Thursday, July 25, 2024

CPC Put/Call Ratio Daily Chart

The stock market top arrives as per the rampant complacency and fearlessness. Stocks were ready to top out in late June but the festivities were delayed a couple-three weeks due to the Independence Day holiday, Pope Powell flapping his dovish wings (rate cuts coming), happy inflation data and Jensen waving a black box in the air every 10 minutes proclaiming that AI is the Second Coming.

Typically, you do not want to nibble on longs until the CPC moves higher towards and above 1.20 when panic and fear sets-in. That level tells you that people are selling their stocks in a panic, throwing the baby out with the bathwater, swearing they will never buy a stock again. Of course, that is when you want to buy. The prior three peaks above the green line were tradable bottoms in the stock market.

You knew the stock market was topping-out due to the rampant complacency and negative divergence on the SPX charts; nothing to it. Even as a few days ago, there were jackasses on television and the internet proclaiming that everyone was pessimistic so stocks had a long way to rally. Dolts. All these idiots had to do was look at the charts. 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.

Thursday, July 18, 2024

Keybot the Quant Turns Bearish

Keystone's proprietary trading robot, Keybot the Quant, flips short yesterday morning at SPX 5615. Watch volatility, copper, commodities and chips. Nothing Else Matters.

Keybot the Quant

Note Added Sunday Morning, 7/21/24: Keybot is updated for the drama ahead. Keybot the Quant.

Tuesday, July 16, 2024

SPX S&P 500 Weekly Chart Displays the 666 Bottom in March 2009 and Potential 5666 Top in July 2024?

The United States stock market, the S&P 500, SPX, places the bottom at 666 in March 2009 and interestingly, may top out at 5666 in July 2024? Over the last 15 years, the Federal Reserve's money printing has created vast wealth for the privileged elite and the upper middle class sycophants that service the wealthy; the have's. Crony capitalism gone amuck.

One-half of Americans, the have-not's, do not own a single share of stock. Capitalism does not exist. If you accept this fact, everything will make a lot more sense to you. The have's continue spending their obscene stock market gains keeping the overall US economy out of recession while common Americans suffer each day to make ends meet and many cannot pay their bills while working two jobs. Welcome to crony America. Time will tell if the mark of the beast is having mischievous fun. It's a Long Way to the Top. We need some bagpipe. 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 Morning, 7/17/24, at 5:43 AM EST: The bulls push above 5666 in the final few minutes of trading on Tuesday. The SPX prints a new closing high at 5667.20 and new all-time high at 5669.67. Comically, the 0.67 cents portion is rounded up from 0.666. The beast remains mischievous.

Note Added Sunday Morning, 7/21/24: The SPX topped out at that 5670 last Tuesday so 0.666 marks the top. The SPX is at 5505 losing 165 points, -3%, in only 3 days. The S&P 500 drops more than -1% for each of the two days after the all-time historic high at 5670 is printed. This behavior has never happened before in stock market history.

Note Added Wednesday Afternoon, 7/24/24, at 5:10 PM EST: The US stock market sh*t the bed today. The SPX mini-crashes 129 points, -2.3%, to 5427. The Dow collapses 504 points, -1.3%, to 39854 below 40K. The Nazzy mini-crashes 655 points, -3.6%, to 17342. .

Friday, July 12, 2024

XLF Financials ETF Weekly Chart; Bank Earnings Season Begins; Potential Triple Top (that are supposed to not exist); Negative Divergence; Tight Standard Deviation Bands Forecast Big Move Ahead; Price Extended



The bankster yearnings are on tap this morning starting with JP Morgan, Citigroup and Wells Fargo. The results are only a couple hours away. Wow!! Hey everyone, the Wells Fargo wagon is a comin' down the street!! Of course the bank earnings over the coming days will dictate the path ahead even though the chart is set up negatively.

The blue stars show the potential triple top in the XLF an ETF that holds banks, insurers and other financials. We watched the Apple triple top a short time ago, that turned out to not be a triple top because price catapulted higher on more AI hype. Instead of AI, they should call it AJ for, "Ask Jeeves."

As Keystone has said many times, trip tops are 50/50 propositions. Even though the old adage says, "Triple tops do not exist," they actually hold about half the time (price drops from the third peak) and fail half the time (price jumps higher nullifying the third peak).

The three peaks in price come with negative divergence across all chart indicators (red lines) so the XLF wants to begin a multi-week slide lower technical-wise but as stated above, bank earnings are on tap so flip a coin. The upper band is at 42.48 so it would be prudent for price to tag that number on the top side. The purple arrows show a tight band squeeze occurring so the move from earnings is going to be a big one. Unfortunately, tight bands only predict magnitude and not direction.

Price is extended above the moving average ribbon so a mean reversion lower is needed. The Aroon green line shows that about 70% of the bank bulls expect prices to continue higher forever while the red line shows that 100% of the bank bears have capitulated and believe that prices will continue higher forever. That's funny. The bank bears have left town and are in hibernation. The Aroon is a contrary indicator. If you look at the early 2023 fractal (brown box), that is where she is at again, and that created an exciting collapse as the red line shoots higher and green line collapses.

The ADX pink box shows that the strong trend higher for the financials remains in place although it is trending lower and may fall out of the box over the next couple weeks or month. The ADX is a lagging indicator that will serve as confirmation that trouble is on tap as the strong trend higher is lost.

