SPX S&P 500 2-Hour Chart; Oversold; Falling Wedge; Positive Divergence; Lower Band Violation

The SPX collapses -2.4% today, Wednesday, 9/23/20, to 3237. The SPX 3588 top seems like a distant memory. From 3588 to 3237 is a loss of 351 points during the selloff thus far; a -9.8% crash. A -10% drop is considered a correction and a -20% drop off the high is considered a bear market. The market makers stopped the SPX from entering correction today so everyone could catch their breath overnight and maybe rethink the carnage route ahead.

Instead of a calm night of reflection, Whitehouse Economic Adviser Kudlow runs to a microphone proclaiming that the US does not need another large stimulus bill. Kudlow harpoons the futures with the S&P's down -17 points. King Donnie will probably make Kudlow walk the plank and retract those harsh words tomorrow morning. The stock market is in serious failure right now so it would be surprising to not hear some type of happy talk in the morning, either from the Fed touting more money-printing, or Congress proclaiming that a stimulus bill is nigh, or King Donnie announcing that a vaccine is available next Tuesday.

Despite the stock market bloodbath with volatility, utes, retail stocks, chips and copper all jumping off a cliff creating negativity, the SPX 2-hour chart wants to bounce. If there is happy talk, the 2-hour possie d will kick into gear and the bulls will be given a reprieve.

The green falling wedge is bullish. The green lines show the positive divergence in play which has price fueled up ready for a big bounce in the 2-hour time frame. The RSI and stochastics are coming off oversold levels. Price has violated the lower band (today's LOD is 3232 with the lower band at 3230 but that is close enough for government work) so the middle band at 3303 and upper band at 3377 are in play. All of these parameters are bullish for the stock market in the 2-hour time frame.

The RSI and stochastics are slapped down currently so it may take a candlestick or two (2 to 4 hours which would be 11:30 AM EST to 1:30 PM EST Thursday) for the launch to begin. Price is at that lower rail of the triangle a logical place to bounce from. If the happy talk does not occur in the morning, the 2-hour chart will likely rule the day and bottom in the morning sometime or noon time and then a mini rally will begin. However, if Kudlow refuses to walk the plank or some other negative news occurs overnight, Katy bar the door, because there is a powerful sh*tstorm coming at you and you bess take cover.

The SPX daily chart shows a weak and bleak RSI and MACD line, and money flow with the stochastics and histogram possie d. The 2-hour will likely conspire with the stoch's and histo on the daily creating the bounce in the 2-hour time frame say from tomorrow morning into Friday, but the daily will reassert itself and it wants to see another lower low for price say a few days out in the daily time frame. The markets are Rockin' in the Free World. 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 Morning, 9/25/20, at 2:22 AM EST: The SPX bottoms at 9:40 AM EST yesterday and receives the possie d pop. Price started to stall sideways but there is Pelosi and Mnuchin chatter about a fiscal stimulus bill. Who would've thunk it? The dirtbag politician's actions are easy to predict once you spend time observing the animal's behavior. S&P futures are +11. The CPC and CPCE put/call ratios are still not elevated as yet to demonstrate panic and fear. The dip-buyers keep tripping over each other to buy, buy, buy, knowing that the four central banker horseman of the financial apocalypse, the Federal Reserve, BOJ, ECB and PBOC, will print money like madmen to send equities higher forever, er, at least until the Fed rides in for the last time on the pale green horse. The put/calls need to move higher to show panic and fear before nibbling on any long positions. Once the day is underway and the 2-hour chart prints a couple candlesticks you can start to watch for when the near-term top will occur due to neggie d. It is expected that stocks will roll over and die again, perhaps on disappointing news with the fiscal stimulus bill, since panic and fear remains on a milk carton (missing). You will see panic and fear and that is when you want to run into the burning building to buy stocks as everyone else is running away dumping their long positions while screaming bloody murder.

