Keybot the Quant Turns Bearish

Keystone's proprietary trading model, Keybot the Quant, flips short yesterday at SPX 3229. More information is found at Keybot's site;

Keybot the Quant

SPX S&P 500 Weekly Chart; SPX Prints All-Time Record High at 3352; Overbot; Rising Wedge; Negative Divergence; Price Extended

The SPX prints a new all-time high at 3352.26 and new all-time closing high at 3352.09 on Monday, 2/10/20. The band is playing late into the evening with traders and investors drunk as skunks singing songs and carryin' on. Irving Fisher's casket was exhumed today. The gravedigger's opened the lid, Irving sat up, pointed his bony index finger to the sky and exclaimed, "I think the stock market is at a permanently high plateau and we never have to worry about stocks going lower ever again."

The SPX weekly chart prints the record high with universal negative divergence across all indicators (red lines). A spankdown is on tap on the weekly basis. Note, however, that the MACD line is pointing ever so slightly higher in the near-term. Watch that closely. Since the week just started, that candlestick is in progress and so are the end points of the chart indicators. If stocks begin selling off, which is expected, that MACD can come down a touch and display neggie d against the price high which would signal that the selloff will be longer and more substantive. The red rising wedge is ominous. Remember, the collapses from rising wedges can be quite dramatic; price typically jumps off a cliff from this pattern.

The smackdown off the top should last for several weeks. It can start right away, which would be in sync with the daily and hourly charts, or the bulls may play around a bit more and try to keep stocks elevated for a few more hours or day or two especially expecting Federal Reserve Chairman Powell to speak dovishly before Congress this week. The central bankers are the market.

The expectation is for the stock market to begin selling off now. If there is negative news overnight or some type of negative catalyst, stocks and futures will likely be flushed down the toilet quickly since it would kick the neggie d into high gear. Barring any happy talk from the Federal Reserve, other global central bankers, or President Trump and his henchmen, stocks are set to start tumbling lower. Watch that MACD line closely. 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 Sunday, 3/15/20: The SPX crashes from the all-time record high at 3393.52 on 2/19/20, to a low at 2478.86 on 3/12/20, last Thursday; a dramatic bloodbath of 915 points off the top, -27%, into a bear market in only 16 trading days!!! That is a record that President Trump does not appear to be touting. The 18-year secular bear cycle is growling; it should have ran from 2000 to 2018, finishing up a couple years ago, but is right-translated into this year (sharp upside cyclical rallies such as 2003-2008 and 2009 to present are very common within secular bear patterns). The secular bull cycle will begin at some point over the next year or two (it should have started in 2018 running to 2036 but is likely delayed because of the decade of obscene Keynesian intervention by the Federal Reserve) sending stocks to epic highs in the years ahead but it will likely be under a devastating hyperinflation scenario (your purchasing power will be in the toilet even though stocks and houses will be highly priced). First, remaining in the here and now, we will likely deal with some more deflationary fun ahead. Most analysts and strategists still don't get it. The world has a demand problem going forward which will be difficult to stimulate. A deflationary spiral may kick in once consumers realize that if they keep waiting to buy something, it will be a little bit cheaper next week. The Fed fears deflation more than inflation and Chairman Powell is unable to sleep the last couple months worrying about a potential deflationary spiral; simply look at Japan stuck in a disinflationary and deflationary quagmire for over two decades!. As Keystone always refrains, "the collapses from rising wedges can be quite dramatic." It was.

SPX S&P 500 Daily Chart; S&P 500 Prints Record High at 3352; Overbot; Negative Divergence; Price Extended

The SPX prints a new all-time high at 3352.26 and new all-time closing high at 3352.09 on Monday, 2/10/20. Summon the dancing girls! The SPX daily chart prints the record high with universal negative divergence across all indicators (red lines). A spankdown is on tap on the daily basis.

However, the bulls created momentum in the last hour of trading so tomorrow morning will tell if they can squeeze out another day of bullish joy before the smackdown occurs.

