Friday, January 31, 2014

Keystone's Morning Wake-Up and Midday Market Action 1/31/14; EOM; Consumer Sentiment; Chairman Bernanke's Final Day

The markets are fast-moving the last couple days limiting the time for commentary. Futures are taking the pipe this morning. Yesterday, the bulls launch a snap-back rally but the flat VIX hints that it was more of a dead-cat bounce. The dollar/yen dictates stock market direction (reference this morning's chart). The dollar/yen moves up to 102.70 and higher yesterday taking the stock market higher, and today, the dollar/yen is down to 102.16 so the stock market moves lower. The bullish sentiment continues in the market with analysts parading across the television screens this morning saying all is fine and the SPX will easily finish above 2K this year. The put/call ratios remain low indicating continued rampant complacency and lack of fear in the markets despite the -4% pull back.

Keybot the Quant flipped bullish yesterday and by the look of the futures may be whipsawed today. Strength in utilities with UTIL leaping to 502 created the market rally. Next week, the UTIL 506.57 level is a key bull-bear line in the sand. The bulls pushed utes higher to get a running start to push even higher today to move above 506.57. If UTIL is not above 506.57 at today's closing bell, this spells trouble for the bulls come Monday morning. Use this is a heads-up for next week. For today, the battle is between financials and commodities. The market bulls need XLF 21.44 and the market bears need GTX 4780. One of these will flinch and send markets in that respective direction. Of course with the futures deteriorating, UTIL and GTX may fail at the opening bell tumbling lower taking the stock market lower and perhaps whipsawing Keybot back to the short side. If the GTX falls under 4780, and the SPX under 1777, Keybot will likely flip short. Pay close attention to the SPX low prints as they occur today.

For the SPX starting at 1794, the bulls need to touch the 1799 handle to accelerate the upside, which looks very unlikely at this juncture. The bears need to push under 1777 to accelerate the downside. This is 17 handles lower, a formidable task, but the futures are making a run for this number. A move through 1778-1798 is sideways action. 
Key S/R is 183218281824.34 (20-day MA)1815.30 (200 EMA on 60-minute)1812.60 (50-day MA)1808-1810 (also the left shoulder of an H&S on the daily), 18061801-1803, 1796, 1793, 1791, 178817811778.88 (20-week MA)1772-1775 (neckline of a potential H&S), 1768.22 (100-day MA)17681763 and 1745. Many traders highlight 1765 or 1767 as a line in the sand. The 1770-1772 is likely more important support. If 1770-1772 fails, the 1768 and 1763 levels may simply be quick rest stops as price drops to 1745.

The new moon occurred yesterday afternoon and markets are typically weak moving through the new moon. Markets are usually bullish through the full moon, which was 1/15/14, and interestingly printed the market top. Therefore stay on guard for a short-term market bottom to print over the next day or three.

Chicago PMI is 9:45 AM shortly after trading begins. Markets will pivot at 10 AM on the Consumer Sentiment data. Chairman Bernanke's last day of work is today; he will likely be dancing out the back door as he throws the market monkey off his back. Unfortunately for new Fed Chair Yellen, the monkey taps her on the shoulder and climbs up on to her back to sit there for the coming years. Fed's Fisher talks at 1:15 PM. Farm Prices are 3 PM which will affect ag stocks and the GTX today.

Today may shape up as a buyable bottom for a countertrend long side play. The BPSPX sits at the 70% level which will signal much more extended and sustainable market downside ahead should it fail. Copper is collapsing and optimistic traders ignore this dire move. Weak copper means the two main drivers of the economy, housing and auto's, are much weaker than anyone thinks. Today is the EOM and January will print negative, the first down month since August and first negative January since 2010. The January Barometer does not predict an up stock market this year since January does not end positively.

Watch GTX 4780, XLF 21.44, UTIL 506.57, and SPX 1799 and 1777 to determine market direction. Futures are S&P -18. Dow -168. Nasdaq -17. The SPX will make a run to 1777 to begin the session. The damage will be minimal and a recovery should result if 1777 holds. If 1777 fails, a move into the 1760's is next and then potentially 1740's. The 200-day MA, which has not been shown respect for over one-year's time, is 1705.29 and rising.

Updating some of the recent trading, Keystone took profits on the NUGT long and RTH short exiting the trades. Will look to reenter both. The dangerous SPXL was bot to play the upside countertrend market move. Keystone is also now long MCP and JCP. JCP took the pipe yesterday collapsing -8% on three times volume, perhaps a capitulatory move where the last of the bulls have finally given up (typically when a stock recovers).

There are many interesting potential trades. The copper collapse should result in at least a dead-cat bounce so FCX may have potential as a long. Biotechs continue flying high but are likely continuing to set up as shorts. MYL is an attractive short. Keystone is in MYL getting beat up on the short side currently. CLF has a high short interest and the chart is setting up with positive divergence so it will likely see one of its obscene spikes higher that is prone to occur. SLV and NVGS may be a couple of other long possibilities.

Note Added 12:16 PM: The markets exhibit more drama than a group of teenage girls. GTX failed the 4780 level ushering in market weakness. Utilities are strong since the bulls know they must push UTIL above 506.57 by the closing bell today; otherwise, there will be h*ll to pay come Monday morning. UTIL is now printing 506.41 attacking this important 506.57 resistance level in play all of next week. Isn't it amazing that Keybot can identify these numbers before they occur? The SPX dropped under 1777 down to a LOD at 1772.26 but could not punch down through the 1770-1772 support gauntlet. Equities recover as the day moves along. The dollar/yen fell to 102.00 so the stock market drops; then the dollar/yen recovers to 102.30 so the stock market pops. The BOJ and Fed control the markets. Keybot the Quant remains long, for now. If the SPX drops under 1772.26 and remains under today, Keybot will likely flip short. Pay attention to GTX 4780, UTIL 506.57 and SPX 1722.26. The broad indexes remain tricky and can go either way today and Monday. The bulls will be happy and receive the nod for next week with UTIL 506.57 and higher. The bears will celebrate all weekend long if UTIL stays under 506.57 and GTX under 4780. Use these two parameters as a measure of whether to be bullish or bearish moving forward. Markets are very erratic and unstable. Higher volatility is causing the larger and larger, and more violent, price swings. Keystone bot FCX after the opening bell and may take it as a day trade today. Also added more SPXL for the countertrend upside move.

Note Added 12:34 PM: UTIL 506.57. You have to love it. Utes are likely going to point the way forward. Which way will they choose?