The purple circles show distribution occurring all year long (smart money passing off shares to the dumb money). Analysts and money managers appear on business television touting banks because they are pumping and dumping. They need the public to serve as the bag holdin' sucka's.

The XLF daily chart is also in negative divergence wanting to top-out, however, there is VST momo occurring this week. Short-sellers are likely covering their negative bets ahead of earnings adding upside fuel. There are insider traders already trading off earnings numbers they know but the public does not. Wall Street is a corrupt casino; everyone knows that. If earnings were not on tap, banks would be expected to become soggy and roll over for a multi-week drop.

The chart is set up for a multi-week slide lower but the earnings can change that picture for a couple weeks or so. If the trip top is nullified and price takes off higher, the XLF will then set up for the multi-week slide in 2 to 4 weeks. Simply watch for the neggie d to reform. Keystone is not long or short any of the banks or financials (except what is held in generalized index shorts). Let the festivities begin. A lot will be known over the next couple hours.

XLF begins the day at the 42.24 palindrome. In the pre-market, XLF is up to 42.40 and tagged 42.48 (upper band) a couple hours ago. Of course, these numbers will change once the corrupt Three Stooges release their earnings. JPM is 207.45 now trading at 207.21 in the pre-market. C is 65.71 now trading at 65.53. WFC is 60.16 now trading at 60.01. 

Everyone is impatient for the bank earnings. That sounds like the latest song from Pixies that just dropped. Love the rock 'n roll driving beat. You're So Impatient. 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 7:00 AM EST: JPM and WFC are the first banks out of the gate with earnings and they fall on their face. A wheel just fell off the Wells Fargo wagon and no one is singing anymore. WFC collapses -6% to 56.70. JPM loses -0.8% to 205.80. C sits at 65.70 and XLF is at 42.23 now flat losing all the pre-market joy.

Note Added 9:24 AM EST: C bucks the negative trend topping expectations gaining +1.4% to 66.65. JPM 206.49. WFC 56.50. XLF sits at the 42.24 palindrome in the pre-market unsure on which way to run.

Note Added 9:33 AM EST: The US trading session begins with Citi leaking lower. C 65.70. JPM 203.49. WFC 55.97. XLF 42.27.

Note Added Saturday Morning, 7/13/24, at 5:40 AM EST: The bank yearnings are off and stumbling. JPM finishes yesterday down -1.2% to 204.94 flat on the week. C is thwacked -1.8% to 64.52. WFC lost a couple wheels off the Wells Fargo wagon collapsing -6% to 56.54 a huge gap-down. Television pundits that just lost their shirts are proclaiming that now is the best time to buy WFC. Despite the negativity in the kick-off of the bank earnings with the Three Stooges, the XLF floats higher +0.3% to 42.38 on Friday. XLF pops +2% this week ahead of the yearnings. The trip top remains and next week's bank earnings will dictate if triple tops exist, or if they don't. V, MA, GS, BX, PGR, CB, AIG and PNC are higher on Friday providing lift to XLF. Thus, credit card companies and insurers helped buoy the XLF. Regional bank earnings will come into play next week. America's garbage crony capitalism system allows thousands of unneeded banks to operate that only pose a threat to the overall financial system. KRE gains a huge +9% last week to 52.09; keep an eye on it.

Note Added Tuesday Morning, 7/16/24, at 6:00 AM EST: Goldman Sachs reports yearnings yesterday and creates happy action in the financial space. GS finishes the Monday session up a huge +2.6% and the XLF catapults +1.5% higher to 43.00. The banksters are popping champagne corks while guzzling Fed wine. It's party time at the corrupt casino.

Note Added Tuesday Morning, 7/16/24, at 7:00 AM EST: BAC reports happy numbers and pops +2% in the pre-market. The banksters break out in song; Happy Days Are Here Again, la, la, la.....  No more cares or troubles. Wheeee. Whoopie. Morgan Stanley will report shortly and try to keep the financial party going. XLF 43.15. JPM 210.69. C 65.55. WFC 58.00. KRE joins the bank orgy jumping higher to 54.31. XLF launches higher verifying that 'triple tops do not exist'.

Note Added Tuesday Morning, 7/16/24, at 8:35 AM EST: MS soils the sheets collapsing -3% on earnings to 102.12. XLF 43.09.

Note Added Wednesday Morning, 7/17/24, at 5:50 AM EST: The big bank earnings euphoria creates a new all-time high in the SPX at 5670 and sends the small cap indexes to the moon. Regional banks will put their cards on the table in the days ahead. XLF rocket launches higher to 43.49, into the stratosphere, out of the tight bands. Remember, tight bands tell you a big move is coming but do not predict direction; in this case it was obviously up.

Wednesday, July 10, 2024

US Monthly Jobs Report; Jobs Created Trending Downward for Last 2-1/2 Years

Draw the trend lines for the creation of US jobs over the last 2-1/2 years any way you like and they all end up the same; sloping downward. Keystone draws three trend lines with a purple crayon. He likes purple crayons because they taste like grapes. The jobs created in the US Monthly Jobs Report have leaked lower for the last 2-1/2 years. What part of that don't you understand? Pope Powell shifts his main focus from inflation to the softening labor market perhaps worried that he has waited too long to cut rates.

