SPX 60-Minute Chart 200 EMA Cross

The SPX remains under the 200 EMA on the 60-minute at 1985.97 signaling bearish markets for the hours and days ahead, however, the bulls are running higher and want to regain control. The HOD is 1984.21 only one point away. The 1985-1986 area is formidable resistance and the 1985-1988 zone is a strong resistance gauntlet. Bulls win big above 1986-1988. Bears win if price stays under 1985. The SPX is currently printing 1983.

The bulls do not want let the bears shine and know if the 200 EMA resistance is taken out to the upside the bears will crumble and a relief rally will be in full gear. The battle lines are drawn at 1985-1986 and specifically 1986. The indicators are long and strong so a few more upside candlesticks are desired in the 2-hour time frame which may maintain market buoyancy today and tomorrow. Looks like an intense fight may be planned for the 1985-1988 S/R battle zone. Bears must maintain price under 1986 or the bulls are going to take the ball away. This information is for educational and entertainment purposes only. Do not invest based on anything you read or view here. Consult your financial advisor before making any investment decision.

Note Added 11:33 AM: The SPX prints a HOD at 1985.17. The drama and market theatrics continue. Watch the BPSPX 70 level, the 50-day MA at 1977, the 200 EMA on the 60-minute at 1986 and the 1985-1988 resistance ceiling as the key gauges for market direction. VIX drops to 15.20 which provides bull fuel. Interestingly, however, the TRIN is 1.38 well above 1.00 and favoring bears despite the stock market moving higher.

Note Added 11:49 AM: Markets are psycho today coming off the highs with SPX now at 1980. Note how the bond market remains calm, the adult in the room, with the 10-year motoring along sideways at 2.49%. The SPX will likely make additional runs at the 1985-1988 resistance gauntlet.

VIX Volatility Weekly Chart

The green circles clearly show the creation of stock market bottoms since fear and panic peaks. Overall, the bulls continue a long near six-year stock market party and volatility has crashed lower into this sideways low trend through 11-14 for a couple years. The low VIX creates the stock market lift. Former Fed Chairman Bernanke would keep his foot on the neck of volatility to keep the stock market elevated and his boot is now replaced with current Fed Chair Yellen's high heel.

The VIX is trying its best to run higher but it is tough odds with the Fed and other central bankers dropping money from helicopters. The significant market bottoms over the last two years were created when the VIX printed in the 18-22 range. The VIX HOD yesterday is 17.08 the highest since the prior high which identified the August stock market bottom. The VIX did not yet touch the 200-week MA at 17.48 which would be expected; and higher volatility means lower stocks.

The 5-1/2 year rally is record-making and very long in the tooth. The safe play for long traders is to simply continue staying away from the stock market and wait until the VIX prints at 21 and higher and only then you can start nibbling on some long positions that are on your shopping list. At VIX 21 and higher you can be far more comfortable you are receiving decent entry points for the long side on an intermediate and long term basis. Until then, cash is a good position. If the VIX moves above 17.50 start to stay on guard for a market bottom.

The S&P futures are higher this morning so the VIX will likely drop lower remaining in the 15's so the thinking would be that the bears will growl again after any market buoyancy occurs today and/or tomorrow. The stock market can place a near-term bottom today and use the VIX 17.08 as the market bottom, however, this is a very cheesy bottom and a higher VIX, at least above 17.50 would be anticipated before a firm bottom can be established. The central bankers are in control, however, so a few dovish comments could easily create a stock market bottom in the near-term such as today.

The expectation is that more market selling will occur and a higher VIX will print before a near-term bottom occurs. Use the BPSPX as a guide. As long as BPSPX stays under 70 the VIX should continue higher. If BPSPX moves above 70 the near-term stock market bottom is in and the VIX will likely collapse through the 15's, the 14's, the 13's and even down into the 12's. This information is for educational and entertainment purposes only. Do not invest based on anything you read or view here. Consult your financial advisor before making any investment decision.

