Keystone's Signal Summary for Current Equity Markets 11/26/12

Time to take a step back from the market circus to see which way the signals are forecasting.  The Market Turn and Cyclical Market Signal pages on this site are continuously updated and can be accessed via the links on the right. There are very short-term (VST), short-term (ST), intermediate-term (IT) and long-term (LT) time frames. This is why it is never acceptable to say you are bullish, or bearish, without identifying the time frame.  Markets may be bearish ST, bullish IT and bearish LT, all at the same time, or a multitude of other combinations. Think of VST as day-trading, and hours and days of trading. ST is days and weeks. IT is weeks and months.  LT investing is months and years.

Keystone's SPX 30-Minute Chart with 8 MA and 34 MA Cross Indicator. Bullish. The 8 MA is above the 34 MA so the bulls are in charge for the hours and days ahead. This indicator is very useful for trading in the VST, hours and days, time frame.

Keystone's SPX 60-Minute Chart with 200 EMA Cross Indicator. Bullish. The SPX is above the 200 EMA signaling bullishness for the hours, days, perhaps a week or three ahead, VST and ST. Bears need to immediately reverse this signal or they will feel pain moving forward.

Keystone's SPX:VIX Ratio Indicator. Crash Signal Alert. The ratio is at elevated levels verifying the markets bullishness but the move under 68 will trigger a Crash Signal where a large market move down may commence. At a minimum, when the ratio drops under 68, that day, the Dow Industrials would be expected to drop from 100 to 300 points. ST and IT.

Keystone's SPXA150R Indicator. Neutral. The indicator fell under 80 indicating that the bulk of the bull party has ended. Bulls need to regain the 80 level while bears simply need to keep pushing the indicator lower down towards 25. The indicator identified the market top at 9/17/12. ST and IT.

Keystone's SPX 150-day MA Slope Indicator. Bullish. However, it dipped into bear territory during the recent selling, but recovered, and the moving average does appear to be flattening and turning over, now at an inflection point, so this could turn bearish any day. ST, IT and LT.

Keystone's SPX Weekly MACD Zero Line. Bullish. However, the MACD is dropping now and approaching a cross of the zero line which would turn this IT and LT indicator bearish at any time.

Keystone's NYA 40-Week MA Cross Indicator. Bullish.  However, it failed into bear territory during the recent selling and only recovered over the last few days. Watch it closely; this and the SPX 12-Month MA Cross are the most important IT and LT signals.

Keystone's UPS Weekly Chart 20 MA and 50 MA Cross Indicator. Bearish. Shipping is a key global economic indicator and points the way for the broad indexes over the IT and LT.

Keystone's SPX Monthly Chart with 12 MA Cross Indicator. Bullish.  However, it failed into bear territory during the recent selling and only recovered over the last few days. Watch it closely; this and the NYA 40-Week MA Cross are the most important IT and LT signals.

Keystone's SPX Monthly MACD Cross Indicator. Bullish. However, the MACD lines are very close to crossing to a negative profile.

And, of course, Keybot the Quant, now Bullish (continuously displayed in the upper left margin).  Keybot is Keystone's proprietary algorithm that took a decade to develop and is another very effective gauge of market status, both real-time and for the days and weeks time frame as it oscillates from bull to bear and back to bull again, over and over.  The algo most closely relates to the ST time frame. For now, the bulls are driving the Keybot bus.

As seen above, the bulls are happy coming into the new week of trading but many of the signals above are not overly enthusiastic for the upside. Pay close attention to the 30-minute and 60-minute charts for the top two indicators today and tomorrow.