The expectation is for the stock market to begin selling off now. If there is negative news overnight or some type of negative catalyst, stocks and futures will likely be flushed down the toilet quickly since it would kick the neggie d into high gear.

President Trump is yelling at Larry Kudlow telling him to come up with a positive news story for tomorrow morning so they can keep the stock market party going. Barring any happy talk, stocks are set to start tumbling 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.

SPX S&P 500 2-Hour Chart; S&P 500 Prints All-Time High at 3352; Overbot; Rising Wedge; Negative Divergence; Price Extended

The SPX prints a new all-time high at 3352.26 and new all-time closing high at 3352.09 on Monday, 2/10/20. Sound the Seven Trumpets! The SPX 2-hour chart had a bit more upside energy due to the long and strong MACD line described on Friday. You can see now that with the higher high in price, the MACD is now neggie d. The indicators are in universal negative divergence so the top is in. However, the bulls created momentum in the last hour of trading so tomorrow morning will tell if they can squeeze out a few more hours of elevated stocks before the SPX receives the spankdown.

The expectation is for the stock market to begin selling off now. You will have to watch to see if the bulls can squeeze out a higher high with the RSI, or money flow, but even if they do, that would only extend the top by a few hours. If there is negative news overnight or some type of negative catalyst, stocks and futures will likely be flushed down the toilet quickly since it would kick the neggie d into high gear.

The president and the Fed are no doubt up all night trying to come up with a happy news story for tomorrow morning that can keep stocks buoyant. Do you want to bet that Larry Kudlow shows up on the Whitehouse lawn tomorrow morning touting a tax cut plan for the middle class? Barring any happy talk, stocks are set to start tumbling 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.

VIX Volatility Daily Chart; Bull-Bear Battle at the 200-Day MA; SPX Prints New All-Time High Above 3352

The VIX is battling at the 200-day MA at 15.14 which is a key demarcation line between a short-term bull market versus a short-term bear. The bears are currently winning the game with the VIX at 15.26 which is a dozen pennies above the line in the sand. This is for all the marbles today. Bulls will be emboldened and walk around with their chests puffed out if they can push the VIX below 15.14. Each minute the VIX remains above 15.14, is another nail in the bull coffin.

The thick red line is at 13.76. Keybot the Quant remains long and identifies VIX 13.76 as the key bull-bear line in the sand. Thus, bears win big above VIX 15.14. Bulls battle back but the stock market chops sideways if the VIX is between 13.76 and 15.14. Bulls win big if the VIX drops below 13.76 since stocks will be on their ways to new record highs. 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 11:48 AM EST: The SPX is up 14 points, +0.4%, to 3342. VIX 15.20. The SPX is floating higher today. Remember the 2-hour chart from Friday the MACD was still long and strong. A matching price high is 3346. Bears should simply push the SPX higher 4 more points to tag the matching high which will lock in the neggie d and create the top. The 2-hour chart starts a new candlestick at noon only a few minutes away. She should be topping out right now. This afternoon may be a wild ride lower for stocks. VIX is 15.27 so the bulls cannot push the VIX below 15.14 as yet. The elevated volatility is problematic if you are long the market. Bears dance with glee every minute that the VIX is above 15.14. The SPX may roll over at anytime and collapse under its own weight. Blow on the stock market; that may be enough to knock it over.

Note Added 12:11 PM EST: SPX 3338. VIX 15.33.

Note Added 1:25 PM EST: SPX 3338. VIX 15.42. It's a Mexican standoff. Neither side wants to budge but one of them will flinch. Either the stock market rolls over and dies with the VIX spiking above 16 and higher, or, the bulls are going to drive the VIX below 15.14 to win the game ahead. The next candlestick on the SPX 2-hour chart begins in one-half hour at 2 PM EST. The fifth 65-minute trading segment of the day begins at 1:50 PM EST and the last segment begins at 2:55 PM EST so look for potential pivot points around these times depending on what the robots plan on doing. The PBOC pump overnight supports the stock market.

