares of Facebook, Apple, Amazon, Alphabet and Netflix today. These enthusiastic buyers will serve as bag holders.
The put/call ratios have been cheated from receiving a significant pull back as they deserve. The drastic collapse in the CPCE to 0.47 indicates there is no fear that stocks can ever sell off again. Even if stocks selloff, the central banks will save the day so there is no need to worry. The rampant complacency has everyone buying stocks at the ask since prices go higher forever. You know this is Fantasyland.
The low put/call in early December only created a small pullback. Then the low reading before Christmas created sogginess but the holiday joy sustained buoyancy in stocks. Now the put/call ratio collapses to 0.47 a multi-year low. What do you think will happen? All the bears have left town. The bulls are celebrating record highs in stocks each day and are care-free that the records will continue forever.
The low put/call gels together with the neggie d showing on the SPX daily chart. Both forecast weakness in the stock market ahead. It would not be surprising to see the SPX to drop from 20 to 80 handles and maybe more. Watch that VIX since bears got nothing unless the VIX moves above 10.23. 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 chart was posted a few charts back.Today it was decision day for the critical 200-day MA at 10.95 and that red candlestick tells the story. The bears were slapped in the face with the VIX collapsing under the 200-day MA and then under the 10 level and all the way down to the LOD at 9.52. The bears were running for their lives as usual. Low volatility sends stocks higher.
The bulls win the game with low volatility. The purple bar is the key 10.23 level identified by Keybot the Quant. Stocks will weaken and sell off above 10.23 and then sell off big above 10.95. Of course if the VIX remains below 10.23, the bulls will be smoking expensive cigars enjoying the big rally in the stock market; they will flick the ashes into the bear's faces.
UTIL fell through its 50-week MA at 720.98 today typically a harbinger of doom for the stock market. At the same time that happened, semiconductors jumped higher and volatility dropped. This is odd market behavior.
For Wednesday, market bulls win big if the VIX stays below 10.23 and UTIL rises above 721. Market bears win if the VIX moves above 10.23. The SPX daily chart is ready for a pull back due to negative divergence. 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 Wednesday Evening, 1/3/18: The bulls come to play this week sending stocks strongly higher Tuesday and today. The VIX plummets to an 8-handle only printing under 9 for the sixth time in history. Traders are completely fearless and complacent. Everyday is a party and no one is worried since they are too busy buying stocks.
The market bulls begin the year with new record highs. The all-time record high for the S&P 500 is 2695.89 only 4 points from 2.7K and the all-time closing high is 2695.81 both records printing today, Tuesday, 1/2/18, the first day of trading for 2018. The bulls are unstoppable. However, the chart says, 'stop'.
There is momentum on the bull side but note the new record highs come as a double-top pattern and all the indicators are in negative divergence. There is no more juice available to take price higher. That sneaky upper band is at 2708 and has to be respected. Price has not touched the 20 MA in about 6 weeks a long time and it needs to get down there to show respect.
Investors are throwing money at the market today. They must have received fat Christmas and Hanukkah holiday cards stuffed full of cash money. What great luck to have an Uncle John and an Uncle Sumner.
The RSI and stochastics are coming off overbot levels. You have to go with the neggie d on this chart so a near-term top is in place now and price should be spanked lower at least to 2667 to start. The lower band at 2626 and rising is also on the table.
If price rallies higher and starts to eye up that upper band, the index will still roll over and receive a spank down as long as the indicators do not move above the thin red lines (the indicators remain negatively diverged).
The bears never received a healthy pull back in stocks due to the uber low put/call ratios so they are still owed something. Perhaps the jobs report on Friday morning will also create drama. The chart wants to see a spankdown in the S&P 500 right now and as long as the indicators do not move above the thin red lines. The 2667 serves as an initial downside target. 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 Wednesday Evening, 1/3/18: The bulls use the momentum to punch higher to that upper band that was sneaky and had to be respected, at 2708, and the band expanded higher to 2714 on the current chart. The SPX HOD is 2714.37 the highest number in history. The S&P 500 also prints a new all-time closing high at 2713.06. The VIX plummets to an 8-handle. The SPX tags the upper band at 2714 so the middle band at 2670 and rising is on the table. The same technical analysis remains in place for now. Perhaps the Friday morning jobs report will be a catalyst or the Bradley turn date tomorrow.
It's been a while since this chart was posted. The Keystone Speculator Eclipse Indicator is an obscure indicator like the Bradley turns but it is interesting and fun to track. The first step is identifying when the eclipses occur during the year. Take the average between the dates. then go one month before and month month after that date as key pivot point dates. The stock market can print a top +/- 2 weeks from these dates. Is that clear as mud? What'd he say?