NYA NYSE Composite Weekly Chart; Battle for Cyclical Market Control at the 40-Week MA

The Keystone Speculator's NYA 40-Week MA Cross Cyclical Stock Market Indicator is at an epic point right now. The NYA moves above the 40-week in July ushering in a cyclical bull market that is ongoing for 3 months. It is now time to test that cyclical bull. NYA price is at 12359 only 53 points above the critical bull-bear line in the sand at 12306. If 12306 fails, the bears will usher in stock market carnage and the bulls will be riding a Highway to Hell.

If the bulls can maintain the 12306 support, staying above, and over the coming days move higher, the bulls are okay from the cyclical market perspective even if some further weakness in equities occurs in the near-term. If 12306 holds, the bulls will be Shiny Happy People.

NYA 12306 is critically important and if it fails, you will feel its wrath. 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 Morning, 9/25/20, at 2:44 AM EST: The NYA loses the 40-week MA at 12306 out of the gate yesterday but that was short-lived. The NYA ends the day at 12366 making for happy bulls. Keep watching this critical signal especially if you prefer to trade or hold positions over the intermediate term (weeks and months).

Keybot the Quant Turns Bearish

Keybot the Quant flips to the bear side at SPX 3254 this afternoon. The whipsaw price action continues. The stock market deteriorated this afternoon with volatility, utilities, retail stocks, chips and copper jumping into the bear camp. The SPX plummets 79 points, -2.4%, to 3237. That qualifies as carnage and a bloodbath.

You know the drill over the last 11 plus years. You see the substantive parameters above that failed. Yes, it is likely that the Federal Reserve will ride to the rescue since the stock market failure is serious. Pope Powell may ride in on his pale green horse before the opening bell tomorrow and announce more money-printing, or, Congress will spout happy talk about the stimulus bill, or, King Donnie will say a covid vaccine will be available next week; anything to create a stick-save for equities and protect America's wealthy elite class (that own large stock portfolios).

More information is found at Keybot's site;

Keybot the Quant

Keybot the Quant Turns Bearish then Whipsaws Back to Bullish on 9/21/20

The Keystone Speculator's trading algorithm, Keybot the Quant, flips bearish after yesterday's opening bell then flips back to the bull side before the closing bell. Monday, 9/21/20, yesterday, was nutso. The 3-ring circus was in full swing with the stock market bears singing. Keybot the Quant is long from SPX 3282 after yesterday's whipsaw circus. Bulls need lower volatility while bears need weaker utilities and chips. As always, more information is found at Keybot's site;

Keybot the Quant

BPSPX S&P 500 Bullish Percent Index Daily Chart

The Keystone Speculator's BPSPX Indicator remains on the double-whammy sell signal. The bulls were happy in August into early September. The BPSPX tops-out at 79. The six percentage-point reversals and the 70% level are key signals. Thus, a drop below 73 would be a sell signal and then a drop below 70 would be a double-whammy sell signal. Both occur.

The BPSPX drops to 61 a few days ago. Thus, the bulls need a six-point reversal which would be 67. Bulls staged a comeback relief rally into last Wednesday afternoon when a bull trap sprung and chopped the optimistic long's heads off. Price drifts lower again to end the week at 62.2.

The BPSPX remains on a double-whammy sell signal creating stock market negativity as long as price remains below 67. If the BPSPX pops above 67, that will be a buy signal and stocks will be rallying strongly. A move above 70 would be a double-whammy buy signal.

The bulls may mount another mini-comeback rally like early last week. If so, watch that 67 level like a hawk. If the bulls cannot push it above, and the BPSPX rolls over lower, "Sell, Mortimer, Sell!" The stock market will then likely roll over and die. 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 Tuesday Morning, 9/21/20, at 5:20 AM EST: The BPSPX collapses to 49.40 during the Monday stock market selloff. Bears remain in control unless the bulls move the BPSPX above 55.40 (49.40 + 6).

Note Added Wednesday Evening, 9/23/20, at 8:15 PM EST: The BPSPX collapses to 46.20 during today's hump day stock market selloff. Bears remain in control unless the bulls move the BPSPX above 52.20 (46.20 + 6).