Note Added 2:13 PM EST: The stock market is a deer in the headlights, frozen at SPX 3337 and VIX 15.45 and too stiff to move either way. The bears could have locked in the top with neggie d if the SPX would have printed 3346 either Friday or today but the bears keep goofing off and playing around. Stocks may simply give up the ghost from here and fall under their own weight since the SPX price was elevated and in the neighborhood of the 3346 with a HOD above 3342. Both sides are sleeping and sluggish on this Monday. The bulls need the VIX below 15.14 to prove they are the real deal but volatility slowly floats higher all day long. The plot thickens. There you go, we are exactly where we were an hour ago. SPX 3338. VIX 15.42. Nowhere, man.

Note Added 2:26 PM EST: Next Monday is the Washington's Birthday/Presidents Day holiday so US markets will be closed. The stock market is typically bullish the two days in front of a three-day holiday weekend so Thursday and Friday may favor the bulls. Therefore, the bears better start the selling fast to do damage on Tuesday and Wednesday, and perhaps straight through the holiday, otherwise, the bulls are going to try and keep the turd floating in the toilet bowl for a couple days because the holiday joy may do some of the lifting as well in the back half of the week. The SPX price still may come up to tag that 3346 price today to lock in the neggie d and officially identify the top, or, the SPX may simply clutch its chest, gasp and keel over. If the bears were smart they would jam it to 3346 for the start of the sixth trading segment at 2:55 PM EST. That would lock in the neggie d and the trading robots would send the stock market into Hades during the last hour. So far, however, today is an easy going, laissez-faire, slow, uneventful day. Bulls yawn while buying stocks.

Note Added 3:31 PM EST: SPX 3347. VIX 15.30. The SPX finally comes up to 3346 and the bears quit goofing around. The bears now have to hold the line at this SPX 3347 and not allow price to move higher. The negative divergence is official on the 2-hour chart, the daily chart and the weekly chart. The pullback may be epic. Enjoy these elevated values since this should be it. The bears have it on a silver platter if they want it; simply push the SPX off the cliff, it is wobbly standing right next to the edge leaning over. Note how the VIX came down to test the critical 200-day at 15.14, and bounced the VIX now at 15.30. The bears are happy, however, they need to turn the SPX over right now in the last half hour. If not, the stock market would likely drop tomorrow; maybe a Black Tuesday? That would be fun. The stock market top is in now. The only thing that can save the day is some kind of uber happy news.

Note Added 3:40 PM EST: SPX 3346. VIX 15.31. It would be wise to make sure you have your shorts on, especially if you walk out in public.

Note Added 3:44 PM EST: SPX 3347. VIX 15.26. Here come the bulls. They are jamming volatility lower to try and create a happy tape. The bulls are gunning for that VIX 15.14 to prove they are in the game still yet. Now we see how many sell orders are coming in late day.

Note Added 3:50 PM EST:  Wheee. Whoopie. Spurt. Spurt. The bulls push the SPX to 3348 while jamming the VIX down to 15.24. Fed Chair Powell is personally standing on the VIX's neck with his jack boot. The bulls need a few more pennies lower in the VIX to try and salvage the day. The negative divergence on the charts tells you that something wicked this way comes; a neggie d smackdown.

Note Added 3:54 PM EST:  Wheee. Whoopie. Spurt. Spurt. The bulls push the SPX back up to 3348 jamming the VIX down to 15.24. The bulls cannot get the VIX under 15.14 as yet but they are pushing hard, with rich Uncle Fed's help. Here you go. VIX 15.20.... they are jamming into the closing bell..... 15.19 ......

Note Added 3:57 PM EST: This is hilarious. VIX 15.17. VIX 200-day MA 15.14. The bulls are fighting to push that VIX below 15.14; they are not giving up.

Note Added 3:59 PM EST: SPX 3352. VIX 15.14. It will take a little while for the numbers to settle out.

