All four major indexes print new all-time record highs today, 11/25/16. The Nazzy was the hold-out earlier today stubbornly refusing to overtake the all-time high at 5392.26 from Tuesday, 11/22/16. The 1-minute chart above is interesting from the standpoint of illustrating support and resistance price behavior. As the day after Thanksgiving seasonal joy guarantees an upside day in stocks today, the COMPQ finally rises up towards the prior record high at 5392.26 (green line) to test the resistance.
Price came up and tapped on the 5392 resistance at 11:30 AM EST and was spanked down. Then price picked itself up by its bootstraps and tried to bust up through again at 11:36 AM, but failed again. Price came up for a third try, and many traders do not believe in triple tops, and a triple top does not occur, instead, price overtakes the 5392 resistance and trumpets sound for the new all-time record highs as price moves higher at 11:42 AM.
Price then typically back kisses, or back tests, the resistance it has taken out which now becomes support at 5392, and price drops to kiss the support at 11:49 AM, and bounces, so the back test is successful for the bulls. Since the 5392 support held, price moves higher. The COMPQ then comes down for another test of the 5392 support from 12:11 PM through 12:20 PM, and bounces again. A second back test of support has held (most of the time the first back test will send price higher and a second back test would not occur). Price then launches higher into the closing bell. The Nasdaq Composite all-time intraday and closing record highs are 5398.92 (the COMPQ closes at its high). 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 McClellan Oscillator is printing highs at 60-ish over the last couple days. The green circles highlight the low NYMO's when a stock market bottom occurs and the red circles highlight the high NYMO numbers resulting in a stock market top. What do you think will happen?
The sentiment indicators show the stock market boat is loaded on the euphoric bullish side after the Trump election win two weeks ago. The VIX has a 12-handle indicating lack of fear in the market. The CPCE is printing uber low numbers over the last week indicating rampant complacency in markets. Other sentiment indicators indicate high levels of bullishness and very lows levels of bearishness (very few expect the stock market to sell off).
The NYMO is elevated also indicating that an inflection point in the stock market is likely. The expectation is for stocks to sell off going forward to take a rest from the Trump upside orgy. The Keybot the Quant algorithm is bullish and tracking VIX 13.85 and GTX 2249.
When the stock market selling begins, watch volatility and commodities. As stocks drift lower, if VIX moves above 13.85 and GTX under 2249, the bears will have downside momentum for the stock market. If only one parameter turns bearish, the downside move will be muted. If one of the two parameters turn bearish but then jumps back into the bull camp, stocks will quickly recover from the short term pull back. If VIX moves above 13.85 and stays above, and GTX under 2249 and stays under, stocks will be in trouble and the Trump Rally will vaporize.
Today is an uber upside day seasonality-wise for the stock market with the day after Thanksgiving up most of the time, however, the rally has been ongoing for nearly three weeks and stocks need a rest. Tuesday is a new moon and stocks are usually weak moving through the new moon. A Bradley turn date is Tuesday so stocks are in a window now for a trend change (which would be stocks moving lower ahead), or, a sharp upside acceleration; the Bradley does not predict which will occur only indicating that an inflection point is at hand. Judging from the charts, the bearish outcome with stocks moving lower in the near-term would be favored. 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 Friday Evening, 11/25/16: The Trump Rally is unstoppable. Stocks continue floating higher printing new all-time record highs. The SPX all-time closing and intraday record high is 2213.35 from today (price closed at the high). NYMO at 60-ish. CPCE is uber low at 0.50-0.61 over the last week. CPC drops to 0.80. Commodities, GTX, fall below 2249 to 2234 (the 2249 level is identified by Keybot the Quant) which is a feather in the bear's cap despite the up day in stocks. VIX 12.34. The above analysis remains in play. The stock market top may have printed today. If not, the top is likely on Monday or Tuesday. The question will be if stocks drop strongly, or, if they only print a minor pull back from the Trump Rally; we will know next week.