USD US Dollar Daily Chart; Inverted H&S Patterns

Here is the US dollar daily chart, USD or DXY, that has been of interest due to the bottoming behavior over the last month. The dollar weekly chart receives a pop due to positive divergence, as does the daily above, and a multi-week dollar rally is expected. The MACD line on the weekly is flat and very extended to the downside; it is an iffy call on possie d, but the benefit of the doubt would be given to the dollar bulls and the multi-week rally is about to take off higher. If the dollar retreats over the coming days that will only serve to set up the multi-week rally.

The February-March crash was exacerbated by the big pop and rally in the dollar in March. Considering the uber complacency in the stock market verified by the low CPC and CPCE put/calls, it is easy to see the perfect storm about to begin where the dollar pops, and then really pops as the mountain of shorts panic, and the stock market tanks. There are interesting days ahead probably historic days.

The SPX is moving through the channel created by the 20-day MA resistance at 3428 and the 50-day MA support at 3340. The S&P 500 begins the Friday session at 3357 which is 17 points above support and 71 points from resistance. Interestingly, the dollar is also moving through the same channel. Dixie is bound by the 50-day MA resistance at 93.73 and the  20-day MA support at 92.97. The SPX and USD charts tell the tale.

If the dollar continues breaking out higher, with the euro drifting lower, and dixie pops above the 50-day MA at 93.73, it will probably be a moon shot higher and the SPX will collapse through its support at the 50-day. This outcome is consistent with the uber low put/calls that signal a significant top right now. It can easily be February-March redux. The put/call ratios are rising now but there still needs to be panic and fear to signal a tradeable bottom.

If the dollar rolls over, as the euro climbs higher, and falls through that 20-day MA support at 92.97, exactly where it is parked on the chart, that would favor the bullish outcome and the SPX will run up through the 20-day MA resistance and higher. Either way you slice it, the dollar charts are set up, or days away from being set up, for a multi-week rally which will likely tank the stock market.

The inverted head and shoulders (H&S) patterns are highlighted. The blue inverted H&S has a head at 92.10 and neck line at 93.70 so a break above 93.70 would target 95.30 an area of price resistance from July. The purple inverted H&S pattern has a head at 92.10 and neckline at 93.40 so a break above 93.40 would target 94.70 an area of price resistance from July. DXY is currently trading at 92.80 falling below the 20-day MA support favoring stock market bulls (dollar bears). Euro 1.185. S&P futures are up +3. VIX 26.21. 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 Saturday, 9/20/20: USD is at 93.00 on the dot sitting on the 20-day MA support/resistance at 92.97. The buck will pivot one way or the other and the US stock market will probably move in the opposite direction.

Note Added Tuesday Morning, 9/21/20, at 5:25 AM EST: USD 93.69 with a HOD at 93.89. The dollar moves higher and stocks and gold move lower.

Note Added Wednesday Evening, 9/23/20, at 8:08 PM EST: USD 94.38 with a HOD at 94.40. The SPX collapses 79 points, -2.4%, to 3237.

Note Added Thursday Morning, 9/24/20, at 4:07 AM EST: USD 94.32 with a HOD at 94.49. SPX 3237. Euro 1.1666. Gold 1860. Silver 22.29.

SPX S&P 500 60-Minute Chart with 200 EMA Cross

The Keystone speculator's SPX 60-Minute Chart with 200 EMA Cross Indicator signals a short-term bull versus bear market. The 200 EMA on the 60-minute is 3387. Price is at 3357 predicting bearishness ahead. That is 30 points below in the bear camp. Bulls will need 30 points to move back above the 200 EMA.

That whipsaw behavior back and forth across the 200 during September is unprecedented. Usually the cross occurs more cleanly. The bulls and bears are both getting cut up in a knife fight in the alley. The bears last created a negative cross in late June but the bulls quickly reversed that negativity with the Fed pumping stocks into the blow-off top.