Note Added 6:50 PM EST: The SPX finishes up 24 points, +0.7%, to a new all-time closing high at 3352.09 and new all-time high at 3352.26. The VIX settles at 15.04 the bulls win the day in the last minute, as usual. The VIX battle will continue tomorrow and it begins trading at 3 AM EST. The SPX 2-hour, daily and weekly charts are all in negative divergence marking a top in the stock market right now. If there is any happy news, that may be able to squeeze out a few more hours or so of elevated equities but any negative news will be a catalyst to kick in serious downside. The expectation is for a selloff to begin so Tuesday should be an interesting day. Fed Chairman Powell speaks before Congress this week so traders expect more dovishness which supports the stock market. The central bankers are the market as evidenced by the PBOC and Fed today. The coronavirus death toll is over 1,000. Traders and investors are sanguine about the virus. China is telling its farmers to wear masks when working in the field; that's not good. It means the virus can infect through the air, an airborne disease is Apocalyptic. Oh well, no need to worry especially with everyone so busy buying stocks at the ask.

WTIC West Texas Crude Oil Monthly Chart Sideways Symmetrical Triangles

WTIC, West Texas Intermediate Crude oil, is slip-sliding away due to weaker global demand and the coronavirus. China is freezing much of its economy in place to stop the spread of the virus so they 'don't need no steenkin' oil'. The red candlestick shows price losing the lower rail of the yellow sideways symmetrical triangle. The triangle has steep sides and the first price touch inside the pattern shows a vertical side of about 25 handles.

It is a big deal which way oil resolves out of the triangle. A failure here, from 49-50, price is currently at 50.08, leads to a dire outcome that would target 25. That is a deflationary number with the globe in recession. Oil would have to hold that orange support line at 41-42, if not, 25 would become an extremely real possibility.

On the oil bull side, if price can find 10 bucks and break out higher from 60, oil will target 85. This is a monthly chart and the moving averages are lining out sideways which indicates a very strong sideways trend ongoing in oil.

Sometimes sideways symmetrical triangles will morph into longer skinnier sideways triangles like the light blue lines. Watch price in this 49-50 area to see if it can bounce. If oil loses 48-49, the 44 is on tap next than 41-42 then look out below. Oil price may bounce in here and then move higher pursuing that new light blue triangle pattern going forward; a price move sideways through 50-60.

Keystone is not playing oil. A failure of 47-48 would be a short with oil likely losing another 3 or 4 bucks. If price bounces and moves above 52-53, oil will likely want to move up towards 60. 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 7:05 PM EST: WTIC loses -1.5% to 49.57, a 49-handle, so the test of that 49-50 area continues. Bring up a daily chart of WTIC. Price is basically at a matching low with positive divergence showing on the indicators. Oil is a buy if you are a nimble trader in the daily time frame. Any lower number in WTIC can be bot expecting a positive divergence bounce on the daily basis (several days of upside ahead). Look at OIS it is all set up for a nice long on the daily basis. Keystone will buy some for the possie d bounce coming in the daily time frame. Other oil plays should all be set up similarly.

GOLD Candlestick and COT (Commitments of Traders) Weekly Charts

Gold has been living the high-life since the May bottom at 1270-ish. Nine months later, the yellow metal is at 16 hundo. Traders and investors are tripping over each other to buy gold. Many read old textbooks they picked up at the dollar store that says buy gold if you are worried about the economy and markets. Gold continues to shine printing a whisker from 1600 last week.

However, with that higher high in price comes neggie d. Gold prints a higher price than the week before and higher than last August's top. The red lines show the chart indicators sloping down which is neggie d; the indicators are negatively diverging away from the SPX price that continues moving higher making new highs. It means price is out of gas and about to receive a spankdown on this weekly basis. The odd thing, however, is that the stock market is poised to sell off for a few weeks and you would think gold would catch a bid but the chart says gold will sell off with stocks. Perhaps that was such a hefty pop from 1250 a few months ago, gold is ready to digest some of that meal.

The gold monthly chart also shows neggie d for the RSI, stochastics and money flow which will work in unison with the neggie d in the weekly chart above and spank gold down over the coming weeks. However, the monthly chart has a long and strong MACD line. The MACD hints that a higher high will likely occur after the multi-week pullback. Thus, gold may drop a few weeks down to 1400-1500 but then would rally for a few weeks back up to a matching high around 16 hundo or higher.