The eclipse dates in 2017 and 2018 are;
2/11/17
2/26/17
8/8/17
8/21/17
1/31/18
2/15/18
7/13/18
7/27/18
1/21/19
Thus, the middle of 1/31 and 2/15 is 2/7 so one month before is 1/7/18 and one month after is 3/7/18. So a stock market top may occur +/- 2 weeks at 1/7/18 or 3/7/18. The stock market is in the eclipse window now for a potential market top.
In the summer, the stock market may top +/- 2 weeks at 6/27/17 or 8/27/18. It will be left to you to decide if last year's calls identified tops. The eclipse indicator nailed the top in March and in the summer the late July early August top was identified. The whole entire eclipse box is subject to a market top but the circles on each end are hotter areas where the top may occur.
If nothing of note occurs during the first part of the ellipse box area it becomes a slight bit more likely that the second area will be a top. If the first area results in a solid pull back in stocks the second area will likely not apply. Well, do you think this window in early January , say the first three weeks of January has potential for a top? If not perhaps, that late February early March area a top will occur. It is something interesting to watch.
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 white circles are the Bradley turn dates that occurred in 2017. A link is provided below for more information on this obscure indicator. The expectation is that a trend change will typically occur around the Bradley turn date typically +/- 3 days although it may be +/- 7 days which is a wide window. If price is trending it up it may reverse lower. If it is moving lower it may turn around to the upside. Sometimes an acceleration will occur in the current trend so a trend lower in price will result in a big drop lower, or a bull rally will hit the afterburners and rocket higher.
Here are the major Bradley dates;
4/7/17
4/29/17
6/21/17
8/9/17
9/7/17
12/3/17
1/4/18
1/17/18
6/1/18
Note the back-to-back turn dates to begin this year. The month of January may be a wild ride.
Bradley's do not predict direction, only that a trend change may occur for the stock market as explained. You can judge for yourself by the white circles if you think the Bradley's have meaning. There are a few key inflection points the Bradley's identified last year.
As the circle in the right margin shows, the next Bradley turn date is Thursday, 1/4/18, this week. The stock market is in the Bradley window now. Stocks have been choppy sideways lately. Keep your eyes open for a stock market inflection point in the days 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.
Bradley Siderograph
It is not looking good for the Deutschland. The red lines show universal negative divergence creating the spankdown off the top over the last few weeks and that would be expected to continue. The MACD line tries to muster up some strength but at most it may delay the top for a month or so.
The red rising wedge pattern is ominous, especially if it falls below the lower trend line. The collapses from rising wedges can be quite dramatic. Price is extended above the moving averages requiring a mean reversion lower. The upper band was violated so the middle band at 11670 is on the table.
The downside trend was strong into 2009 but that petered out as the ADX purple box shows. As the DAX rallied into 2014, the ADX showed that the upside trend was strong and sustainable, but alas, the strong trend higher ended in late 2015. The ADX is down at 21 showing that the trend higher in German stocks is not strong anymore. German bulls will need the ADX to move into that purple box before they are happy.
The chart is sick, one of the most ill ones among the world's major indexes. The multi-month top is in for Germany and these prices may not be seen for months and years ahead. The November top may hold if not, price will probably not make it much higher in January or February and that will be the multi-month top.
Taking a look at EWG, the German ETF, the chart is similar to the DAX but clearly shows more momentum since many traders expect Europe's powerhouse to continue outperforming. The DAX chart above is sick looking and indicates that Germany will have a very ill year 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.
Chinese stocks rally strong overnight as the PBOC gooses the economy with a temporary triple R cut (reserve requirement ratio). This allows the banks to lend more to help spur the economy. China also extends property tax deadlines. The mainland's Shanghai Index, SSEC, and Hong Kong's Hang Seng Index, HSI, catapult higher.
The HSI is at one-decade highs teasing the levels from October 2007 when global stock markets were topping out. The US stock market peaked in early October 2007 and the Hang Seng peaked three weeks after. Of course the 2008-2009 financial crisis quickly followed. The banks fell apart in early 2008.
The HSI is a great gauge for Asia this year. The all-time record high is 31958.41 and all-time closing high is 31638.22 both from 10/30/07. Watch for HSI 31960.
If the HSI moves above 31960, the stocks in the Pacific theater will rock 'n roll higher this year with bullish cheers of euphoric joy. If the HSI does not overtake the record highs, Asia stocks will take on an illness and become sicker 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.
The monthly candlestick for FB is a doji which typically signals a trend change. The red lines show negative divergence in play across the board. RSI and stochastics are overbot and the red rising wedge is in play. All these parameters conspire to create the pull back in December.
However, the MACD line likely wants one more high. When the high in price was printed in November, all indicators are neggie d except the MACD; it was still sneaking higher, that bugger. This hints that after a spank down occurs in this monthly time frame, price should come back up one more time so the MACD line can then negatively diverge and the top will be in. Thus, Facebook is likely printing a major top now through March and that top may hold for months and years ahead.
Price is extended above the moving averages requiring a mean reversion. FB tagged the upper standard deviation band so the middle band at 144 and rising is on the table.