Note Added 3:02 PM: UTIL 506.57, isn't that special? The markets are keeping everyone guessing. UTIL may not tip its hand until the final one-half hour of trading. Keystone took profits on SPXL (playing the snap-back rally side) exiting the position, will look to reenter, perhaps before the close if UTIL moves above 506.57. Also took profits on FCX as a day trade; will look to reenter. Also added more MYL shorts.

Note Added 3:37 PM: The bulls are having trouble keeping UTIL elevated, price now at 506.08 and fading, however, watch to see how near to 506.57 the closing print is, since if it ends only a few pennies away, it would be easy for bulls to push it above come Monday morning. The tricky business continues. Keystone took profits on JO. Coffee remains a fave trade for 2014; will look to reenter. Bot SPXL reopening this long trade to play a countertrend snap-back rally. Bot CLF, a very risky iron ore company opening a new long trade.

Note Added 4:16 PM: The day ends with UTIL 506.26 so the bears are happy campers come Monday morning. The bulls will boost their energy levels this weekend and show up Monday to try and push 31 cents higher above the critical UTIL 506.57 which remains in play all week long. The dollar/yen is 102.12. Say no more. The move from 102.30 back down to 102.12 creates the stock market weakness late day. Simply follow the dollar/yen for market direction. The markets are in a churn and this chops up both short and long side players if you do not tip toe through the wreckage like Jack be Nimble. The January Barometer says 'as January goes, so goes the markets', however, it is really more of a bull-only indicator. If January is up, the stock market is up about 80% of the time for the year. If January is down, however, like this year, the stock market is actually a 50/50 proposition for the year. So the bears have a slight edge but do not receive a ringing endorsement like the bulls would receive if they would have finished the month positive. On the coffee trade metioned, it only apples to the commodity itself, via JO or CAFE, not the garbage stocks such as GMCR, SBUX and DNKN. Keystone bot MGPHF, a penny stock involved in graphene. This is a long positoin that is a long term buy and hold, LTBH, simply putting it on the back burner and forgetting about it. Like Ron Popiel says, "set it and forget it." All trades are risky. The company is involved in graphite and graphene; perhaps a material much in demand in the future. Jimmy Rogers, the commodity guru, is involved in this. As always, anything can go to zero and you can lose all your money, however, this graphene idea may have substance. YouTube has videos. IBM is building a graphene chip. It needs a lot of due diligence but for now, the position serves as a placeholder and it will probably be added to over time and sit in the background and simmer. Remember that funds cannot typically buy penny stocks (stocks under $5) so MGPHF will not receive support from the big boys in its early current days. Like in the Graduate movie, upon graduation, Ben (Dustin Hoffman) was given advice about a career, he was told just one word, "one word, plastics." Perhaps an updated version of the movie would say, "one word, graphene." That was an intense week for trading. Time for a slice of blueberry pie to ponder the situation. The Hungary, Turkey, Ukraine and Russia confluence, that neck of the woods, is worrisome.

XJY Japanese Yen Daily Chart

The Fed and BOJ control the stock market as illustrated in many ways at this site over the last few months. The main driver of the higher stock market is the weaker yenWeaker yen = higher dollar/yen = higher stock market. Stronger yen = lower dollar/yen = lower stock market. The BOJ's monetary policies weaken the yen just like the Fed's policies weaken the dollar. This liquidity pumps the stock market higher so the rich become richer.

The bottom was called in the yen at the end of December due to the falling wedge, oversold conditions and positive divergence, and the bounce occurred as expected. The stronger yen creates the equity selling in January. Remember, 95% plus of the analysts and traders on Wall Street called for a continued drop in the yen sub 95. What does that tell you? Price is moving up through an expansion pattern. The Nikkei dropped overnight and futures are weak this morning due to the dollar/yen dropping (yen moving higher). The chart is not yet updated for today's print. It will be at the brown line at 98-ish trying to create a matching or higher high as the long and strong MACD line desires.

The indicators are negatively diverging so this up move in the yen should stall and allow the stock market bulls to run a few days. The RSI is not yet overbot but the yen may pull back before the overbot conditions occur. If the RSI moves up to overbot now, that would coincide with the yen moving up to 99+ and the stock markets will be selling off in force.

The blue lines show an inverted H&S targeting 100-ish. If the yen weakens again to regroup lower, say down to the lower trend line, this would create a new right shoulder for the brown inverted H&S that will target 101+. The pink oval shows the tight bands that squeezed out the up move in the yen (just like the SPX squeezing out the down move since equities move inversely to the XJY).

Projection is for a slow steady sideways to sideways upward bias move in the yen as the year plays out. This will frustrate traders that are long Japan and US stock markets. In the near-term, however, the yen will top out in the day or days, or week or so ahead, and drop to regroup which will allow the stock market to recover higher. Overall, the stock market should continue to trend sideways to sideways lower this year as the weekly charts continue indicating. If the stock market drops today, this would likely be a good place to enter a quickie long trade for a day or few as a countertrend play. 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, January 30, 2014

SPX 2-Hour Chart

The green lines show the falling wedge, oversold stochastics and positive divergence that create the rally today. The indicators are long and strong, sans the RSI that flattened over the last couple hours, so higher highs in prices are desired after any pull backs in this 2-hour candlestick time frame. Taking a wild guess and projecting a rising wedge would bring price higher to test the important 1808-1810 resistance as well as the 50-day MA at 1812.67. Price can pull back to 1791, even the sturdy 1788 support, and still maintain the proposed rising wedge pattern.

Looks like the bulls have a more juice for the recovery rally. If 2 to 4 candlesticks are needed, at a minimum, to top price out and roll it over again, this is about 4 to 8 hours of trading time which can easily take equities into lunch time tomorrow, even into the weekend. The daily and weekly SPX charts remain weak overall so further market weakness would be expected after a day or three bounce.

Key S/R is 183218281824.52 (20-day MA)1815.73 (200 EMA on 60-minute)1812.67 (50-day MA)1808-1810 (also the left shoulder of H&S), 18061801-1803, 1796, 1793, 1791, 178817811778.97 (20-week MA)1772-17751768.24 (100-day MA)17681763 and 1745. Price is now fighting along the 1796 S/R. 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 Daily Chart H&S Pattern

The market drama continues. Markets rally strongly today but the indicators hint that the move may be more of a dead-cat bounce. Traders remain complacent and bullish despite the -4% market sell off so the dip buyers create buoyancy. The thick blue lines show a potential head and shoulders (H&S) pattern forming that needs a right shoulder. The head at 1850-ish, and neck at 1772-1775 targets 1690-1700 as a landing zone if the 1772-ish neck line fails.