The candlestick chart shows price rising into a wedge pattern which is bearish. The RSI and stochatics are overbot agreeable to a pullback. As mentioned the neggie d wants to create a multi-week smackdown beginning now or within the coming days. Gold has tagged the upper band for several weeks and needs to pull back to the middle band at 1512 and perhaps lower band at 1431. Price is extended above its moving averages requiring a mean reversion lower like occurred after the August top. None of this stuff is positive; it is all bearish on this weekly basis. The ADX shows that the weekly trend higher in gold price is a strong trend and remains a strong trend. However, the high in the ADX is lower than the prior high as gold made a new high; neggie d. 

For the COT chart, the green bubbles show where gold was at a bottom and began to rally while the red circles show tops where gold began to stumble. You can see the bars on the COT chart blown out to the far edges, top and bottom, so it is logical to assume that they would work their way back, to absorb the big multi-month price gain, for a week or few.

The blue circle shows the orgy in precious metals to begin the year with gold well above 1600. The lower bars of the COT chart show how there is less enthusiasm for this current price high in gold five weeks hence; neggie d. The expectation is for a pull back in gold and it will be several weeks, but after that, gold should move higher again back up to 1600 again say in April or May. There is a lot of price congestion at the 14 hundo level from last summer so price may go back down there to look around.

Since there is strong interest in gold nowadays and there will likely remain a base bid in play for the yellow metal, the pullback may be subdued and the negative divergence may not extract the revenge that it typically does. Price may only come down to tag that middle band at 1511 and then want to bounce again. You will have to se how it goes; in a couple weeks the gold price will be soggy and moving lower and you can check the charts out then.

Keystone does not have trades on in gold currently. Obviously, the play is short on the weekly basis from here forward; there are plenty of ways to play. Short GLD. Short IAU. Short UGL (which is the 2x gold long). Long GLL (which is the 2x gold short). Gold may develop into an attractive trading vehicle for this year if it develops into a trending sideways channel. Silver appears stronger than gold and if it sells off it may be more of a sideways lull rather than deep dive. 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 COT gold chart is provided by COT Price Charts and annotated by Keystone.

Note Added 8:31 AM EST: Gold 1575. Silver 17.78. 

Note Added 7:10 PM EST: Gold 1580. Silver 17.78.

SPX S&P 500 Weekly Chart; S&P 500 Prints All-Time Record High at 3348; Overbot; Negative Divergence; Upper Band Violation; Price Extended; Multi-Week Stock Market Top to Print Any Day Ahead; PBOC Steps in with Liquidity Injection

The SPX weekly chart has topped-out with neggie d. The S&P 500 prints the highest number in stock market history at 3348 on 2/6/20 (green circle). The Fed easy money wine is flowing like water. At noon each day, a chorus line of beautiful dancers prance across the floor of the NYSE. Their lovely long leg kicks highlight the green sequins, shaped like dollar signs, dotting their flesh-colored leotards.

Every day is a party in the stock market. No one is worried about stocks ever going down again and even if they do, the Federal Reserve will immediately step in and stocks will catapult higher. Moral hazard has arrived. The Fed's grand financial experiment has turned into a Keynesian Frankenstein that now breaks free from the straps on the operating table likely beginning a period of economic terror. The low CPC and CPCE put/calls, and subdued VIX, clearly verify the couple-month period of excessive euphoria, fearlessness and complacency in markets; exactly when a significant top occurs.

The weekly chart above says that time is now. Price prints the higher high, a record high at 3348, but the red lines show universal negative divergence occurring. The SPX is out of gas. All the fuel gauges now read empty so price no longer has any fuel to move higher, on this weekly basis. Thus, it is spankdown time on the weekly basis so the market sogginess will last a little while perhaps into early March (a few weeks).

When the SPX weekly chart starts printing the new candlestick at 9:30 AM EST Monday morning, make sure the neggie d remains in play to identify the top. The indicators cannot move above the thin red lines in the right margin; the indicators have to remain sloping down that is why it is called negative divergence, neggie d, because the indicators are diverging down away from price that still goes up (unlike the popular daytime television game show, the 'price is wrong').