Fed Funds futures predict a 100% chance for a rate hike on 12/14/16 so the short end yields creep higher. The 2-year yield is at 1.08% matching highs from late 2015 and yields going back to early 2010. Yields continue moving steadily higher for five years through the upward-sloping channel. Traders are convinced that Trump's policies will will bring inflation. 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 on Friday, 11/25/16, at 7:49 AM EST: The 2-year yield is up to 1.15%. The blue line is a resistance area at 1.11% to 1.21% so yield is playing in this sandbox right now. The thin line resistance line matching levels from 2009 is at 1.34% to 1.44%. Thus, the bond bears (expecting lower note and bond prices, higher yields and inflation) need to punch up through 1.22% and yield will seek the 1.34%-1.44% target. Treasury bulls, that expect higher note and bond prices, lower yields and disinflation and deflation to continue, need to hold the line at 1.21% which will place a near-term ceiling in the bond rout. Global bonds are at record 'oversold' levels (lower prices higher yields) so a rest and reversal of the move is likely in the near-term.
The Trump Rally momentum is unstoppable. The RUT prints a new all-time closing high at 1334.34 and new all-time high at 1334.83. The SPX, INDU and COMPQ also print all-time record highs. The orange-headed president-elect creates a massive rally in small caps the RUT is up for 13 unprecedented consecutive days a record unmatched since 1996. The green upward-sloping channel shows price at the top rail. The RUT has also violated the upper standard deviation band so the middle band at 1239 and rising is on the table.
If a top occurs now at this level, the Fibonacci retracements are shown for the rally. The 38% Fib is at 1267. The lower channel rails are in the 1250-1270 area. The 20 and 50-day MA's are at 1235-1239. A lower landing zone in the 1250-1280 area is in play. The 1299-1303 area is firm support.
The red bars in the right margin for stochastics and the histogram display neggie d (bearish). The stochs are also overbot (bearish). The RSI and MACD line, however, are long and strong (bullish). So price needs to pull back and take a rest to satisfy the histo and stochs but then will likely want to rally again to a matching and higher high in this daily time frame.
The blue box shows that the move higher is a strong trend with the ADX at 37. Thus, the trend should continue. A pull back is needed in the daily time frame it will be interesting to see if it is sharp and significant, or subtle and small. Stocks are usually buoyant into a holiday but the rally is in its 13th day very rare market behavior. 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 oil and US dollar charts display their expected inverse correlation over the last couple years. As is typically expected, as the dollar rises, oil, and commodities such as gold, drop. The blue lines show the dollar rising and correspondingly, oil drops. The pink lines show the dollar index retreating lower so oil and commodities rise. This correlation continues happily along until September when the relationship becomes shaky.
The USD leads oil so there may be a couple-week delay in the response. The dollar was dropping 3 and 4 weeks ago but oil dropped as well. Donald Trump wins the US presidential election on 11/8/16. Markets go crazy with traders believing that Trump's policies will boost inflation. Treasury yields rocket higher as notes and bonds are sold off. The US dollar rises with the yields.
At the same time, traders are tripping over each other to buy commodities believing that a new stimulus plan from the US will boost construction and infrastructure activity. Copper, zinc and other metals launch higher including oil. The ongoing OPEC drama about proposed production cuts also influences oil prices.
After the US election, the dollar launches from 96 to above 101. Oil initially drops, as would be expected, with the higher dollar, but last week oil rises with the rising dollar. The brown circle shows the inverse correlation falling apart since September.
The expectation would be for the oil and dollar inverse relationship to resume. Thus, oil should retreat lower with the buoyant dollar, or, if the dollar retreats back inside the safety of the long-term sideways channel, oil should remain buoyant. Considering the potential breakout higher in the dollar shown on the chart, WTIC would be expected to be under 40 right now; it's not.
Trump's infrastructure and other proposed programs, and the ongoing OPEC oil production cut drama, conspire to keep oil prices buoyant despite the rising dollar. Thus, the USD, Trump's path forward and the OPEC decision on a production freeze are The Three Stooges currently impacting the oil prices. 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.