The tight standard deviation bands squeezed out the wicked downside move (yellow lines). Since price has violated the lower band with the selling this week, a move to the middle band, the 20-day MA at 1824.52, would be in order, at a minimum. Both the 20-day and the 50-day MA at 1812.67 will require back kisses moving forward. Note how the 20-day and 50-day are converging and this confluence creates a target area for the potential right shoulder to play out.

Key S/R is 1832, 1828, 1824.52 (20-day MA)1815.73 (200 EMA on 60-minute), 1812.67 (50-day MA)1808-1810 (also the left shoulder of H&S), 1806, 1801-1803, 1796, 1793, 1791, 1788, 1781, 1778.97 (20-week MA), 1772-1775, 1768.24 (100-day MA)1768, 1763 and 1745. Meshing the moving average targets mentioned, a potential upside target for the right shoulder is 1808-1828, a strong resistance gauntlet. Since price has moved up through the 1796 R, a move to 1801-1803 is a reasonable expectation. Price is now fighting at the November market top at 1798-1799.

The RSI never reached oversold and the positive divergence (short green bar) is a cheesy bottom. The MACD line continues lower wanting to see further lows after any bounce. The month has taken a beating so typically this will create bullishness for the last couple days of the month, despite the new moon negativity on tap in a few hours and the seasonal weakness expected to end the last couple days of January. Pay attention to XLF 21.44 since it likely dictates if the rally has upside legs, or not. Projection is a move higher to place a right shoulder, perhaps in the 1808-1828 zone, then roll over to the downside again with the neckline failure occurring and the selling continuing as the days and weeks play out. 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

Keystone's algo, Keybot the Quant, flips bullish at SPX 1791 a short time ago. Utilities pump the markets higher today. As always, stay alert for a whipsaw, especially if UTIL falls back down through 496.05 and/or 494.92 or GTX dropping under 4780. More information is found at Keybot's site;

Keybot the Quant

Wednesday, January 29, 2014

JCP JC Penney Daily Chart Oversold Falling Wedge Positive Divergence

Every few months one of these come along. Remember the Netflix bottom when everyone claimed it was going bankrupt? How about Best Buy that was proclaimed dead last year and it was one of the best performers? There are a few other examples. With JCP, it has been nothing but beatings, and the beatings will continue until moral improves. Moral should improve moving forward. The daily and weekly charts are set up or setting up with positive divergence. The chart above shows how price dropped down to prior lows but look at how much less the indicators have moved down. The negativity is getting rung out of the stock.

Considering the shorts in the stock, any launch move off the positive divergence and falling wedge may provide strong upside gusto with a robust short-covering rally. Price may stumble sideways for a few more days or weeks but the bottom appears to be in or very very near for JC Penney. Despite all the problems and Ron Johnson trying to destroy the once-loved retailer with all his fanciful ideas, the stores appear to be holding up well. Clerks appear friendly and optimistic rather than waiting around for the demise of the company.

Note the gap at 7.7-8.2 that creates the island that price now sits on. In the weeks ahead, price may jump from 7.7 back up through the gap to 8.2 and higher to create an island reversal pattern, but that may be a little ways away. First thing is first so watch to see if the falling wedge and positive divergence creates the launch in the very short term. JCP should move sideways to sideways up for the remainder of the year. Perhaps JCP will be a positive story this year once the autumn rolls around again. Keystone just bot JCP today opening a new long position. 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.

UTIL Utilities 1-Minute Chart

Lots of drama with utilities today. The robots are in control ahead of the Fed. The algo's all have the 15-week look back and 50-week MA programmed and that is exactly where the price movement occurs. Markets are idling ahead of the 2 PM EST Fed decision only a couple hours away as lunch time approaches on the East Coast. Watch UTIL 496.05 and UTIL 494.90. UTIL is now printing 495.46.

Bulls win above UTIL 496.05 and will send the SPX to 1800+. Bears win below UTIL 494.90 and will send the SPX to a 1772 failure and lower. Price keeps teasing each side. Note the zig-zag pattern. One or the other side will win and take the broad markets in that direction. 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 12:16 PM: Simply amazing. UTIL drops to 494.90 and when it looks like failure, instead launches to the upside straight to 496.05 in 13 minutes time, then spanked down again to 495.77. What does this tell you? Stakes are high and the winner is identified by either 496.05 for bulls, or 494.90 for bears. Fed now less than two hours away.

Note Added 12:48 PM: UTIL moves above 496.05 and the bulls are holding it higher at 496.81. This provides the bulls the nod. SPX is sitting at 1781 support. The action is interesting considering the Fed backdrop. The Fed decision is only about one hour away.

Note Added 1:09 PM:  Wheeeee. Spectacular wild roller coaster action. UTIL collapses from above 496 to below 495 in only 5 minutes time. The 494.90 fails, however, price recovers now and moves through the neutral sideways zone again at 495.40. It's a toss-up.  Looks like the Fed decision will choose the winner today.

Note Added 1:59 PM:  Fed decision imminent. UTIL is exactly at 494.90.... 494.63 ... 494.68...

Note Added 2:16 PM: Fed decision is to continue the $10 billion per month taper so the $85 billion per month dropped to $75 for January and now for February the ongoing QE will be at $65 billion. This was expected. Fed did not want to make waves. Now Chair Yellen takes command moving forward and Bernanke joins Greenspan at the fishing hole. UTIL remains under 494.90 giving the bears the nod. Markets would be expected to sell off into the close as long as the 494.90 trap-door remains open. Dollar/yen loses 102.

Tuesday, January 28, 2014

Keystone's Morning Wake-Up 1/28/14; Consumer Confidence

As highlighted on the weekend charts and the SPX S/R missive, three key support and resistance levels are in play; 1788, 1781 and 1772-1775. Price played around at each of these levels yesterday and then closed at the 1781 support. Further technical damage occurs since the COMPQ (Nasdaq) and RUT small caps both lost their 50-day MA's, thus, all the major indexes are now below the 50-day MA's, a very bearish indication. Usually after a large down move, the following day is a sideways day with a downward bias, like yesterday, providing time to digest the move. Same thing on the upside. Typically a large up day will be followed by a sideways day with an upward bias.

The price candlesticks for SPX and Dow show a bull-bear fight yesterday ending in a draw with price closing in the middle of the day's range. The Nasdaq and RUT candlesticks, however, show price closing more in the lower half of the candlestick showing that the bears were a bit more in control. AAPL laid an egg last evening and is hurting the tech sector today. iPhone sales are only 51 million when everyone expected 58 million. Apple missed the boat with the screen size. Folks want less expensive phones with a larger screen size rather than a skinny screen.