Sunday, July 7, 2024

The Keystone Speculator's Unemployment Rate Chart; US LABOR RECESSION STARTED 9/8/23 NOW 10 MONTHS ALONG AND COUNTING



THE UNITED STATES LABOR RECESSION STARTED ON 9/8/23 AND IS 10 MONTHS ALONG AND COUNTING. The country also remains in a housing recession and manufacturing recession but an overall US recession continues vacationing with Godot. That is craziness.

The economy is carried on the backs of the wealthy elite, and the upper middle class sycophants that service the wealthy, as they continue to spend money feeling the wealth effect after decades of easy stock market gains courtesy of the Federal Reserve's money-printing. Tech is the overriding force in the markets these days as chips are worshipped like the golden calf in the desert. Semiconductors are the new gold and the AI afterburners launch the tech euphoria into the stratosphere. These forces, the wealthy with pockets full of money, and the tech/semi/AI hype trade, are overcoming the sickness in the labor market, housing market and manufacturing sector.

However, as Willie sings, all good things come to an end and the Party's Over. For the last couple months, the wealthy elite and upper middle class are showing signs of less spending perhaps some now worried that their cushy job, lying around at home, doing minimal productive work, has an expiration date. Airports continue setting records for travel so it will be interesting to see if that lessens. Artificial Intelligence, AI, has become All-In with the Uber guy, shoeshine boy and doorman buying NVDA with entire paychecks.

Here is the link to the prior chart and commentary that provides more color on America's crony capitalism system in its last throes.

The unemployment rate continues higher now at 4.1% as shown on the righthand side of the chart the highest since December 2021, 2-1/2 years ago, when the rate was 4.2% and on its way lower in 2022 and 2023. The low prints were a 3.4% rate in February 2023 and May 2023. The US unemployment rate is now 0.7% above those lows.

The blue line is diverging up and away from the red line which means trouble ahead and it is time to watch your wallet. Over the coming weeks and months, some of you will be called into the boss's office that will tell you to clear your desk drawers, pack up your family pictures, house plant that needs watered, and change for the coffee machine, and get the Hell out. Oh yeah, hand in your badge and door card since you are no longer allowed in the building. Branded.

Young adults under 40 years old will learn a lot about yourselves and the people around you as the country slides into recession this year. You lived through the pandemic recession but that was an oddball animal in its own right. In an economic recession, you or your significant other will likely lose your job, maybe both of you, so obviously you should already be planning for such an outcome. Also understand, that if you think it is easy to get another job now and you are not worried, you are living a false reality. In a recession, hundreds of other folks will now want the same available job and the guy that told you to call him anytime you wanted to work for him now does not even take your phone calls.

For the next Jobs Report on 8/2/24, the unemployment rate can be 3.8%, 3.9%, 4.0%, 4.1%, and higher, for the US labor recession to continue. The rate would need to drop to 3.7% or lower to nullify the labor recession and instead point towards a steadier growth pattern ahead. With the rate at 4.1% now, in an uptrend, it is hard to imagine that a 3.7% print will occur in 4 weeks. It would be a huge 0.4% pullback. It is easier to Imagine, as John sings, that a 4.2%, 4.1% or 4.0% number will occur on 8/2/24. It appears that, like Uncle Bob in a guest room downstairs, the labor recession is here to stay and does not want to leave.

Sunday, June 30, 2024

YC2YR US Yield Curve (2-10 Spread) Weekly Chart; Yield Curve Inverted for 2 Years the Longest Ever; Tight Band Squeeze Forecasts Big Move Ahead



The US yield curve, the 2-10 spread, is inverted for 2 years the longest inversion in history. Put that in your pipe and smoke it. Typically, a recession appears within about 18 months of the inversion and we are looking at that milestone in the rearview mirror.

The first orange circle shows an inversion tease in March 2022, showing a little leg, but then quickly dis-inverted. Legs. In June and July 2022, two years ago, the inversion occurs and the 2-year yield is now higher than the 10-year yield forecasting a recession at some point forward. It is the Godot Recession. Everyone is waiting around for Godot to show up, and waiting, and waiting, ........ hey pal, we're still waiting. Where's that Godot Recession guy?

The blue hook patterns are key since they start a potential dis-inversion but you can see that every time the hook started to form, it then petered out before the spread could move back above zero and dis-invert. The parlor game continues. A recession is coming and likely extremely close since 2 years is a long time for the curve to stay inverted.

The green lines show the spread inverting further (moving down) in 2022 and the first half of 2023 but you can see the chart indicators are all positively diverged and voila, a bounce occurs off the bottom at -108 basis points. Wow. It looked like the curve was on its way to dis-invert and the recession would quickly follow but alas, the spread rolls over again after tagging -13 bips (resistance). The spread tried to dis-invert again starting at the end of last year into early this year but smack, it hit the -13 bips resistance ceiling and received a spankdown from the neggie d (red lines).

The spread staggers sideways the last few months like a drunk in Times Square last night. Note the tight squeeze of the standard deviation lines (purple arrows). Tight bands indicate that a sizable move is about to occur but they do not predict direction. It is like squeezing a tube of toothpaste; you know it is going to fly wildly out of the tube but you do not know where it will go.

The spread dis-inverted 12 bips last week to -37 bips currently. The 2-year yield is 4.75% and the 10-year yield is 4.39% so the difference is -0.36% or negative 36 bips. That is close enough for government work to the -37 bips on the chart.