The full moon peaks for the month at 2:33 AM EST and stocks are typically bullish through the full moon so Monday morning may see a lift in prices but that would be expected to be short-lived. The Earth and Moon are at a gravitational inflection point so earthquake and volcanic activity may increases strongly in the coming few days.

If the SPX price pokes out a stronger high, which is possible since it could always seek the upper band at 3383 if there is some type of euphoric financial news, but it is unlikely, it will probably come with neggie d remaining in place and if not, it will appear again in a couple weeks (so the multi-week down slide off the top would begin in a week or two instead of now). The middle band at 3144 and lower band at 2904 are in play going forward on the weekly basis. The SPX has topped out on a weekly basis so several soggy weeks are ahead. Price may target that large volume buy candle area from mid-December at 3200-ish and then lower. Prepare accordingly.

The geopolitical and domestic news is ridiculous nowadays; it is hard to keep track of all the adult baby stuff. President Trump is happy this weekend after the impeachment acquittal, happy job numbers, winning another lawsuit and his job approval is at the high of the presidency at 49% (although the data shows an increase in the republicans surveyed). Obviously, the other big plus for King Donny is the democrat stumble in Iowa and the lack of a strong candidate thus far which tells Wall Street that Donny is the man for four more years.

Comically, the democrats still cannot officially call a winner in Iowa, that has now become a laughing stock. The New Hampshire primary election is on Tuesday. King Donny would eat any of the democrat male candidates for breakfast. The only way the liberals win is with a woman and there are only two to pick from; Warren and Klobuchar. Warren is a lock on the school marm position but appears too fidgety and jumpy for the top job. It looks like Klobuchar is the only democrat hope so it will be interesting to see if the Democrat Tribe understands this and keeps elevating her, or if they do not, which will lead to their easy defeat in November. Biden is as crooked as the president with both men knee-deep in Ukraine scandals. Biden is damaged by the scandals but Teflon Don, the reality television mafia boss, walks away claiming total victory. The stuff is hilarious to watch.

Last evening, Donny pulls out the scythe and lops off a few heads. The president fires the witnesses that testified against him in the impeachment proceedings; Vindman and Sondland. Vindictive narcissism is never an easy image to watch; it is a dish best served cold. Humorously, the folks that place their hands on the Bible, promising to tell the truth to the best of their ability and report what they truthfully saw and heard, are destroyed by the president that will not place his small hand on the Bible and has not permitted his staff, all of which are directly involved in the Ukraine Scandal, from testifying or providing documentation. That's hilarious and it is America in 2020. Donny has to hope that the dirt on the Ukraine stuff does not come out during his campaign; it may be the only thing that could create a stumble. Trump looks like a shoe-in for the second term, at this juncture, and Wall Street responds favorably with the new high in the stock market (although Donny will not be happy after the neggie d kicks in).

The Federal Reserve is the presidents best friend. Trump should be sending gifts to Chairman Powell because Jerome is the man that holds Donny's entire fate in the palm of his hands. If Powell keeps the dovishness going printing money like a madman in the basement of the Eccles Building, Trump will coast to victory with zero effort. The easy money will keep the stock market party going into the election.

If, however, the Fed mis-steps, makes a mistake, spooks the markets, or somehow faith and confidence is lost in the central bank, look-out because things will likely get ugly fast. One potential outcome is that Powell does all the right things, in a sick central banker's eyes, but we are at the end of the 11-year Keynesian experiment, and despite proclamations of dovishness and more money-printing, markets lose confidence and the whole ball game ends.

Interestingly, if the economy tanks this year and recession occurs with stocks dropping like rocks, democrat candidate Warren, would come back into the spotlight, at least to provide commentary if she is out of the presidential race. Warren has warned about the Wall Street banks and if the ugly scenario develops, she will be able to say she told you so. The lesson in it all is that King Donny better treat Pope Powell well over the coming weeks and months. Trump's reelecton does not hinge on what state votes for him or any of that rot, instead it depends on how Powell handles the economy this year. A courier is right now running a box of chocolates over to Powell with best regards from First Lady Malania.