Note Added 11:40 AM: VIX drops to 15.33 at the opening bell to send stocks higher. Then the VIX runs higher to 16.41 at 10 AM so the stock market prints at the lows. Then the VIX collapses to 15.20 sending stocks to the intraday highs.

BPSPX S&P 500 Bullish Percent Index Double Market Sell Signal

We watched the six percentage-point reversal occur in July indicating that there was trouble in paradise. A six percentage point reversal receives either a market buy or market sell signal depending on the direction that price moves. Once that occurs, the key 70% level must be monitored since the double whammy signal occurs which locks-in that respective direction forward. The bears are on the market sell signal as the BPSPX continued to drop towards 70. The failure at the key 70 level looked like a done-deal but the bulls saved the day in early August creating a market rally. Actually, President Putin requested peace talks and was playing nice in Ukraine which created the early August market bottom.

The BPSPX climbed to 76 and was only pennies from receiving the six percentage-point reversal to place the bulls in firm control, however, the bears come in and slap the bulls in the face and the BPSPX collapses. Yesterday the BPSPX loses 70 to receive the double whammy market sell signal. Equities will continue lower and would be expected to take a strong leg lower as long as the BPSPX stays below 70. Bulls can recover if they move price above 70. Under 70 and markets are expected to fall down the rabbit hole. 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 30-Minute Chart 8/34 MA Cross Downward-Sloping Channels

The 8 MA moves above the 34 MA on the 30-minute signaling bullish markets for the hours ahead, however, the 8 MA is moving sideways only marginally above the 34 MA showing that the bulls and bears continue to fight. The 8 MA will curl down wards for a potential negative cross as long as the price stays under 1978 and moves lower. The SPX is below the 200 EMA on the 60-minute chart at 1986.64 signaling bearish markets for the hours and days ahead. Either the 30-minute chart above or the 60-minute chart will flinch to confirm the market direction forward. The 1985-1988 resistance level is a formidable gauntlet and a very important bull-bear battleground area.

The indicators above are moving sideways. Watch the 50% levels for RSI and stochastics to see if price is leaning bullish or bearish (both are currently sub 50% preferring to see further weakness ahead). The downward-sloping red channels are in play. The SPX S/R highlighted this morning in the previous missive are 1985-1986, 1976.72 (50-day MA), 1973, 1966 (last week's lows), 1963 and 1960-1961. Price bounced from the LOD at 1964. Watch the 8/34 cross to see who wins 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.

Note Added 11:13 AM: The SPX is fighting along the 50-day MA at 1976.72 and must make a bounce or die decision. If price overcomes the 50-day MA a move to test the strong overhead resistance at 1985-1986 is likely on tap.

Note Added 11:16 AM: Bounce. The SPX pierces up through the 50-day MA; see if it can hold above for 7 to 10 minutes, if so, then price will likely settle in sideways today and float towards the 1985-1986 resistance. Bears need to spank price back under the 50-day MA immediately.

Note Added 11:26 AM: SPX 1979. Dollar/yen 109.36. The battle continues. Bulls win above the strong 1985-1988 resistance. Bears win under the 50-day MA support at 1977. Price bumped its head up against the upper red trend line at 1979-1980 printing the HOD at 1979.95. Bulls and bears are both drama queens as the market theatrics continue.

Note Added 11:28 AM: BPSPX loses the 70% level to 69 for a double whammy sell signal. Scroll back to the BPSPX chart several days ago or type 'BPSPX' in the search box at the fight to bring up the prior charts for further study. Bad things will happen to the equity markets including another strong leg lower if BPSPX stays under 70.