The slight bump higher in the spread last week comes with the indicators giving off a sliver of possie d to help fuel the upside. Overall, however, the indicators are not tipping their hands and simply lining out sideways waiting on Pope Powell to tell everyone how to trade. The upper band at -29 bips is an upside resistance target at -28 to -29 bips. If this is taken out, the -13 bips line in the sand is the next key resistance. If this is taken out the dis-inversion will likely occur and the spread will move back above zero.

The Aroon is interesting. The red line shows that 100% of the folks expecting the spread to drop and invert deeper continue to universally expect the spread to drop again. At the same time, for those that are expecting the spread to dis-invert and move back up towards zero, nearly every one of them also believe that the spread will actually inverts further. The boat is fully loaded to the side that the inversion will deepen and continue on forever. You know that is not going to happen. Note that each bottom where the blue hook patterns would begin forming start when the red Aroon line is at 100%, like now, so that pop higher last week may be the start of a bigger move higher towards dis-inversion and recession. 

The -50 bips is strong support so if that gives way the move lower to more inversion would be in play. There is a gap below at -54 bips to -65 bips that needs filled so the baby games may send her down there first to fill that gap then afterwards will be a solid move higher to dis-inversion and recession.

Simply use the -50 bips support, -28 to -29 bips resistance, and -13 bips resistance to determine the Winners and Losers going forward. Life's a gamble, and you might lose. Are you happy with all the choices that you made? Keystone does not have any trades on long or short Treasuries currently. 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, 7/2/24, at 4:39 AM EST: The 2-10 spread started to test the -28 to -29 bip resistance yesterday. That did not take long. Right now, the 2 is at 4.76% and the 10 is at 4.46% for a 2-10 spread (yield curve) at -30 bips. The drama begins.

Note Added Friday Morning, 7/12/24, at 9:36 AM EST: The 2-10 spread is up to -29 bips again testing the critical overhead resistance. The 2-year is at 4.49% and 10-year at 4.20%.

Note Added Monday Morning, 7/15/24, at 7:24 AM EST: The 2-10 spread is up to -22 bips punching up through the -28 to -29 resistance that now becomes support. The 2-year is at 4.45% and 10-year at 4.23%. The -13 bips resistance is next on tap, only 9 bips away, and that is for all the marbles because if the spread pops above -13, it will likely dis-invert completely going forward (move above zero turning positive with the 10-year yield higher than the 2-year). The hook pattern is holding and as the spread disinverts the recession will appear.

Note Added Wednesday Morning, 7/17/24, at 5:53 AM EST: The spread pulls back to back kiss the -28 to -29 bips support so it is bounce or die time. If she bounces, the -13 bips resistance is on tap and the spread is on its way to dis-inversion, and US recession. If she falls through the support, the spread will likely drop lower to -37 bips inverting further repeating the same story over the last couple years. This is a big test right now at -28 to -29 bips. 

Note Added Sunday Morning, 7/21/24: The back test continues with the spread at -27 bips. The 2-year is at 4.51% and 10-year at 4.24%. It is time to bounce or die.

Note Added Wednesday Morning, 7/24/24, at 4:50 AM EST: Bounce. The 2-10 spread rises to -20 bips so the -13 bips overhead resistance is likely the next target. If that gives way, the dis-inversion will be at hand which means the US recession begins. The 2-year is at 4.44% and 10-year at 4.24%. The 2-year yield drops so traders are buying the short duration with both fists.

Note Added Wednesday Morning, 7/24/24, at 7:38 AM EST: The yield curve rises to -19 bips with the 2-year at 4.42% and 10-year at 4.23%. Dis-inversion = recession.

Note Added Wednesday Morning, 7/24/24, at 8:21 AM EST: The yield curve rises to -18 bips with the 2-year at 4.41% and 10-year at 4.23%. 

Note Added Wednesday Morning, 7/24/24, at 9:01 AM EST: The yield curve rises to -18 bips with the 2-year at 4.40% and 10-year at 4.22%. The -13 bip resistance is only 5 clicks away.

Note Added Wednesday Morning, 7/24/24, at 9:55 AM EST: The yield curve rises to -17 bips with the 2-year at 4.41% and 10-year at 4.24%. 

Note Added Wednesday Morning, 7/24/24, at 10:45 AM EST: The yield curve rises to -16 bips with the 2-year at 4.38% and 10-year at 4.22%. The -13 bip resistance is only 3 clicks away.

Note Added Wednesday Afternoon, 7/24/24, at 3:30 PM EST: The yield curve rises to -13 bips with the 2-year at 4.41% and 10-year at 4.28%. That was fast. It is bounce (poke up through -13 bips to head higher towards zero and dis-inversion and of course, recession) or die time (fall back away form -13 bips moving down towards the -28 bip to -29 bip support once again delaying the recession). 

Note Added Wednesday Afternoon, 7/24/24, at 3:45 PM EST: The yield curve drops to -14 bips with the 2-year at 4.41% and 10-year at 4.27%. 

Note Added Wednesday Afternoon, 7/24/24, at 5:05 PM EST: The yield curve drops to -15 bips with the 2-year at 4.43% and 10-year at 4.28%. The -13 bips resistance holds on the first try but the challenge remains a coin-flip; it will play out over coming days. The US stock market sh*t the bed today. The SPX mini-crashes 129 points, -2.3%, to 5427. The Dow collapses 504 points, -1.3%, to 39854 below 40K. The Nazzy mini-crashes 655 points, -3.6%, to 17342. .The stock market sell-off cascades globally. Is a worldwide recession/depression on the come?