Large-cap tech stocks did not initially participate in the Trump Rally but came on strong last week. The dark blue expansion pattern is in play, also called a megaphone pattern since it expands outward. Keystone added the megaphone handle and mouthpiece to create the effect. The dark blue expansion pattern shows more upside available until the top rail is hit. A more gentle-sloping fit of the data points is the lighter blue line and price is at the top rail of this pattern.
The indicators are in the same shape as the SPX daily chart; negatively diverged over the four-month time frame and in the shorter couple-day time frame except for the MACD line and money flow that are long and strong and have short term momo. Thus, a day or two of down action followed by a day or two of up action, perhaps heading into the Thanksgiving holiday on Thursday, may be on tap.
A massive upside breakout that the consensus is looking for may not materialize. Price may instead want to top out this week and take a rest as soon as the MACD line and money flow roll over. Interestingly, despite all the bullish euphoria, the megaphone chart above projects the COMPQ in the 4950-5050 area say in late December and January (with price peaking at the top rails over the coming two weeks). The chart can be reviewed in a couple weeks to note the progress 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 SPX meanders along with the non-stop support of global central bankers. The Trump election win creates more stock market upside with the RUT (Russell 2000 small caps), INDU and DJI (Dow Jones Industrials) and COMPQ (Nasdaq Composite) printing new all-time record highs and the S&P 500 is only a whisker away. The all-time record high for SPX is 2193.81 and all-time closing high is 2190.15 from 8/15/16 (green circle). The SPX begins the new week at 2182. The SPX HOD on Friday is 2189.89 only 26 pennies from a potential new record closing high but the bulls could not find that quarter under the Fed's couch cushions.
Keystone highlighted the 2-hour chart last week explaining the price development and looking for the top. Price receives the start of a spankdown from the rising wedge, overbot conditions and neggie d that was highlighted. The 1-hour chart had the same set-up as shown above. Price violated the upper band and moved back to the middle band. The lower band at 2173 remains in play. The indicators are weak and bleak hinting at lower lows desired in the one-hour time frame sans the RSI. The RSI is flat as price prints matching lows so this may create an hour's worth of buoyancy before price slumps again. The stochastics slip sub 50 to 48, in bear territory. Watch to see if the RSI prints sub 50, or not.
The 200 EMA is at 2150 and is a key short-term trading indicator. The bulls rule above the 2150. When the bullish cross occurred on 11/8/16, as people voted that day for the next POTUS, you knew that a rally was at hand. The SPX back kissed the 200 EMA on 11/9/16 and never looked back sailing higher. On that bounce, you knew up was the direction ahead for stocks. Market bears have no true power until they move price under the 200 EMA which will be in the 2150-2154 area this week.
The bears should have some more downside energy available in the one-hour and two-hour time frames which hints at a soggy Monday and perhaps soggy Tuesday. As always, if the central bankers or others profess happy news, stocks will instead bounce. 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 SPX meanders along with the non-stop support of global central bankers. The Trump election win creates more stock market upside with the RUT (Russell 2000 small caps), INDU and DJI (Dow Jones Industrials) and COMPQ (Nasdaq Composite) printing new all-time record highs and the S&P 500 is only a whisker away. The all-time record high for SPX is 2193.81 and all-time closing high is 2190.15 from 8/15/16 (green circle). The SPX begins the new week at 2182. The SPX HOD on Friday is 2189.89 only 26 pennies from a potential new record closing high but the bulls could not find that quarter under the Fed's couch cushions.
The daily chart displays the two-week stock market rally. Price jumps from 2084 to 2190, +5.1%, in 10 days time. The rally began Monday, 11/7/16, going into the election on 11/8/16 and then took off like a rocket after 11/9/16; the Trump Rally. The put/call ratios were uber high signaling panic and fear so it made sense for the rally to begin on 11/7/16. The CPCE put/call has printed uber low readings so a stock market top should be on tap at anytime. Note the solid downward-sloping red channel in play with price at the top rail when Trump won the election causing the breakout higher and price jumped above the 50-day MA at 2146 never looking back.
The red lines show negative divergence over the four-month time frame and neggie d over the last couple days with the RSI, histogram and stochastics as price makes new highs. The stoch's are overbot wanting to see a pull back in the daily time frame. These indicators are all bearish. The MACD line and money flow remain bull-friendly and long and strong over the last few days wanting to see another high in price after a pull back occurs in this daily time frame.