The SPX hourly and minute charts are setting up with positive divergence as highlighted yesterday so a near-term bottom would be anticipated for a potential quickie long play. The SPX daily and weekly charts remain extremely weak, however, so further downside is anticipated for the weeks ahead overall. President Obama speaks tonight so a market bounce may occur due to proposed new spending for companies as well as optimism moving into the Fed decision tomorrow afternoonChairman Bernanke's stint at the Fed ends in a few short days and the decision tomorrow afternoon is his last swan song so he will likely not want to make any waves. Chair Yellen will now drive the bus.

The 100-day MA is 1764.24 and rising. The 20-week MA is 1778.25. The 200 EMA on the 60-minute is 1821.68. Keybot the Quant is short. The bears are cruising. To stop the selling, the bulls need either UTIL 494.90 or GTX 4780. The bears need SOX 522.40 to create another broad market down leg. For the SPX at 1781, the bulls need to touch the 1796 handle an upside acceleration will occur to send price back above 1800. The S&P futures are +9 but the bulls will need a bit more than that. The bears need to push under 1773 to accelerate the downside and since the important 1772-1775 would be lost, markets will be in far more serious trouble.

The BPSPX is on a market sell signal (reference the chart from a day or so ago). Interestingly, the CPCE drops to 0.53 continuing to show the ongoing complacency in markets. Even with the market drop off the top of -3.7% for the SPX, traders are sanguine about the move and have little fear of any substantial move lower from here. Bears salivate at this behavior since it hints at a slow and steady drip south for markets over time.

Durable Goods Orders are released at 8:30 AM. Case-Shiller House Price Index after that. The Richmond Fed Mfg Index is 10 AM but most importantly, Consumer Confidence hits at 10 AM and will create a market pivot point. The 2-Year Note Auction is 1 PM. The 2-10 spread has dropped to 242 basis points making the bankers sad that hoped for a steeper yield curve.

Watch UTIL 494.90, GTX 4780, SOX 522.40, and SPX 1796 and 1773 to determine market direction. Perhaps equities will find a near-term bottom (due to possie d on hourly and weekly charts) and move higher into the Fed tomorrow afternoon but the utilities, commodities and semiconductors will point the way. If UTIL, GTX and SOX remain status quo, markets will likely float along sideways all day. Monitor the 1796, 1788, 1781 and 1772-1775 support and resistance levels. In general, bulls win big above 1796. Bears win big under 1772-1773

TNX 10-Year Treasury Note Yield Daily Chart

The red lines showing the overbot conditions, rising wedges and negative divergence created the spank downs in early September and early January as forecasted. Ditto the positive divergence bottom although it was a cheesy bottom without the RSI becoming oversold and the MACD line likely wanted further weakness in late October. For the ongoing drop in yield for this year, yield is moving lower into the blue falling wedge. The indicators are weak and bleak wanting lower yields after any bounce occurs. The positive divergence in the stochastics creates the lift right now with yield up to 2.78% at this writing.

The fractal from September and October may play out again so watch the pink boxes. Back then, yield fell through the 50-day MA and then came back up to back test, and fail. A repeat of the fractal would send yield higher from the current 2.78% print towards 2.80%-2.85%, and then failure leading to lower lows. Yield likely has a lot of sideways ahead. The TNX weekly chart also created the spank down to begin the year with its negative divergence. The 20-week MA is 2.76%. Yield is trying to hold this important support level. If the 2.75%-ish level fails, yield likely wants to venture to 2.5%-2.6%.

In the near-term, a few days forward, yield is likely to move sideways through 2.75%-2.85% and then roll over to the downside again moving towards 2.5%-2.6%. A bottom may be placed for a more substantive bounce from 2.50%-2.65% but a move higher for yield will be challenged here on out. As the weeks and months play out, yield will likely stagger sideways through 2.4%-2.8%, perhaps for the whole year forward. The door must remain open for a potential move to 2.1%-2.4% range if 2.5%-ish fails. 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.

Sunday, January 26, 2014

Keystone's Weekend Reconnaissance 1/26/14; CAT

CAT earnings will set the market tone for Monday. Of course the Asian and European markets will provide insight as well as the currency markets considering the ongoing Turkish Lira and Argentine Peso trouble, as well as other emerging country currencies (South African Rand). Of course pay attention to the yen. Stronger yen = lower dollar/yen = lower equities. Weaker yen = higher dollar/yen = higher equities. On top of all this drama is the ongoing violence in Egypt, Turkey, Syria, Libya Ukraine, Brazil, Thailand, everywhere you look people are protesting and growing increasingly violent. Some are frustrated at their governments. Some are frustrated at the wealthy that created the financial meltdown five years ago and are now all wealthier than ever while everyone else is left holding the bag. This class separation is worrisome for the globe moving forward and also the US where most people probably think social unrest and protests on a violent level could never happen. They are sadly mistaken.

The bears performed some technical damage to the markets last week. The Dow and SPX lost the 50-day MA's but the RUT and Nasdaq have not. The 8 MA is under the 34 MA on the SPX 30-minute chart, and the SPX is under the 200 EMA on the 60-minute chart, both signaling bearish markets for the hours and days ahead. Keybot the Quant remains bearish. For the SPX starting at 1790, the bears only need to see a smidge of red in the futures and price will likely visit the 1821 support at a minimum. There are 3 key support areas below in this direct area; 1788, 1781 and 1772-1775. The SPX may bounce off one of these three support levels to create a recovery rally. The SPX is down 60 handles off the 1850 top. A move through 1791-1826 is sideways action for Monday.

The breakdown in utilities on Friday afternoon created the market mayhem into the closing bell. Watch UTIL 494.50 and 496.05. UTIL begins with a 491 handle causing market negativity. The bulls desperately need UTIL above 494.50 to stop the market selling. If the bears keep UTIL under 494.50, the markets have lots of downside ahead. The bulls will also try to push GTX above 4780 to stop the market selling. Bears need SOX under 522 to create another strong down leg for the broad markets. The CPC and CPCE put/call ratios and the VIX are heading higher indicating that fear and worry is increasing so these tools will be useful in identifying a near-term market bottom. Reference the charts this weekend for further color.

New Home Sales are released at 10 AM and may create a market pivot point. Dallas Fed Mfg Survey will provide insight into the manufacturing sector at 10:30 AM. Traders will try to start to front run the president's speech and there should be active trading this week in solar, coal, natty gas and energy stocks. In a nutshell, to begin the week, the bulls need UTIL 494.50 or GTX 4780 and they can breathe a sigh of relief since they can stop the market slide. The bears need a smidge of red in the futures to accelerate equities lower tomorrow and also the SOX under 522. If UTIL stays under 494.50, the bulls are in big trouble moving forward. UTIL 494.50, GTX 4780 and SOX 522 dictate market direction. Will the CAT pounce higher and help stop the market slide, or, cough up a hairball and create further negativity?