Note Added Thursday Morning, 7/25/24, at 3:00 AM EST: The yield curve rises to -12 bips with the 2-year at 4.37% and 10-year at 4.25%. The -13 bips resistance is pierced and now getting chipped-away. Note that stocks are sold off while yields move lower (bonds and notes are bought) so some of the money from the stock market sales flows into the perceived safety of US treasuries. These are investors thinking that growth is deteriorating and may be falling off a cliff.

Note Added Thursday Morning, 7/25/24, at 4:15 AM EST: The yield curve rises to -11 bips with the 2-year at 4.34% and 10-year at 4.23%. The US recession pokes its head out of the bushes, looking each way, thinking the coast may be clear to show its ugly face. Dis-inversion (zero) is only 11 bips away.

Note Added Thursday Morning, 7/25/24, at 6:24 AM EST: The yield curve is at -13 bips with the 2-year at 4.35% and 10-year at 4.22%. The 2-10 spread sits on top of the -13 bips S/R deciding to bounce, or dieThe recession hiding in the bushes is telling the spread to bounce towards dis-inversion.

Saturday, June 29, 2024

GOLD Daily Chart; H&S (Head and Shoulders) Pattern; Gaps



Here is a look at gold in the daily time frame. The H&S jumps out at you. The yellow metal was in orgy mode during March and April with the 2-leg bull flag playing out higher. The first leg is 2000 to 2190 a difference of 190. The sideways consolidation occurs (flag) with a slight downward bias, that looks good, then second leg begins at 2160 so upside target is 2350. It is achieved as gold exploded higher creating gaps that look like swiss cheese (blue circles).

The red lines show two neggie d spankdowns. Interestingly, there was no need for price to come back up for another high in May since the chart indicators were out of gas but it did; there must have been some hype news about something, or a weaker dollar. Price quickly fell again receiving the neggie d spankdown.

The H&S has a neckline at 2310 and head at 2440 so that is 130 difference. The downside target is 2180 (2310-130) if the 2310 neck gives way. There are several gaps that need filled on the way down to the 2180 target which is the consolidation area of that 2-leg bull flag on the way up.

The chart indicators are stumbling sideways, like price, not tipping its hand. If you bring up the weekly chart, it is ugly. The H&S has an ominous descending triangle look to it. Also, the chart indicators on the weekly chart are weak and bleak wanting price to be pulled lower on a weekly basis. This does not portend well for the daily chart and the H&S (it will likely fail).

Keystone does not own any gold ETF's or derivatives now long or short. If the neck fails for the H&S, you know where she's going. That sounds like an Eagles tune. She's goin' to the cheatin' side of town, and she can't hide those Lyin' Eyes. What a shame. City girl, there ain't no way to hide those lyin' eyes. 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, 7/2/24, at 4:43 AM EST: Gold 2339.

Note Added Saturday Morning, 7/13/24, at 6:48 AM EST: Gold floats higher to 2421 creating a potential triple top. On the gold weekly chart, price prints the matching high but all the chart indicators are negatively diverged so a multi-week down slide would be expected to start soon. There is some momo on the daily chart the last couple days and a guess at a top in gold would be next week. Note that price bounced off the H&S neckline refusing to fail into mayhem, for now. The current price action can be considered the right shoulder for the H&S so nothing has changed with the pattern explained above. The 2310 neckline remains the line in the sand. Gold bulls can party and have a good time as long as the yellow metal stays above 2310. If gold loses 2310, the party will turn ugly with drunken fights and the cops arriving with bright lights and sirens. In the week or two ahead, gold's trip top and H&S patterns will likely be resolved, either with price exploding higher nullifying the triple top and H&S, or, price collapsing into the abyss, through 2310, placing into motion the H&S downside target at 2180, and proving that triple tops do exist.

Note Added Saturday Morning, 7/17/24, at 6:00 AM EST: Gold flies higher to 2468 popping intraday to 2475 a record high. Gold bugs are high-fiving each other as the H&S pattern is nullified (price moves above the head). The 2310 neckline support held on 6/27/24 with gold printing 2306 and then popping now to 2475, a big +7.3% gain in only 12 trading days. The weekly chart remain in negative divergence so a top in gold will likely set up again in a couple weeks or so and bring in a multi-week move lower. Soundbites, the Fed and politics are driving the dollar, gold and other plays.

Note Added Sunday Morning, 7/21/24: Gold has an orgy party as Pope Powell hints at rate cuts coming catapulting to 2488.40 a record high. Gold bugs are throwing confetti and singing songs like Gold on the Ceiling. However, gold falls on its sword dropping to 2399. Bring up a weekly chart and the neggie d across all indicators is staring you in the face. What part of that don't you understand? Last week was the likely start of a neggie d spandown and start of a multi-week decline in gold. Powell speaks next week so he may save it, or stick a knife in it. The expectation is for a multi-week pullback in gold to begin. There is a juicy gap at 2250 that needs filled.

Note Added Monday, 7/22/24: Gold 2394.

SPX S&P 500 Monthly, Weekly, Daily and 2-Hour Charts; All-Time Record High SPX 5524; Overbot; Double-Top; Negative Divergence; Rising Wedge; Upper Band Violations; Potential Island Reversal; SPX Prints All-Time Record High at 5656 on 7/12/24







The task the last few days was to wait for the neggie d to set up in the charts so a top can be called. The red lines above show that negative divergence rules the day across all time frames. Stick a fork in it, it's cooked.