The ADX was way above 50 in 2015 verifying that the upside trend was one of the strongest in market history, however, with higher highs in price, the ADX is down at 42, trying to recover, but below the highs two years ago. The strong trend higher in price is fading over the last couple years.
The blue circles show distribution taking place the smart money is passing off shares to the dumb money. Joe Retail takes a swig of beer and gets caught up in the Facebook and FAANG-stock hype. He is buying Facebook shares from the institutions that are dumping shares.
Note that price moves higher one month and then the following month the retail bag holders start buying. The larger sell volume candle in the month after the buy volume candle shows distribution; how the smart money is setting up Ma and Pa Kettle, Cousin Frank, Aunt Mary, Timmy Tech and of course Joe Sixpack as the bag-holding sucka's.
Facebook will likely place a multi-month and multi-year top between now and March. If you enjoyed lots of profits in FB, it is likely wise to take the money and run. If you are hesitant to give up on the big winner, scale out by thirds say; sell one-third January, another third February, and the last third in March. FB may seek 106-150 this year. Keystone does not have a position in FB but if price comes back up again as described above, perhaps February, and the MACD line is rolling over with neggie d, Keystone will short it. 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 monthly charts receive new data points last Friday and will begin a new January candlestick tomorrow morning. Keystone has been posting the SPX monthly all year long waiting for the proper alignment to call the top in the stock market but sometimes it is like herding kittens. If you recall, the chart was set up for a pull back and potential major top but the MACD line continued higher. That needed to negatively diverge before the top could be called.
At the same time, the ECB and BOJ flap their dovish wings sending stocks higher and the tax bill in the US added rocket fuel to the stock market. The RSI leaps higher into the stratosphere, the MACD line breaks out higher and the money flow is also now long and strong. The bulls are unstoppable.
The stochastics remain cooked, negatively diverged and overbot (bearish). The RSI is overbot (bearish) but the indicator is long and strong (bullish). Price is extended above the moving averages needing a mean reversion lower (bearish). Price has violated the upper standard deviation band (pink) so a move back to the middle band at 2343 is on the table going forward (bearish).
That red rising wedge was wicked bearish in 2009-2015 and the SPX collapsed from May 2015. Stocks were trending lower and cooked headed for sustainable downside but that is when the Federal Reserve stepped in February 2016 to save the day. The central bankers are the market. The red circle shows the Tweezer Bottom that formed at the time. The central banker juice sent stocks higher and signaled the all-clear for equities again. Price, however, is now in another rising wedge pattern (bearish).
The RSI, MACD line and money flow must turn over with neggie d before the top can be in. Therefore, perhaps down January and back up to the record highs in February, at that time the RSI and money flow will likely be neggie d but the MACD line is questionable. If it is negatively diverged, that is multi-month and likely multi-year top for stocks. If not, the MACD line should go neggie d with another down up move which places the time frame into April.
Thus, wetting the index finger and holding it in the air pointed skyward, says the major market top is likely to print between February-May unless a drastic event occurs where the mrket would roll over sooner rather than later. The 2340-2400 landing zone is a reasonable expectation this year.
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 popped above the 200-day MA at 10.96 during the last minute of the last day of trading for 2017 on Friday. Market bears win above VIX 10.96 while bulls will rule the stock market if VIX is under 10.96. The double circle is the 8.56 record low that printed the day after Thanksgiving.
The complacency, fearlessness and total relaxation about the stock market is reflected in the VIX 8-handle. There is no reason to worry about any significant selloff in stocks since the central bankers will always step in and support markets. Thus, global investors continue sipping Fed wine, ECB champagne and BOJ sake while buying stocks without a care in the world.
The full moon peaks for the month at 9:42 PM EST tonight and stocks are typically buoyant moving through the full moon each month. The Santa Claus rally runs from Christmas Eve to two days into the new year. The SPX was at 2683 on Christmas Eve so the bulls need to push price back above 2683 by end of day Wednesday, otherwise, it is an ominous signal for the stock market this year.
Traders are also watching how the first week of January trades since, as the first week of January goes, so goes January and so goes the year. So there are seasonality factors at play to begin the year. New money also comes into markets when a month begins especially a quarter and especially when the year begins.
So VIX 10.96 will tell you the market direction story first thing tomorrow (Tuesday) morning. Watch it closely. The brown bar is the 10.43 level called out by Keybot the Quant algo that is currently on the short side. Bears can still have hope below 10.96 but if the VIX drops below 10.43 the bulls rule and the bears are toast.
Thus, if VIX moves higher the stock market will crumble lower. If VIX drops under 10.96, the bulls will begin rallying the stock market higher. If VIX drops below 10.43, the bears have no hope and the bulls will be ramrodding the stock market far higher. 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 Minutes Before Tuesday's Opening Bell: VIX drops to 10.69 so the bulls are slapping the bears around. S&P +12.