Note Added 6:15 PM:  Ukraine violence continues and the situation appears to be worsening. For the futures, the S&P's are -3.5, Dow -37 and Nasdaq -7.5. Dollar/yen is 102.03 so lower dollar/yen = stronger yen = lower equities. Asia markets are beginning in a downbeat mood. The S&P's are set up for the bears in the morning but the opening bell is a long way off and lots can happen overnight. The week is only now beginning.

Note Added 6:19 PM: S&P -5. Dow -50. Nasdaq -9. The 10-year yield is 2.72%. 2-year yield 0.34%. This places the 2-10 spread at 238 well under the 255 level and higher the banks need to be happy with a steepening yield curve. Therefore, the banks are sad. Copper is weak. The pressure mounts for the CAT earnings.

Note Added 7:50 AM on 1/27/14: Asian markets are bludgeoned playing catch up to the US sell off. The Nikkei drops -2.5% to play catch-up despite the weaker yen. The dollar/yen moves higher all night long from 102 now up to 102.90. Banzai! The higher dollar/yen, due to the BOJ weakening the yen, sends the futures strongly higher. S&P +9. Dow +63. Nasdaq +11. CAT earnings deliver the happy news today. Earnings beat on top and bottom lines which would bounce the stock a couple percent or so higher, however, the magical 'buyback' word is mentioned so a rocket is launched. Caterpillar announces a $10 billion stock repurchase program catapulting CAT +7% towards 92. Companies do not take cash and spend on equipment or new employees. Instead, the cash, and the Fed's easy money, are used to fund the obscene buybacks which sends the stock price strongly higher making the wealthy wealthier. Everyone that was told ahead of time that the buyback would be announced went long and now they are thinking about what to do with all their winnings as the little guy continues to hold the economic bag. CAT improves the market mood this morning. The currencies are of great interest including Turish lira, Argentine peso, South African rand and several others. The Turkey central bank calls an emergency meeting so the lira tries to stabilize knowing that further banker intervention is on the way.

SPX 60-Minute Chart 200 EMA Cross

The SPX fell through the 200 EMA on the 1-hour chart signaling bearish markets for the hours and days ahead. Note how the bulls held the line mid-January and prevented the failure, but now, the bulls folded like a cheap suit as price fell through the 200 EMA (red circle). The indicators are weak and bleak wanting to see lower lows after any bounce occurs. The stochastics are firmly oversold wanting to see at least a dead cat bounce occur now. Since the indicators are weak and bleak, the assumption is that from one to four candlesticks would be needed to print to properly place a bottom and create positive divergence for a recovery rally. This would be 1 to 4 hours of trading time, so much of the Monday session.

Since the chart wants lower lows after any initial bounce, there are three key support levels in this area; 1788, 1781 and 1772-1775, so one of these three areas is a logical support level where a bounce should set up probably during Monday's session. A back kiss to the 200 EMA will be needed at some point and that is moving flatish across 1824. As long as the SPX stays under the 200 EMA, the bears are in full control of the markets and will maintain selling pressure.

President Obama speaks Tuesday evening and the Fed is on tap for Wednesday so this typically creates market bullishness, so Tuesday and Wednesday may be bull-friendly. The Fed decision is Wednesday afternoon where a market pivot will occur. The new moon peaks about one hour before the closing bell on Thursday and markets are typically bearish moving through the new moon. The month ends on Friday and January tends to finish weak the last couple of days. Thus, taking the seasonality factors in account only, and building a background mosaic for market movement, would be down Monday, up Tuesday and Wednesday, possible move lower at the Wednesday afternoon pivot, or a peak on Thursday morning, then lower into the Thursday close and then lower on Friday. Of course, the multitude of ongoing events will dictate market behavior and CAT earnings in the morning will set the mood to begin the week. The failure of the 200 EMA is a big deal and provides the bears a huge feather for their caps. 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.

CAT Caterpillar Weekly Chart Sideways Symmetrical Triangle

CAT is the warm-up band for AAPL tomorrow. Caterpillar reports before the opening bell and Apple reports after the closing bell. Both bellwethers will greatly impact the broad indexes. CAT is a global bellwether and a direct read on the health of the Chinese economy, or lack thereof. The decision is at hand. The sideways triangles are over two years old. The tension is building. One month ago, price popped out the top side so the bulls thought the go signal was declared, however, the spurt was short lived as negative divergence immediately formed and smacked price lower. The weak China data and outlook created market negativity last week.

Let's call the pivot area 83-86. The move out of the triangle will be epic. An upside break out indicates that China is far better off than anyone thinks, orders are robust, earth movers and other equipment are needed since the global economy is running on all cylinders, or, a downside break down occurs indicating that China is far worse than anyone thought, orders for machinery are down indicating a slowing construction market, and overall, the global economy is far weaker than anyone thought. The thick red line is about 30 handles and blue about 50 handles adding to the drama. An upside breakout targets 115-135. A collapse from the triangle targets 35-55.

The idea is that the economy, especially China, is slowing so the direction would be down but it remains a toss-up. The chart is not tipping its hand. CAT earnings in the morning will set the mood for the markets. Price, the apexes of the sideways triangles, the flat moving averages, all converge to this confluence at 83-86. The bears have the upper hand from a macro and fundie view since even if a healthy beat occurs, CAT may lower guidance in light of China's slowdown. The bulls will try to treat the pull back as a simple back kiss of the trend lines and will try to start the upside move.

CAT may simply drift through the sideways channels at 75-92 or 75-97 for the whole year. CAT's forward guidance in the morning is key since if it disappoints, then the broad market will be disappointed moving forward, if happy, markets will be happy. CAT will be on stage in the morning. Will they receive a standing ovation or will they be pelted by tomatoes? 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 9:09 AM on 1/27/14:  CAT beat handily on earnings but most importantly announces a $10 billion buyback so it catapults over +7% higher to well over 92. Interestingly, the 92 is that exact overhead brown resistance line. With a new high in the short term, monitor the indicators to see if negative divergence forms again, or not. CAT may be following the move in NFLX which catapulted higher on earnings and may now roll back over to the downside. Caterpillar is a key global bellwether so the happiness should help emerging markets recover although oddly the company is basing future growth prospects more on the developed markets. The CAT earnings create optimism and improve the market mood this Monday morning.