Note Added 6:24 AM on Tuesday, 9/30/14: The BPSPX ends at 68.80 a very negative market signal. The bears receive the market sell signal reversing the BPSPX by six percentage-points at the end of July so you knew market weakness was on tap. Yesterday the 70% level is lost which creates a double whammy sell signal. Markets will tumble down the rabbit hole here forward--as long as the BPSPX remains under 70. Watch BPSPX closely the remainder of the week since it tells you the market answer moving forward. The SPX ends yesterday at 1977-1978, at the 50-day MA, so the bears threatened to create a flush lower but did not have the juice. S&P futures are +7 before the Tuesday opening bell. Watch the 50-day MA at 1976.75. Bulls must push BPSPX above 70 or they will fall down the stairs. The 8 MA remains above the 34 MA on the 30-minute chart signaling bullish markets for the hours ahead. The SPX is under the 200 EMA on the 60-minute chart at 1986.16 signaling bearish markets for the hours and days ahead. One of these is wrong and one will flinch providing the market answer ahead. Watch the 1986.16 level like a hawk; bulls win above 1986; bears win below 1986.

SPX Support, Resistance (S/R), Moving Averages and Other Important Levels for Trading the Week of 9/29/14

SPX (S&P 500) support, resistance (S/R), moving averages and other important levels are provided for trading the week of 9/29/14. Levels shown in bold are strong resistance and support. Bold and underlined levels are very strong and important S/R. The SPX all-time intraday high is 2019.26 on 9/19/14 and the SPX all-time closing high is 2011.17 on 9/18/14. The bears are fighting back against the perpetual central banker easy money.

For today with the SPX starting at 1983, the bulls need to move above 1986 to create an upside acceleration that will quickly target 1991. The bears need to push under the 1966 low from Friday and last week to accelerate the downside. S&P futures are down -13 as this is typed one-half hour before the opening bell which would target the 1970-ish level for the SPX. A move through 1967-1985 is sideways action to begin the new week of trading.

The drop projected for the opening bell targets the support at the 50-day MA at 1976.76 and also the strong support at 1973. These two levels can be used as a guide to gauge the power of the down move, or lack thereof. The overhead resistance at 1985-1988 is a strong, sturdy and important ceiling. Just as it was important and bear-friendly when this level failed, especially the 1985-1986 level (was support now resistance), the bulls can only regain their mojo if they move back above 1985-1988 so monitor this level closely. There are only two days remaining in the month that began at 2003.37 so this level must be respected early in the week. September is set to print a negative month unless the bulls can overcome 1985-1988 R and make a run higher. Watch 1977, 1973, 1966 and 1960-1961 support levels. Losing last week's lows at 1966 will create ugliness for the week ahead.

2019 (9/19/14 All-Time Intraday High: 2019.26) (9/19/14 Intraday High for 2014: 2019.26)

2013

2012

2011 (9/18/14 All-Time Closing High: 2011.36) (9/18/14 Closing High for 2014: 2011.36) (9/4/14 Intraday High: 2011.17)

2010

2009.08 Previous Week’s High

2009

2007 (9/5/14 Closing High: 2007.71)

2006

2005 (8/26/14 Intraday High: 2005.04)

2004

2003 (8/29/14 Closing High: 2003.37)

2003.37 September Begins Here

2002

1999

1998

1997

1995.55 (20-day MA)

1995

1993

1991 (7/24/14 Intraday Top: 1991.39)

1988 (7/24/14 Closing High: 1987.98)

1986.95 (200 EMA on 60-Minute Chart a Keystone Market Turn Signal)

1986.37 Friday HOD

1986 (7/3/14 Intraday Top: 1985.59)

1985 (7/3/14 Closing High: 1985.44)

1983

1982.65 Friday Close – Monday Starts Here

1982

1980

1978

1976.76 (50-day MA)

1976

1973

1970

1968 (6/24/14 Intraday Top: 1968.17)

1966.22 Friday LOD

1965.99 Previous Week’s Low

1964

1963 (6/20/14 Closing High: 1962.87)

1961

1960.55 (20-week MA)

1960

1959

1958

1956 (6/9/14 Intraday Top: 1955.55)

1955.65 (100-day MA)

1951 (6/9/14 Closing High: 1951.27)

1949

1947

1942

1940

1937

1936

1931

1929

1928

1925.13 (150-day MA; the Slope is a Keystone Cyclical Signal)

1925

1924 (5/30/14 Intraday Top: 1924.03) (5/13/14 Closing High: 1923.57)

1923

1920

1917

1912

1910

1907

1904.74 (10-month MA; a major market warning signal)