Stock trading is like playing multi-dimensional chess with the time frames the dimensions. This is why long or short calls on stocks by television evangelists are stupid and meaningless if they do not provide a time frame. That leaves the story-teller a way to weasel out of the call that is wrong by saying he was referencing a different time period. That is called baby games. The only reason analysts and money managers appear on television is for the publicity to attract money into their funds.

Conceivably, you can have the stock market bullish in the 2-hour time frame (very short-term; VST), bearish on the daily basis (short-term; ST), and bullish on the weekly basis (intermediate-term; IT), and bearish on the monthly basis (long-term; LT). That is why a person that makes a call on the market and in the same breath also identifies a time period for that call is a good analyst. He/she may be wrong but at least they had the guts to make a call on the market and not hide behind the ambiguity bush playing baby games.

Right now, as the charts above demonstrate, the US stock market is set up for the bears in the 2-hour, daily, weekly and monthly time frames. If you are holding stocks long, you are known as the bagholdin' sucka. Hi sucka. Every top needs sucka's.

The 2-hour shows universal negative divergence with price printing a new all-time record high at 5523.64, call it 5524, and then falling on its sword receiving the neggie d spankdown. The RSI and stochastics drop below 50% into bear territory and remain weak and bleak. The MACD and money flow are about to print lower lows.

The standard deviation bands are pulling in tight so a big move is expected and down may be the direction. The lower band remains on the table at 5446. The pink arrows show prior tight squeezes resulting in a down move in May and up move in June.

The potential island reversal pattern was previously mentioned and a palm tree remains on the island. The bulls kept the SPX elevated after the WWDC Apple and AI hype and Fed dovishness extending the length of the island that was formed due to the gap-up from 5375 to 5410. An island reversal pattern will occur if the SPX falters and sinks down to 5410, and then in a heartbeat, collapses back down through the gap to 5375. So that is something to watch for going forward. If the island reversal does not occur, price may simply trail lower and trail down through the gap, filling it, and then drifting ever lower.

Note how there is a big volume candlestick a week ago on the buy side as the hype was in full swing. Price sinks to the same price range area on Friday and the selling volume candlestick is the same amount as the buying volume candlestick showing that price is in a sideways funk and not thrilled about either direction with the bias favoring the bears.

On the SPX daily chart, same-o, same-o, you lame-o. Double-top, or M-top if you prefer, universal negative divergence across all indicators, and the RSI and stochastics coming off overbot conditions; are all bearish indications. Price needs a neggie d spankdown in the daily time frame as well as the 2-hour time frame.

Price has violated the upper band so the middle band, that is also the 20-day MA, at 5408, is on the table as well as the lower band at 5268 moving sharply higher. The SPX is above the moving average ribbon so a mean reversion lower is required.

Those are some big selling volume candlesticks over the last week. The blue circles show bigtime distribution occurring. Price shot up so Joe Sixpack, Jane Winedrinker and Carlos Bagholder run in to buy the market on the hype and the institutions are all too eager to slough-off shares to the sucka's. Those 2 blue circles show the smart money handing off shares to the dumb money.

On the SPX weekly chart, what do you see? Neggie d. I see a red door...., er, red chart.... Paint It, Black. I see the girls walk by in their summer clothes. Ooh-la-la. The red rising wedge pattern is more prominent on the weekly chart; this is a bearish pattern that shows price is spent when it makes it to the apex of the triangle, like now.

Again, the red lines show universal neggie d. Price moves higher but all the chart indicators that fuel the move higher are out of gas. There are not even any fumes remaining. On that last push higher due to WWDC and AI hype and Fed hype, the RSI came up but note how it is flat again and remains overbot and in negative divergence. It is beautiful stuff for bears and those shorting the market now.

Price violated the upper standard deviation band so the middle band, that is also the 20-wk MA, at 5215, is on the table and the lower band down at 4938. Two selling volume candlesticks this year are higher than all other volume candlesticks for the whole year and going back to December. In other words, the two biggest volume weeks for the US stock market over the last half-year are selloffs.

The last of the four charts is the monthly chart that is a long-term picture of the US stock market. It is also an ugly chart that walked into an ugly forest and bumped into every tree. The ramifications of this chart are huge since it is forecasting for months and a year or few. We could be looking at stock market prices at all-time record highs that may not be seen again for 5 or 10 years.

The red rising wedge is bearish. So is the universal negative divergence (red lines). The MACD line is trying to create some additional strength in the monthly time frame but it is muted by the ongoing neggie d over the last 2 years. Same-o with money flow. After the multi-week down move plays out going forward, stocks will bounce and rally in the weekly time frame. That is when you will see how much upside oomph remains on the monthly chart. There is not much.

The monthly chart either begins its long journey south now, with a multi-month down move starting, or, price will trail lower for a month, but then show buoyancy again for a month or so, then roll over and die for the multi-month move lower. The charts will tell you so there is no need to guess.

The upper band is violated so the middle band, that is also the 20-mth MA, at 4538, is on the table as well as the lower band at 3590. That would get everyone's attention. The 12-month MA at 4824 is one of the most important numbers in the stock market. If the SPX drops to 4824 and loses this support, the stock market will be in a crash profile from there forward.