INDU Dow Industrials and TRAN Dow Transportation Indexes Daily Charts Dow Theory Non-Confirmation

The green dots rise and print new highs in the Fall, the industrials move higher, the trannies move higher, the trannies move higher, the Dow moves higher. It was one big party and Dow Theory said all systems go into the end of the year so a toast can be made at new years. Well, that's when the party ends. The Dow moves south for a month not confirming the trannies moving higher. Higher airline stocks and railroads helped keep trannies buoyant and moving higher. KSU earnings were weak, however, and airlines are rolling over, so the party in transports is ending.

There are many different versions on how to account for Dow Theory but keeping things simple, the Dow did not confirm the new high in the Transports in January. This non-confirmation leads to a sell off. Watch the red circle areas to see if the bears start to string together lower lows moving forward, and begin confirming in the down direction rather than upside direction. 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.

NFLX Netflix Weekly Chart Negative Divergence Fibonacci Retracements

Netflix was given a reprieve when earnings blew out even the most optimistic estimates. The red overbot, rising wedge and negative divergence spank down occurred as expected but the earnings beat sent price higher again. If long, take it as a gift and exit. Nothing has changed. NFLX can be shorted moving forward. Note that price made another new high off the hype, but the maroon lines show the serious lack of oomph and enthusiasm in place (negative divergence). Thus, another spank down should occur and this time earnings will not be there to pump the price. Watch the 20-week MA at 341 on the way down.

A loss of the 330-ish support would send price to 260-290. This is the same level as the 38% Fib retracement for the move from sub 70 up to 390. The 260-ish area would not be surprising for Netflix this year. Keystone called the bottom in NFLX at Labor Day in 2012 when everyone said it was a piece of garbage and would be bankrupt in a few weeks. Price launched off the possie d and never looked back. Now price is at nose-bleed levels so high a hawk just flew by at this lofty elevation. The neggie d says time for the downside ahead as everyone says Netflix is the best company in existence. What do you think is going to happen to NFLX moving forward? Projection is sideways to sideways lower for the weeks and months to come. Take the money and run. Keystone does not hold a position in NFLX 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.

AAPL Apple Weekly Chart Sideways Channels

Activist investor Carl Icahn is buying up shares in Apple the last two days, adding to an existing position. Icahn always creates buoyancy in stocks since traders think companies will be split and sold off to unlock value, thus higher stock price, or in general believe the company is healthy since his lieutenants tell him to go long. Icahn likely has a whole room, or floor of a building, full of chartists. The bullishness and enthusiasm for Apple, however, is likely misplaced. Either the chartists told Icahn the truth and he ignored it, or the chartists are looking at a different chart than Keystone. Apple is big drama tomorrow since earnings hit after the closing bell at 4 PM EST.

Looking back, the red rising wedge in 2012 was a textbook top that Keystone called. If you remember, the bullishness for Apple was off the charts back then. Once 700 was violated the 1000 and higher price targets started to appear and then, collapse. The chart illustrates how dramatic the drops out of rising wedges can be; for AAPL it results in a drop from 705 to 380, -46%. The green falling wedge and positive divergence creates the move back up that was highlighted last year as it occurred. Over the last few months the idea was to wait for price to top out in the new red rising wedge, which it has for the most part.

With earnings on tap, a huge upside move has to be left on the table. However, if long the stock, any bounce up towards the 580 ceiling should be sold and considered a gift. Actually any pop off earnings above 550 should likely be sold. The MACD line is trying to squeeze out a bit more upside juice but overall, the chart is setting up weak. A downward channel is taking hold with lower lows and lower highs. Note the stochastics printing a lower low. This acts as a weight on price like a man trying to climb a ladder but someone is pulling on his foot. Eventually the climber gets tired and falls.

The 62% Fibonacci retracement of the big drop from 705 to 380 results in a resistance level at 560-565, adding street cred to the 560-580 area as a sturdy ceiling. Thus, the idea would be to short AAPL here forward. A pop on earnings would be a gift to short. The 580 ceiling should hold. A short position can likely be initiated before the earnings. (Remember all trades are highly speculative.) Projection is for price to move sideways to sideways lower moving forward through the 440-580 channel. Apple may line out through the sideways channel for the remainder of the year, or, lower under 400 as the year plays out. A drop under 530 likely leads to 480. It will be a circus tomorrow at 4 PM EST. Icahn is going to look silly when AAPL drifts lower this year. His chartists are now updating their resumes since heads will roll when the boss looks bad. Keystone does not have a position in AAPL 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 8:37 AM on 1/28/14: AAPL reports earnings last evening, Monday evening, and beats on EPS, beats but barely on top line but most importantly, sells only 51 million iPhones when 58 million in sales were expected. In the AH's, AAPL collapsed -7%, losing about 39 bucks to 512.

VIX Volatility Weekly Chart

Some fear finally appears in the markets with the elevated volatility. The VIX jumped +46% last week and price pokes above the upper trend line. The real test is the 200-week MA at 19.37. Note how 4 of the market bottoms (green circles) occurred as soon as the 200-week was tapped. Thus, the stage is set for another dramatic test. VIX remains bull-friendly for more than two years. The indicators are ready to call a base now and prefer to see sideways to sideways higher moving forward. Watch the 200-week MA to see if dip-buyers come into the equity markets. If not, and the market selling continues, the VIX will explore the higher resistance levels. A break up through 27 opens the door to far higher VIX numbers representative of a broad market in free fall.

For now, simply use the 200-week MA as a guide to see if the bears got game this time, or, if they fold like a cheap suit, crumbling back from the 200-week MA with the markets in a recovery rally. The chart hints that the bears intend to growl and move above the 200-week MA going forward. This information is for educational and entertainment purposes only.  Do not invest based on anything you read or view here.  Consult your financial advisor before making any investment decision.

UTIIL Utilities Weekly Chart

Markets are in trouble and the stakes are high. The late day market collapse on Friday occurred because of the drop in utilities. There are two key numbers you always want to reference the 50-week MA and the closing price 15 weeks ago. These two numbers either confirm an ongoing broad market rally, or they don't. The weekly uptrend has turned into a weekly downtrend. If price falls below both of these two key levels, it is as if a trap-door is opened and sustainable weakness in equities would be expected moving forward.

The 50-week MA is 494.45 but since price is a few ticks under use the 494.50 level as the guide (the moving average will rise slightly as price rises). The 15-week look back number for the new week ahead is 496.05. Thus, the fate of the markets are determined by UTIL 494.50 and 496.05, and on Friday, price failed, and closed at 491.96. This is at the top rail of the sideways symmetrical triangle which holds epic ramifications for markets. If price breaks out higher from the triangle at 492, the target is 550-570. Wow. If price breaks out lower at 483, the target is 400-420. Equally wow. The RSI and money flow never reached oversold territory so after multiple years it is time to likely show the lower bounds some respect.