The direction ahead is a tricky call since if price starts to print above 2190 and 2194, the algo's may click into high gear and run price above 2200 in a heartbeat. The chart suggests that stocks will sell off for a day or two, then rally again for a day or two printing new highs which will be at the new all-time record highs. At this time, as long as the indicator lines do not move higher than the highs shown over the last couple days, the bears are in business and the SPX should roll over to the downside. If, say, the RSI prints a higher high than a couple days ago, SPX 2200+ is on the way.
The thinking is that price will not breakout with a strong upside move and the 2190-2195 area should hold in the days ahead but in these markets anything can happen. The weekly and monthly charts are unenthusiastic for upside. Price tagged the upper standard deviation band in the chart so the middle band, also the 20-day MA, at 2143, and rising, is in play.
The projected day or two down move and then day or two recovery would line up perfectly with seasonality factors since stocks are typically buoyant into the Thanksgiving holiday and the shortened Friday session is typically an up day. Thus, Monday and Tuesday may be soggy for stocks with higher prices coming on Wednesday and Friday. It will be interesting to see if new highs can print in the week ahead. Will the Trump Rally continue? 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 SPX meanders along with the non-stop support of global central bankers. The Trump election win creates more stock market upside with the RUT (Russell 2000 small caps), INDU and DJI (Dow Jones Industrials) and COMPQ (Nasdaq Composite) printing new all-time record highs and the S&P 500 is only a whisker away. The all-time record high for SPX is 2193.81 and all-time closing high is 2190.15 from 8/15/16. The SPX begins the new week at 2182.
The weekly chart is unenthusiastic about the matching record highs in price. The red lines show the negative divergence in play. Volume is high over the last couple weeks. Much of the stock rally was short-covering since everyone and his bro had short positions on going into the election on 11/8/16 and the sentiment was overwhelmingly bearish and negative. Once the rally began, it actually started on Monday, 11/7/16, the shorts were running for their lives buying to cover creating upside rocket fuel.
The upper band was violated in the summer time so price went to the middle band, and then the lower band where the bounce occurred back up to the middle band. Price now teases at new record highs. Use the 20-week MA at 2156 as a gauge to see if the bulls or bears are winning. At 2182, the bulls are clearly winning.
The move higher in price has momentum and momo can take you a bit farther than warranted. Overall, however, on this weekly basis, the expectation would be for sideways prices ahead rather than a big-time breakout. It will be interesting to see if new highs can print in the week 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.
The SPX meanders along with the non-stop support of global central bankers. The Trump election win creates more stock market upside with the RUT (Russell 2000 small caps), INDU and DJI (Dow Jones Industrials) and COMPQ (Nasdaq Composite) printing new all-time record highs and the S&P 500 is only a whisker away. The all-time record high for SPX is 2193.81 and all-time closing high is 2190.15 from 8/15/16. The SPX begins the new week at 2182.
The monthly chart shows the overbot conditions, rising wedge and neggie d (red lines) in early 2015 that Keystone highlighted back then and used to call the multi-month top in the stock market. But the central bankers are powerful, printing money like madmen to enrich themselves and the privileged class that own large stock portfolios, and the stock market recovers to print new highs this year. The purple circles show a couple of Tweezer Bottoms.
Volume continues to trail off over time. The 10 and 12 MA's are extremely important. The 10-month MA is at 2107 and serves as an early warning signal of major trouble ahead. Many algo's program this into models. The 12- month MA is at 2088; Keystone calls this the clilff. Under 2088 and all hope is lost for the stock market. Price came down to test this key level and the 200-day MA 11 days ago, and bounced. The bulls are happy with the SPX nearly 100 handles above the cliff.
The SPX is at matching highs now. Looking at the indicators, they are negatively diverged in the couple-month time frame and over the longer couple-year time frame. Stochastics are overbot. The MACD cross is a sliver negative with the black line under the purple line. The chart is not enthusiastic of more upside. The chart favors a lower path ahead on the monthly basis. 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.