The coronavirus is ongoing with people dropping like flies. No one cares since they are too busy buying stocks. The world is topsy-turvy but that is expected in the bread and circus days when everything becomes entertainment. Sadly, patients are infecting the healthcare workers. The communist party has a gun to the workers heads telling them to shut up and keep working. The world is such a wonderful place. 725 people have croaked from the virus and 35K are infected; you can likely triple those numbers since the dirtbag Beijing leadership lies about all things. Everyone appears sanguine about the virus. That's the way it is with humans; no one gives a crap until danger is at the front door and by then it's too late.

Germany is spewing out some sick industrial and manufacturing data and they are the car making capital of the world. Is Peak Auto about to flush the global economy down the toilet? China's Caixin PMI data is missing estimates and weak and the latest data was before the coronavirus news hit!! Humorously, in the US, everyone celebrated joyous job gains while sweeping the manufacturing recession job losses under the rug. At the same time, the Fed and other academics, armchair and otherwise, continue to have no idea what truly was at the root of the September cash-crunch lack of liquidity event. Powell wants to slow down on all his easy money ways in about 3 weeks. Good luck wit dat, Jerome.

With the SPX topping out, the wild and erratic price action, the uber low put/calls, and other reasons, stay on guard for a flash crash event or all out crash. The weekly chart has topped out so that means several weeks of down ahead. Powell may have to make a quick and major decision at the end of this month into early March which may only worry the markets more. Well, first, let's see the smack down begin and unfold and see how it goes.

If you are new to trading and a long-only player, or a young person, or older person that cannot afford to lose money, you would be best served to get out of the stock market. At a minimum, bring on shorts. She's ready to roll over so everyone better make their decisions fast. Barring any uber happy financial news hitting the tape this weekend or on Monday, the stock market is cooked, stick a fork in 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.

Note Added Sunday Morning, 2/9/20: The death count for the coronavirus is at 813. Two Sunday's ago, 1/26/20, there were about 10 deaths. Last Sunday, it was approaching 100 dead. Now over 800. Using simple math, you can see that the deaths ramp up about 7 to 10-fold each week. Thus, on next Sunday, 2/16/20, you will have to see if there is about 5,600 to 8,000 total deaths. If so, the virus continues to wreak mayhem around the world. If the deaths as of next Sunday total, say 3K or 4K or less, a 4 or 5-fold increase over this Sunday's 800+ number, the virus may be subsiding. The full moon peaks a couple hours ago and overnight in Pennsylvania, with snow on the ground, it looks like daytime. The earthquake and volcano watch begins.

Note Added Monday Morning, 2/10/20, at 4:09 AM EST: The S&P futures are trading all over the map. Last evening, S&P futures are down -15. Of course one of the four central banker horseman of the Apocalypse (Fed, BOJ, ECB, PBOC) must ride in to save the day as is the case for 11 years running. The pale rider, PBOC (Peoples Bank of China; China's central bank), is printing money like a madman overnight, pumping liquidity into its financial system trying to steady the sinking coronavirus ship. As usual for over a decade, every central banker pump is good for 25 to 30 handles on the S&P's. Booooiiiinnnngg. S&P futures recover to +5 overnight a quick 20 handle turnaround on more central banker largess. Global financial markets are a joke nowadays. Interestingly, the S&P's then go negative -5 but then pop to positive territory up +4. No, check that, Keystone blinked so the futures change again. S&P +2. VIX 15.97. The VIX is above its critical 200-day MA at 15.13 so the bears are comfortable. Stock market bulls got nothing unless they can push the VIX below 15.13. The pop in markets from the PBOC goose is not as strong as one would expect. S&P futures should be at +10 or +15 and stable; instead the gains are subdued and the tape is jumpy. Is the end game occurring this year where confidence is lost in the Federal Reserve and other global central bankers? They have papered over problems for 11 years; can they keep the charade going? Watch that VIX 15.13 level; it will tell you a lot about the Monday trade. Note that stocks are a bit bullish moving through the full moon. Remember on Friday, the SPX 2-hour chart wanted price to sneak up for another matching high due to the long and strong MACD line. Perhaps that occurs at the opening bell and then the bears will growl. The PBOC liquidity pump overnight should be doing more for markets. China had over $4 trillion in reserves about 5 years ago. Now the communist nation has about $3 trillion and all this is not dough that can be used to support the economy. Some of that money has to sit there for solvency sake and another portion has to be used for cash flow obligations each month. The end game may be approaching for the commies and the virus may be speeding up the clock. The virus deaths are over 900 with over 40K people infected; deaths will be over 1K tomorrow.