SPX 3387 is the rudder steering the stock market ship. Every hour price is below 3387 is another nail in the bull coffin. If the S&P 500 pops above 3387, the bulls will be off to the races higher with equities finishing the week with a happy ending. 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

The Keybot the Quant algorithm flips to the bull camp this afternoon at SPX 3429. The S&P 500 then fell like a stone. Commodities, volatility and utilities are controlling stock market direction currently. Bulls need UTIL above 827. Bears need VIX above 27.54 and GTX below 1720. Stay alert for a potential whipsaw. More information is found at Keybot's site;

Keybot the Quant

CPC and CPCE Put/Call Ratios Daily Charts; Significant Stock Market Top is At Hand

Moral hazard has arrived. The Federal Reserve, and other global central banks, have been printing money for over 11 years and traders and investors are now officially Pavlov's dog. Everyone always expects the Fed to pump the stock market higher forever so folks want to buy every dip with enthusiasm. The fearlessness is off the charts for the last four months. This behavior is unprecedented.

The low CPC and CPCE put/call ratios signal a significant stock market top occurring. If stocks rally after Powell, the charts above tell you that you should be selling the rips not buying the dips. A nice tradeable bottom does not occur until the prices move above the green lines. You want to buy when people are running for their lives screaming bloody murder. Simply prepare a long list but wait for the panic and fear to arrive before you begin nibbling. 

Everybody and his brother are committed to the stock market and do not believe it will ever pull back in any meaningful way just like when American economist Irving Fisher said the stock market was at a permanently-high plateau, in 1929. 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 Morning, 9/17/20, at 2:36 AM EST: Fed Chairman Powell promises ZIRP through 2023. The central bankers are sick. Powell says bond purchases will remain at current levels. Stocks pop on the dovishness but then roll over into the closing bell. The SPX HOD is 3428.92 and the 20-day MA is 3428.74. Price comes up for a test of this key resistance and is spanked back down. The SPX finishes Wednesday down 16 points, -0.5%, to 3385. S&P futures have been deteriorating the last couple hours from -33 down to -65 currently about a -2% drop for the S&P 500 cash index if the futures remain negative. The Federal Reserve's grand 11 plus year Keynesian financial experiment is beginning to unravel. Treasury yields tick a bit higher since some bond traders likely expected more bond purchases. Higher rates hurt utilities. If the dollar rises, especially in a short squeeze, as described here over the last month with the dollar charts bottoming, commodities will be whacked.

SPX S&P 500 Daily Chart; Price Bouncing Through the 20 and 50-Day MA Channel; Markets Await Federal Reserve Rate Decision and Press Conference Today

Fed day is at hand. The stock market typically moves higher 80% of the time the day or two going into the Fed meeting and this expected activity occurs again this time around. S&P futures are up +13 with VIX at 25.35 this Wednesday morning 4-1/2 hours before the opening bell. Markets await Pope Powell to return from the mountain on high and tell global traders how to trade this afternoon. The Fed decision is released at 2 PM EST with the press conference beginning at 2:30 PM EST. The central bankers are the market.

Interestingly, the new moon peaks this month at 7 AM EST tomorrow (Thursday) morning and stocks are typically weak moving through the new moon. This is the darkest time of the month so the militaries with advanced night vision technology will carry out covert raids. If a military event was going to occur before the US presidential election, it would likely occur over the coming days to take advantage of the pitch dark.

The SPX continues to battle through the channel created by the 20-day MA resistance at 3429 and the 50-day MA support at 3331. Price is at 3401 to begin the day so 28 points from the upper rail and a breakout and 70 points from the lower rail and a breakdown. This afternoon, Pope Powell will appear in a toga robe with a garland on his head a la Julius Caesar of ancient Rome. The sycophant of the elite privileged class will extend his right arm outward and turn his thumb up or down to dictate which way the SPX breaks.