1902 (5/13/14 Intraday Top: 1902.17)

1901

1897.66 (200-day MA; not tested for 22 months extremely odd behavior)

1897 (5/13/14 Closing High: 1897.45) (4/4/14 Intraday Top: 1897.28)

1894

1891 (4/2/14 Closing High: 1890.90)

1889

1886

1885

1884.14 (12-month MA; a Keystone Cyclical Signal) (the cliff)

1884 (3/21/14 Intraday Top: 1883.97) (3/7/14 Intraday Top: 1883.57)

1882

1880

1879

1878.50 (50-week MA)

1878 (3/7/14 Closing High: 1878.04)

1877

1874

1872

1871

1868

1867

1865

1862

1859

1855

1853

1852

1851 (1/15/14 Intraday Top: 1850.84)

1849 (12/31/13 Intraday High Top for 2013: 1849.44)

1848.36 Trading for 2014 Begins Here

1848 (1/15/14 Closing High: 1848.38) (12/31/13 Closing High for 2013: 1848.36)

1846

1845

1843

1842

1841

1840

1839

1838

1837

Note Added 10:57 AM:  The SPX drops to the 1964 support listed above and bounces. So the critical lows at 1966 hold on the first attack. Price recovers as the Fed POMO pump kicks into gear between 10 AM and 11 AM as usual. The central bankers are the market. The 1973 S/R and 50-day MA at 1976.69 are playing an important role in today's price action.

FVX 5-Year Treasury Note Yield Weekly Chart Rising Wedge or Ascending Triangle

Just as there is a fine line between love and hate, or victory and defeat, there is also a fine line between a rising wedge and ascending triangle. The red rising wedge pattern is bearish while the ascending triangle is bullish. Typically, a rising wedge will show an upper trend line that clearly slopes higher. For the 5-year yield chart above, the top trend lines are very near each other and flatter in nature. Starting with the bond and note bears (looking for lower Treasury prices and higher yields), the green ascending triangle would pave the way. The vertical side of the triangle is 70 basis points so a breakout from the 1.80% upper base line would target 2.50%.

For the bond and note bulls (looking for higher Treasury prices and lower yields; perhaps a flight to safety if a dramatic downturn occurs in the global economy and markets), the red rising wedge will pave the way lower as yield collapses from the rising wedge. The red lines show negative divergence across all indicators for the last one year. There is some near-term juice available in the few-month time frame. So yield can stumble along sideways for a while but would be expected to move sideways to sideways lower honoring the red rising wedge pattern. The chart will have to be monitored each week forward to see if the situation changes.

The ADX line shows a strong upward trend in yields during late 2013 and early 2014 (pink box) but the trend petered out into a sideways stumble currently. The yield is above the 20-day MA above the 50-day above the 200 so a mean reversion will be needed. The top thin neon blue line is at 1.877% and must be watched closely. Note that there is upside space remaining in the red rising wedge and the near term strength in the indicators can allow yield to play in the 1.80%-1.90% range for the next month. A decision must be made, however, over the coming days and weeks. Price is sneaking up and out of the ascending wedge and back kissing the 1.78%-1.80% breakout area which encourages those looking for higher yields.

The projection is for the 5-year to play around at these current levels, 1.75%-1.90% for the upcoming days and weeks, say a week or three, and the expectation is for the rising wedge to win out causing yield to move lower down to the 20-week MA at 1.66% for starters. The chart can be reassessed as time moves along and the ascending triangle must be watched and shown respect over the next month. 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 9:45 AM:  The 5-year Treasury yield spikes this morning to a HOD at 1.80% and is now printing at 1.786%.

Note Added 10:18 AM on Saturday, 9/27/14: The 5-year is at 1.802%. Yields move higher as bond king Bill Gross leaves PIMCO, the  company he founded, and joins Janus.

Note Added 6:40 AM on Tuesday, 9/30/14: The 5-year is at 1.79% up from a 1.76% print overnight.