What does all that mumbo-jumbo mean? It sounds like he's feeding us a lot of bull, or in this case, bear. All four of the time frames above are in negative divergence across all chart indicators (red lines) so a spankdown should begin in all time frames. The CPC put/call ratio is at 2-1/2 year lows signaling out of control uber bullish euphoria another indication of a significant stock market top. Sell, Mortimer, sell! Are you ready?

The 2-hour and daily chart will create weakness in stocks in the daily time frame and near-term (the week ahead). Once the weakness on the daily chart plays out, say a week or three down the road, simply watch the chart, and for positive divergence to form, and you will know a rally will occur in the daily time frame for a few days but that will roll over again and die since the multi-week down move is in progress (sell the rallies going forward). The charts will help you trade any time frame but obviously on the short side is where you want to be.

Keystone is holding index shorts now. The Keybot the Quant robot remains long the stock market but will likely want to flip short if the XLF loses 41.02 and the SPX falls below 5451 heading lower, so watch these two parameters like a hawk on Monday and Tuesday.

It is time for the bulls and bears to battle. The bears are bringing bazookas and firepower while the bulls have a pen knife to defend themselves. Time to rumble. Beat It.

That said, new money flows into the stock market at the start of a month and especially the start of a quarter and second half (Q3 and H2). This activity may extend the buoyancy in stocks for the first few days of July. It is also a goofy weak with July 4th Independence Day on Thursday so markets will be closed. Also of interest is the excessive window dressing that occurred in late June where every money manager had to buy NVDA, Mr Softy, and other tech and AI stocks to show these holdings on the quarterly statements going out to clients, but a lot that may be unwound in quick order as traders and investors cash-out and lock-in profits choosing to sit-out for a little bit and look to reload stocks at lower prices. Monday and Tuesday will be interesting days.

The stock market is going to be lots of fun going forward. That is, if you are a shark in the water. It will be interesting to see how fast a panic may set in once the neggie d kicks in. As usual, the Fed may save the day on Monday or King Jensen may show up with more AI hype and razzle-dazzle; he knows how to sell the sizzle and not the steak, and also sell the picks and shovels like the Gold Rush days.

The Fed has technicians chained to desks in the basement of the Eccles Building, they use the hidden entrance behind the full-grown arborvitae, so Fed Chairman Powell and his gang, and Treasury Secretary Yellen and her staff, know what is coming. The Fed is probably telling Jensen to start waving another black chip box in the air while also telling Cook to cook the books to save the stock market.

I love the smell of napalm in the morning; perhaps Monday morning. Apocalypse Now. Pull back your units, boys, get the Hell out of there, we're going to light it up. Bring in the air ships. You know, someday this stock market and the crony capitalism system, is going to end. 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, 7/2/24, at 4:46 AM EST: SPX 5475.

Note Added Wednesday Morning, 7/3/24, at 6:36 AM EST: Pope Powell brags that the improvements in inflation are "significant" hinting that cuts are likely coming sooner than most think. Let the orgy begin. The SPX pops 33 points with traders throwing confetti as dove Powell flies around the trading floor. New money for the new half and quarter, a dovish Fed, more AI hype, and the happy holiday tomorrow create lift in stocks. Banks remain elevated keeping stocks elevated. Bulls are trying to pump copper higher to extend the rally. The SPX closes at 5509.01, closing above 5.5K for the first time in history. The all-time high is 5523.64 on 6/28/24. America is off tomorrow and the Jobs Report is Friday morning, and trading volume will be more robust next week. Interestingly, the new moon peaks Friday and stocks are typically soggy moving through the new moon each month. Nothing has changed in the charts; neggie d still rules going forward.

Note Added Monday Morning, 7/8/24, at 7:33 AM EST: Stocks rally after the Jobs Report on Friday with the unemployment rate rising to 4.1%. Cuts are likely coming faster than most think so stocks rally last week; the holiday also helps to create joy. Bullish euphoria is over the top. More Americans are playing the stock market than ever before in history. Oppenheimer's Stoltzfus raises his SPX forecast to 5900. Evercore's Emmanuel predicts SPX 6K. CNBC commentator Jim Cramer tells traders to embrace Big Tech and their dominance in the stock market. Much of the recent behavior is reminiscent of the dotcom bubble in 1999-2000. It remains comical that 7 rate cuts were priced into stocks as the year started, then this went to zero cuts, but the stock market went higher anyway, and now with the path clear to cuts as the labor market rolls over, stocks go up again. It is Pavlov's economic dog that buys stocks every time the Fed hints at a rate cut regardless of the price level of the stock indexes. There must be 10 price cuts, or 2.5%, already priced-in to US stocks and not one has occurred as yet. It will be fun to watch going forward.

Note Added Tuesday Morning, 7/9/24, at 7:45 AM EST: Stocks rally on Monday sending the SPX to 5573 its 35th record high for the year. The bullish euphoria continues. The low CPC, CPCE and CPCI indexes verify the uber bullish euphoria these days with the Fed wine flowing like water. Only 10 stocks in the SPX account for nearly 30% of the index. That's hilarious. 10 years ago, those stocks accounted for only 14% of the index. CNBC commentator Jim Cramer proclaims big upside for stocks next month based on past history leading the bull bandwagon. Nine of the top 14 Wall Street investment banks and trading houses predict that the SPX will finish the year, less than 6 months away, above 5500 with Evercore at 6000, Oppenheimer at 5900 and RBC at 5700. Yardeni updates his SPX target to 5800 In other words, the Wall Street greed machine says stocks will continue rallying far higher, perhaps to a 6-handle on the SPX (an +8% gain above current levels), within the next 24 weeks. There is little talk of downside. Piper Sandler is no longer releasing end of year SPX targets saying the indexes are too disjointed due to the runaway tech/AI sector. No guts, no glory; Pied Piper babies. Pope Powell speaks to the US Senate today. The drama continues.