If Powell is cooing dovishly promising quadruple double triple infinity money-printing to continue as long as time exists, that will send stocks soaring higher. If Powell is perceived as a tinge hawkish, stocks will drop like rocks. With stocks remaining at such elevated levels, they may drop, no matter what Powell and his friends say.

That's a lot of spaghetti in the chart above. Ready for some mumbo-jumbo? The red lines show the negative divergence that created the spankdown in price. Interestingly, when that blow-off top day occurred, the RSI popped so technically that has a bit of fuel remaining to help re-elevate price. Price dumps about 250 points during the selloff and begins bouncing through the 20-day and 50-day channel. The SPX backtested the 20-day MA as would be expected and has now tested this 3425-3429 level three times over the last five days. If Powell provides upside fuel, the SPX will pop up through the 20 and target that price resistance at 3450. Above that and the bulls will try to run stocks back up to the record highs. Powell holds the key.

If stocks fail after Powell, the blue two-leg bear flag pattern may play out. The first leg is 250 points south. If price drops say from the 20-day MA resistance at 3429, the target is 3179, call it the 3180-3200 area right where strong price support is at. When the SPX placed the low three days ago, the bounce occurs due to the positive divergence with the RSI and stochastics as well as the oversold stoch's. The MACD, histogram and money flow remain weak and bleak wanting to see price come down for a lower low.

The golden cross is shown with the gold circle where the 50-day MA crosses above the 200-day MA a bullish signal. Usually a pullback occurs after the golden cross and then price will continue higher as long as the golden cross remains. The SPX simply took off higher after the golden cross and never looked back. The world is awash in liquidity due to the global central banks printing money like madmen. That easy money is used to buy stocks, bonds, real estate, vineyards, art, antique cars, etc..., sending all asset classes into bubble territory.

The pink box shows that the rally higher is a strong trend higher in late August but this peters out a week ago during the selloff. The Aroon negative cross occurs. The purple lines show key price support levels going forward. The purple circles show juicy gaps that will need filled at some point forward. The brown boxes show the massive volume days all to the sell side. Even that volume candlestick at the end of July was a selling event all day until the last hour of trading that turned things around to paint it a buy candle. Price will want to come back down to test that price at 3270-3290 which is also price support and a gap-fill.

Keybot the Quant remains short during the big rally off the low three days ago but is champing at the bit to go long. Keybot likely wants to see SPX 3419 and higher to flip long. That represents about a +17 pop in the S&P futures and look at that. S&P futures are up +17 with the VIX at 25.31. The bulls know the number they need (3419+) and are counting on Powell to deliver the dovish talk and pump stocks higher. Bulls would be better off to see price slowly travel higher. If the gap-up open occurs, the quant will likely delay the flip to the long side for about 90 minutes even if the 3419 level is taken out.

Watch the 20-day and 50-day channel since the breakout, or breakdown, respectively, tells you the path ahead. It is all in Pope Powell's Holy hands. The central bankers are modern-day Money God's. 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 Morning, 9/17/20, at 2:36 AM EST: Fed Chairman Powell promises ZIRP through 2023. The central bankers are sick. Powell says bond purchases will remain at current levels. Stocks pop on the dovishness but then roll over into the closing bell. The SPX HOD is 3428.92 and the 20-day MA is 3428.74. Price comes up for a test of this key resistance and is spanked back down. The SPX finishes Wednesday down 16 points, -0.5%, to 3385. S&P futures have been deteriorating the last couple hours from -33 down to -65 currently about a -2% drop for the S&P 500 cash index if the futures remain negative. The Federal Reserve's grand 11 plus year Keynesian financial experiment is beginning to unravel. Treasury yields tick a bit higher since some bond traders likely expected more bond purchases. Higher rates hurt utilities. If the dollar rises, especially in a short squeeze, as described here over the last month with the dollar charts bottoming, commodities will be whacked. Keybot the Quant flipped to the long side yesterday but with the dicey markets perhaps the robot will whipsaw back to the short side.