BPSPX Bullish Percent Index Daily Chart

Now is a good time to check the BPSPX signal. A market buy signal occurs when the BPSPX reverses and moves six percentage-point higher. The all-clear double-whammy buy signal occurs when price then moves above 70% signaling nothing but blue skies ahead for bullish traders. A market sell signal occurs when the BPSPX reverses six percentage-points to the downside. The double-whammy sell signal occurs when price falls under 70%.

The BPSPX fell from 85 to 79 off the top so the bears receive and are currently enjoying a market sell signal since early July (type 'BPSPX' in the search box at the right to bring up prior charts for further study). The bears were drinking champagne and celebrating as they were about to drop under the 70% level receiving the double whammy sell signal, however, instead the bulls stage the comeback rally. From 71-ish, the bulls needed to hit 77-ish to signal the all-clear for bullish upside fun. It appeared a done deal especially with the non-stop Fed money printing constantly sending stocks higher. Instead, the bears eat some spinach and punch the bulls in the face stopping the upside attempt to take control. The BPSPX is now down at 70% again.

The bears are so close to the double whammy sell signal they can taste it. Watch the BPSPX closely and check the number after the closing bell. If 70 is lost, markets are going to drop far more and grow far uglier. The bulls can save the day and stop the slide if they can keep the BPSPX above 70. If 70 is lost, all hope for the bulls is lost. The pivot from this 70% area is going to firmly tell you the market story 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.

Note Added 8:59 PM: The BPSPX ends the session at 70.20. The bears are only twenty cents away from creating a market event that will send stocks strongly lower. The bulls remain in the game but there is no space remaining to 70.00. Bulls must bounce the BPSPX tomorrow or they will fall down the rabbit hole if 70 fails. The tension builds.

Note Added 10:15 AM on Saturday, 9/27/14: You cannot make this stuff up. The BPSPX closes exactly at 70.00. The pivot above or below come Monday morning will dictate the directional path ahead for markets for the next few days. If 70 fails, bad things will happen to the stock market. Bulls must come to play on Monday morning to send the BPSPX higher, otherwise, they will fall down the steps.

Note Added 11:33 AM on Monday, 9/29/14: BPSPX loses the 70% level to 69 for a double whammy sell signal. Bad things will happen to the equity markets including another strong leg lower if BPSPX stays under 70.

Note Added 6:33 AM on Tuesday, 9/30/14: The BPSPX ends at 68.80 a very negative market signal. The bears receive the market sell signal reversing the BPSPX by six percentage-points at the end of July so you knew market weakness was on tap. Yesterday the 70% level is lost which creates a double whammy sell signal. Markets will tumble down the rabbit hole here forward--as long as the BPSPX remains under 70. Watch BPSPX closely the remainder of the week since it tells you the market answer moving forward. Bulls must push BPSPX above 70; otherwise the broad indexes will collapse.

SPX 60-Minute Chart 200 EMA Cross

Price has been playing games over the last couple days above and below the important 200 EMA on the SPX 60-minute chart at 1988.61. (Reference the previous chart from a couple days ago.) As mentioned with the prior missive, bad things will happen to stocks if the 200 EMA fails, and it failed, so bad things are happening. A back kiss will be needed to the 200 EMA at some point forward. Note the drop over the last three hours began with the doji candlestick top.

With the large collapse, the indicators are positively diverging so price will likely stabilize sideways. A large drop like this is creating technical damage as evidenced by major stocks and indexes losing their 50-day MA's. The SPX 50-day MA is 1976.45 so look for price drama around this level today and perhaps into the closing bell. The 1973 is very strong support and price is stabilizing at this level.

The SPX drops under the 200 EMA signaling bearish markets for the hours and days ahead. The bears finally wrestle back control of markets after a never-ending bull party. Major S/R levels are 1985-1986, 1976.45, 1973, 1968, 1963, 1960-1961, 1951 and 1924. So price is playing around inside the 1968-1986 zone. Use the S/R levels as a guide. 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 9:05 PM:  The SPX ends at 1966 dropping 2 handles in the last one minute but the 1968 support held during the afternoon. The 1963 would be the next strong support. That is a strong support gauntlet at 1960-1963 which would send price to 1951 if it fails. The SPX will have to back kiss the 200 EMA at 1987.80 (call it 1988) at some point forward.