If utilities move higher, it will aid a market recovery rally. Watch UTIL closely at the opening bell. If price moves above 494.50, the market bulls are in business, the downside bleeding will stop, and a recovery rally begins. Bulls will pull a handkerchief from their pocket and dab the beads of sweat off the forehead knowing that the worst is over. If price stays under 494.50, equities will continue moving lower in earnest which will set up the 483-ish level for a bounce, or die decision, going forward. This information is for educational and entertainment purposes only.  Do not invest based on anything you read or view here.  Consult your financial advisor before making any investment decision.

Daily Chronology of Global Markets and World Economics

The Daily Chronology of Global Markets and World Economics is now posted on the Keystone the Scribe blog. The market action on Thursday and Friday is very interesting and should be reviewed to understand the undercurrent of the markets. Keystone the Scribe's site is;

Keystone the Scribe

Here are the latest current events for Sunday;

Global violence continues. The US, Germany, France and other Euro nations urge President Yanukovich to bring calm to Kiev, otherwise, trade and Euro zone economics may be negatively affected. Russia warns the west to not interfere with the Ukraine. 300 tourists take ill with stomach flu aboard a Royal Caribbean Cruises ship. RCL may puke tomorrow morning. France’s Hollande splits from his long time companion and First Lady Valerie Trierweiler choosing the young film actress Julie Gayet instead who will now accompany him as he performs political duties. Perhaps Hollande can now focus more on France’s economic problems rather than his love life.

The FBI, SEC and other government regulators continue to target the large banks such as BAC and others concerning market manipulation, price fixing and other nefarious behavior in the commodities, currency and futures markets. Michaels Stores is investigating possible fraudulent activity with customer card accounts a la the Target and Nieman-Marcus problems. China voices concern over the US imposing duties on solar panels and products. The protectionism wars continue to rumble and develop. Each country tries to protect its interests as the global economy falters and in the end, everyone is dragged lower. President Obama’s State of the Union speech is Tuesday night and his words will greatly affect solar, natty gas, coal and energy stocks.

MCP Molycorp Weekly and Daily Charts Falling Wedges Gap

Molycorp is a rare-earth miner and very volatile and speculative. You can wake up on any given day and these stocks can be 20% higher or 20% lower. The weekly chart shows the long term beating continuing creating a price move down through the falling wedges. Positive divergence creates the base in November-December but price bumped its head up against the top rail of the wedges and failed. The circle shows where another matching low in price would likely result in positive divergence remaining so it is very likely that MCP is basing on a longer term basis moving forward.

The daily chart is in a sharp falling wedge pattern which points to the open gap at 4.8-5.0. The 50-day MA is 5.03 so bulls would like to hold this level. Stochastics and money flow are agreeable to a bounce but after the bounce the RSI and MACD wants to see another matching or lower low. The rare-earths should be in demand for many years forward so MCP should have a future even if the sector is extremely volatile. The blue lines show how price now sits on an island so in the future weeks or months price may come up to 6-ish and leap higher to 7 and above to create an island reversal, but that is likely a ways off in the distance.

Keystone opened a long position in MCP on Friday. Perhaps a bounce will occur now, just above the gap fill, and may take price to the thin upper rail of the falling wedge at 5.25-ish. The indicators are weak and bleak as mentioned above so price will likely want to come back down to fill the gap, then the 4.75-5.00 area creates a firm bottom for the weeks and months ahead. So, in an ideal world, the trade would be a bounce now to 5.25, where the trade would be exited, then MCP would not be played from the short side, then the long side can be reloaded and played again from 4.8-4.9 which should be a firm bottom. If price drops from 5, the long position can be added to at 4.8, and even 4.2 but it should not drop to that extent. The anticipation is that 4.75-ish should hold as a bottom for MCP moving forward. A nice near-term move now would be a bounce off the 50-day and for price to move up to back kiss the 20-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.

CPC and CPCE Put/Call Ratio Daily Charts

The complacency finally gives way to a tinge of fear. No one is jumping from windows as yet but several traders walked over to see if the window can be unlatched. The VIX spiked higher which verifies the put/call ratios where traders are starting to wake up and realize that markets can actually go down. That said, President Obama will pump the markets mid-week after his Tuesday night State of the Union speech, and the Fed is on tap Wednesday, so they will be pumping the stock market. The put/calls are now up to where the cheesy market bottoms have occurred during the autumn period. Thus, another cheesy bottom may occur allowing markets to recover near-term.

The complacency has been ongoing for many weeks and months so traders will continue to drink the Koolaid. The Dow is down more than -4% off the top and the SPX about -3% off the top not even half-way towards the -10% level that identifies a market correction. Since the complacency has been so obscene, for months, with folks blindly buying the long side with zero fear or worry, a more substantive move towards fear and panic would be anticipated going forward.

Nibbling on the long side for a quickie snap-back rally trade may be prudent once the CPC moves to 1.15, 1.20, and higher, and/or, the CPCE moving above 0.75 and higher, but overall, the expectation is for the broad indexes to drift sideways to sideways lower as the weeks move forward. The put/call ratios may have identified a multi-year market top as has been discussed here for the last couple months. The next couple months are key. 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.

BPSPX Daily Chart Provides Bear Signal

The BPSPX reversed course and issued a market sell signal on Friday. The BPSPX is a two-pronged tool. First, if price moves above 70%, that indicates healthy bullish times and the wine is flowing like water. When the BPSPX drops below 70, that will indicate extended bearish markets moving forward--until the chart is explored on the bottom side at 35 and lower to identify a recovery. BPSPX has remained above 70 for many months and the wind is coming out of the sales.

Second, watch for the six percentage-point reversals. This verifies market direction and locks that direction on course for an extended move going forward. The big May selloff was verfied as June began and the SPX lost another 60 points. The June bottom occurs and the bull signal registers in early July which paved the way to the early August market top. The bulls received the most recent market buy signal in mid-October and since then the SPX ran from 1725 to 1850. Note how the bears started to push lower in December and created about a five percentage-point drop but that fell short of receiving a sell signal. Hence, the SPX ran higher into the end of the year. As of Friday, the bears finally receive the market sell signal with price now down almost 9 handles off the top (84 to 75).

Watch to see if the BPSPX falls through the 75 support (thin blue line), or not. If 75 fails, price will attack the critical 70 level where a bounce or die would occur like the June bottom. The bears have the ball moving forward. From this level at 75.60, the bulls would need to print 81.60 to receive the market buy signal again. If BPSPX drops under 70, the broad indexes will be moving sideways to sideways lower for many weeks and months ahead. This information is for educational and entertainment purposes only.  Do not invest based on anything you read or view here.  Consult your financial advisor before making any investment decision.