Note Added Monday Morning, 2/10/20, at 4:36 AM EST: S&P -1. VIX 16.01.

Note Added Monday Morning, 2/10/20, at 5:14 AM EST: S&P -4. VIX 16.21.

Note Added Monday Morning, 2/10/20, at 7:10 AM EST: S&P flat. VIX 15.97.

YC3MO 3-Month to 10-Year and YC2YR 2-Year to 10-Year Yield Curve Daily Charts

The 3-month to 10-year yield curve inversion occurred again in late January. YC3MO continues fighting at this zero line where the inversion occurs. The 2-year yield to 10-year yield curve, YC2YR, the 2-10 spread, was last inverted in August. Investors are paying attention to the yield curves since a recession typically follows in 8 months to 24 months time.

Hmmmm, Keystone scratches his bald head, the 3's-10's first inverted in March 2019. Time flies when you're having fun. That is almost a year ago, may as well call it a year ago, when the first inversion occurred. Hang on to your hats. Perhaps the road may become more rocky ahead. A recession is likely approaching far faster than anyone realizes. The global economy has been weakening for a while and the coronavirus is a shiv to the ribs. The question is if the Fed and other central bankers can keep printing money to save the day. 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.

MTRX Matrix Service Weekly Chart; Matrix Crashes -36%

Goodnight Irene, Irene Goodnight. Matrix Service is in the engineering, construction and maintenance business of power plants, chemical plants and other facilities. Matrix has an expertise in the liquefied natural gas (LNG) industry and disappointed on earnings. MTRX crashes -36% last week. There goes one-third of those workers' pension money. Zachariah jumps up from the folding chair in the back of the packed lunch room exclaiming, "But I bot stock through the company share plan!" Management exits stage right.

The coronavirus is another bugaboo in the side of the liquefied gas industry. China is declaring force majeure on LNG shipments. LNG carriers cannot unload cargoes due to the pandemic that has shut down major cities. Natural gas, natty, is shipped via ocean tankers. It is a waste of time to transport actual gas since it takes up too great a volume. Thus, natty is liquefied by lowering it to extremely cold temperatures. This process reduces the volume by 600 times. Liquefied natural gas occupies 1/600th of the volume that natty gas, in its gas state, occupies.

This creates the need for special cryogenic process engineers that can design tanks and equipment properly to handle boil-off gases (vaporization is constantly occurring off the super-cooled liquid) which is a specialty of MTRX. So it is not a pretty sight when there are docking problems for ships since they need to unload those cargoes and it is a black eye for the LNG industry.

A lot of natural gas is likely going to have to be flared to the atmosphere (those are the tall stacks you see at plants that show a flame burning like a candle). These flares are actually for safety at the plants since pipes gather up all flammable waste gases at the facility and send them up the flare to be burned off safely. Matrix takes a nosedive off the side of an LNG storage tank. Better luck next time. EXTN dumps -6% last week. RES crashes -13%. TTI -4%. LNG loses -4%. TELL -3%.

It is a shame the US is stupidly pursuing the electric car craze when natty gas vehicles would be a far better direction to go in. We have gas coming out of our ears and natty burns super clean. The infrastructure plan would create hundreds of thousands of jobs. Alas, it is better to burn coal to create electricity that we can plug into a car and say that we are doing our part for the environment. Aren't humans funny? It's a Wild Wild Life. 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.