Note Added Saturday Morning, 7/13/24, at 7:00 AM EST: Pope Powell rode in on his pale green horse last week preventing the stock market from falling to protect his wealthy butt as well as his elite handlers. Isn't the crony capitalism system sickening? Fear not, it is on its last legs. The Powell orgy saves the day with the SPX catapulting higher from 5458 on 7/2/24 to an all-time record high in history at 5656 yesterday, a humongous +5% gain in only 7 days of trading. The Fed dovishiness already guaranteeing from 7 to 10 rate cuts going forward, along with the AI hype machine, continue sending stocks higher. Money managers are in heaven since it is also easier to slough-off shares to the young excited naive investors that serve as the bagholders. The behavior is similar to the dotcom bubble top. Let's take a look at the charts again to see what Powell and AI may have changed. On the SPX daily chart, price makes 3 matching highs for Wed, Thurs and Friday. Thus, the chart indicators can be assessed for neggie d to see if a top is in. Check. The RSI, MACD, histogram, stochastics and money flow are all negatively diverged and out of gas unable to push price higher in the daily time frame. The MACD is flat but that is the same as neggie d with price elevated. The money flow receives a boost late last week but remains far below prior levels and some of that joy is short-covering along with the Fed and AI hype machines. The selling volume for the down day on Thursday is substantively higher than the up days that bookend it (bearish). So the daily chart is topped-out again after the 1-1/2 weeks of July 4th holiday hype. If you bring up the 2-hour chart, price makes the new high on Friday with neggie d across all indicators and voila, the SPX is spanked down in the 2-hour time frame as witnessed on Friday afternoon. On the SPX weekly chart, it is easy to see the steady move higher over the last year in an organized machine-way. About 95% of the trading over the last year is performed by robots. Anyhoo, price makes the new record high and the RSI is flat, neggie d, and definitely neggie d since the last price peak in early April. Yinz may have better eyes than Keystone looking at that little RSI line. The MACD line is neggie d across the last 4 months but showing a little bit of lift over the last couple weeks as Pope Powell flies above Wall Street in his white dove costume dropping bundles of cash channeling prior Fed Chairman Bernanke that dropped money from helicopters (the Fed is leaning more towards starting rate cuts). Wall Street cheers Powell. Traders carry him around on their shoulders singing For He's A Jolly Good Fellow; he is the goose that lays the golden eggs for America's wealthy class that own stocks. The histogram, stochastics and money flow remain neggie d so the charts are reset for the top again now that the holiday is in the rearview mirror and the Fed and AI hype have worked through the system over the last 11 days. The week ahead should be lots of fun. Stock market bulls need good news and more AI and Fed dovish hype to keep the upside party going. Otherwise, without happy talk, stocks would be expected to roll over and begin a multi-week slide lower. Bank earnings are key since they will either initiate the downside in the stock market going forward, or, provide oxygen for the sick stock market patient allowing him to hang on for another week or two before topping-out on the weekly basis.

Note Added Tuesday, 7/16/24: SPX prints a new all-time record high at 5670.

Note Added Wednesday, 7/17/24: SPX 5588. The Powell, inflation data and jobs numbers euphoria over the last couple weeks appears to be priced-in.

Note Added Thursday, 7/18/24: SPX 5545.

Note Added Friday, 7/19/24: SPX 5505. LOD 5497. The SPX drops -3% in 3 days. The S&P 500 falls -1% for each of two days following the record high which has never happened before in the history of the stock market.

Note Added Wednesday Afternoon, 7/24/24, at 5:15 PM EST: The US stock market sh*t the bed today. The SPX mini-crashes 129 points, -2.3%, to 5427. The Dow collapses 504 points, -1.3%, to 39854 below 40K. The Nazzy mini-crashes 655 points, -3.6%, to 17342. .

CPC Put/Cal Ratio Daily Chart; Rampant Complacency Signals Significant Stock Market Top At Hand

A couple weeks ago, Keystone showed that first spike lower on the put/call ratio signaling rampant complacency and now a second move into this extreme bullish euphoria zone occurs. Typically, a top would have already occurred for the stock market and the downside would be in progress but these are not typical markets. Stocks remain buoyant as the Federal Reserve continues cooing dovishly promising future rate cuts as far as the eye can see and at the same time there is new AI (Absolute Insanity) hype news hitting the wires each day.

In general, you want to buy stocks when there is panic and fear (1.20+) and people running from the stock market with their hair on fire. That behavior marks a bottom. Conversely, like now, when there is rampant complacency and fearlessness (-0.80), the most bullish euphoria in 2-1/2 years, you want to sell stocks.

The fuse is lit on the ticking time bomb that is the US stock market. It's a shame that Grandma Juanita took her entire life savings, that she kept in a Maxwell House coffee can under her bed, to a broker and told him to buy NVDA stock. She expects to be filthy rich this time next year like all the talking heads on television told her. Every top needs the bag holders. Sucka's.

Take your profits folks. The US stock market is topping out and about to start a multi-week down move. If you keep holding on to your longs, Ka-Boom; it may be too late. 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.