Saturday, January 25, 2014

SPX Daily Chart Rising Wedge Triple Top Negative Divergence Tight Bands Squeeze Lower

The neggie d spank down occurs. Remember a few days ago when both the weekly and daily charts were agreeing with neggie d across all indicators--that is something you do not want to fade, and that was 60 handles ago. The same would be true if both the weekly and daily charts, of any index, stock or sector, are positively diverged. You would not want to be short that stock since a launch would be at hand. The collapses from rising wedges can be quite dramatic; the chart above shows the initial drop late last week from the blue rising wedge. The strong squeeze move expected from the tight standard deviation bands (gold ovals) occurs and it turns out to be down.

The brown lines show key S/R levels at 1851, 1848, 1843, 18401841, 1828-1832, 1818, 1808-1810, 1806, 1801-1803, 1796, 1788, 1781, 1772-1775, 1768, 1762-1763 and 1745. A perfect place for price to bounce would have been the 50-day MA at 1812.52 which was also strong support and the November and December tops, but, alas, price collapsed through like a hot knife through butter, very bearish behavior. The 1788 support is holding to begin the new week of trading. The small red circles show the triple top that printed resulting in the smack down.

The indicators are all weak and bleak, sans money flow that has not yet printed a lower low, but this hints that lower lows in price are desired after a bounce occurs. Usually, at least a dead cat bounce occurs after a big drop like Friday, so Monday may provide a dip. If so, it will be interesting to see if the dip-buyers run in to buy like 2013. Sometimes the first dip that may occur is not the one to buy but instead the second dip. The 1772-1775 area would be a nice place for price to bounce from.

The selling volume is robust but note that volume was higher in this same price area during December, so the bulls can place a tiny feather in their caps. There are also two gaps above, at 1843 and 1828, that will need filled some day. Projection is for sideways to sideways lower moving forward. Watch for H&S patterns to form. 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 Weekly Chart Rising Wedges Overbot Negative Divergence

The neggie d spank down occurs; it took a couple extra weeks to roll over. Price fell out of the red rising wedge but remains at the bottom rail of the maroon wedge. The 20-week MA is 1773.57 and price is very close, so out of respect price should at least touch. The last time the 20-week was tapped was in September, 4 months ago. The 1773-1775 support area is very important since the SPX would move far lower if this important level failed.

The red lines show the negative divergence that created the smack down and note that the RSI, MACD line and stochastics are printing lower lows, weak and bleak, wanting to see lower lows in price even after any bounce would occur. The collapse from the red rising wedge was dramatic, as is typically expected. Just think how dramatic the drop from the maroon rising wedge would be. Projection is for sideways to sideways lower for the weeks ahead. Since the 20-week MA has held since late 2012, over one year ago, a failure of the 20-week now will likely send price to 1700-ish. 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 Support, Resistance (S/R), Moving Averages and Other Important Levels for Trading the Week of 1/27/14

SPX support, resistance (S/R), moving averages and other important levels are provided for trading the week of 1/27/14. The EOM is Friday and the SPX is currently about 60 points under where January, and the year, began, so the bears may finally log a down month. The monthly charts will be worth a look next weekend. The SPX drops under the psychological 1800 level and also the 50-day MA at 1812.52. The SPX decided to take a rest and sit at the strong 1788 support this weekend.

Note the confluence of support at 1772-1775 with the October tops, very strong horizontal support and the 20-week MA at 1773.57 all inside this tight range. The 100-day MA at 1762.83 is between the 1762 support and strong 1763 support, therefore, the 1762-1763 level is another confluence. Thus, if price decides to keep going lower, this will first occur by losing 1788, then 1781, then 1772-1775, then 1768, then 1762-1763 which would open the door to 1745.

Off the top, price left gaps at the 1843 and 1828 levels so price will want to fill the gaps some day in the future. If the Sunday evening S&P futures are only a smidge negative, price will want to drop to at least 1781 on Monday. The bulls need to push up through 1796, then 1801-1803 to mount a comeback rally. A back kiss of the 50-day MA at 1812.52 will be needed as time moves along. The resistance levels for the way back up are 1796, 1801-1803, 1806, 1808-1810 and 1813 would send price into the 1820's

1851 (1/15/14 All-Time Intraday High: 1850.84) (1/15/14 Intraday High for 2014: 1850.84)
1849.31 Previous Week’s High
1849 (12/31/13 Intraday High Top for 2013: 1849.44)
1848.36 January and 2014 Begins Here
1848 (1/15/14 All-Time Closing High: 1848.38) (1/15/14 Closing High for 2014: 1848.38) (12/31/13 Closing High for 2013: 1848.36)
1835.86 (20-day MA)
1826.96 Friday HOD
1824.33 (200 EMA on 60-Minute Chart a Keystone Market Turn Signal)
1814 (11/29/13 Intraday Top: 1813.55)
1812.52 (50-day MA)
1812 (12/9/13 Intraday Top: 1811.52)
1808 (12/9/13 Closing Top: 1808.37)
1807 (11/27/13 Closing Top: 1807.23)
1799 (11/18/13 Intraday Top: 1798.82)
1798 (11/15/13 Closing Top: 1798.18)
1790.29 Friday Close – Monday Starts Here
1790.29 Friday LOD
1790.29 Previous Week’s Low
1775 (10/30/13 Intraday Top: 1775.22)
1773.57 (20-week MA)
1772 (10/29/13 Closing Top: 1771.95)
1762.83 (100-day MA)
1733 (10/17/13 and 1018/13 Gap-Up: 1733.15-1736.72)
1730 (9/19/13 Intraday Top: 1729.86)
1728.75 (150-day MA; the Slope is a Keystone Cyclical Signal)
1726 (9/18/13 Closing Top: 1725.52)
1710 (8/2/13 Intraday Top: 1709.67)
1703.58 (10-month MA; a major market warning signal)
1701.12 (200-day MA; not tested for 1 year extremely odd behavior)
1687 (5/22/13 Intraday Top: 1687.18)
1678.24 (50-week MA)
1676.64 (12-month MA; a Keystone Cyclical Signal) (the cliff)
1669 (5/21/13 Closing Top: 1669.16)
1593 (4/12/13 Intraday Top: 1593.30)
1576 (10/11/07 Intraday Top: 1576.09)
1565 (10/9/07 Intraday Top: 1565.15)
1560 (6/24/13 Intraday Bottom)
1553 (10/31/07 Top: 1552.76) (3/24/00 Top: 1552.87)
1528 (3/24/00 Closing Top: 1527.46)
1524 (12/11/07 Top: 1523.57)