Note Added 10:20 AM on Saturday, 9/27/14: The SPX comes up to back kiss the 200 EMA at 1986.95; that did not take long. Price teases 1987 and then drifts lower into the closing bell on Friday closing at 1982.85 four points below the important bull-bear line in the sand keeping the bears in control. The longer that the SPX stays under the 200 EMA at 1987 the more the stock market negativity and selling pressure will increase.

SPX Daily Chart Tight Band Squeeze

The stock market drama continues with sideways choppiness resolving to the downside. Yesterday was a bull trap as the dip-buyers, trained like Pavlov's dog due to never-ending Fed easy money, ran into the long side only to have their head delivered on a platter this morning. The pricing behavior at this tight standard deviation band squeeze (pink lines and arrows) is remarkable and very atypical. Price hinted that the upside breakout would occur for the tight squeeze but price stalled at the upper band instead of continuing higher. So the bears had the ball and pushed lower looking like they will claim victory for the strong 80 to 90 handle band squeeze move but price stalled at the lower band. Yesterday the market rallies and it appears that the bulls were going to take the tight band squeeze to the upside with a big party to 2050 on tap. Now, today, the bulls are smacked in the teeth and the final result appears to be a squeeze move lower. (Tight band squeezes only tell you that a major move is coming but does not predict direction.)

The red lines show the negative divergence in place creating the two peaks and smack downs (red arrows). The indicators are weak and bleak wanting lower lows after any bounce occurs except for the money flow that is more optimistic wanting to see price recover quickly. The blue bars show how price retraced 100% of the down move from late July to early August and then topped out at the 1.24% Fibonacci extension area of 2009-2015.

Price has lost the lower red trend line and also back kissed the trend line with yesterday's rally resulting in collapse today. The SPX loses the 50-day MA at 1976.41 so monitor this key level. The tight band squeeze appears to be resolving to the downside and perhaps sliding down the lower band similar to the early August action. Price reversed from the 2020-ish top which targets 1930-1940 (based on an 80-90 point drop which was the relative moves for the prior squeezes in May and late July. Major S/R levels are 1985-1986, 1973, 1968, 1963, 1960-1961, 1951 and 1924. 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 9:10 PM:  The SPX remains under the 50-day MA for the first time in five weeks. The 100-day MA is 1954.50 and price bounced from the 100-day in early August when President Putin's words created the catalyst to begin the stock market rally move. The 150-day MA is 1924.23. As listed above, the downside target using the band squeeze move is 1930-1940. Strong support is at 1951 and 1924. Mixing all this together a confluence is formed at 1951-1955 and if that fails, a move to 1924-1930 may be in the cards. First, the bears would have to break down through the 1961-1963 support gauntlet.

RUT Russell 2000 Small Caps Daily Chart 150-Day MA Flattens Indicating Cyclical Bear Market

Here is an update on the RUT cyclical bear market saga. The 150-day MA is a critical moving average that identifies a cyclical bull market versus the cyclical bear market. You can check the 150-day MA for all your stock holdings to see if you are on the right side of the trade, or not. If the 150 is sloping upwards, a cyclical bull market is in play with higher highs for the weeks and months ahead. If the 150 is sloping downwards, a cyclical bear market is in play with lower prices for the weeks and months ahead.

This chart was first highlighted when the 150-day MA flattened and turned down in early August ushering in a cyclical bear market. In fact, that small circle may represent the conception of the cyclical bear market in stocks here forward. As long as the 150-day MA continues sideways to sideways lower, sloping lower, the cyclical bear market is locking on course.

As long as the RUT stays under 1150-ish, the 150-day MA will curve downwards. The market bulls desperately need the RUT above 1155 and higher as soon as possible to bring back the party days. Remember, the Dow (INDU) 150-day MA flattened as well but it has since resumed the upperward path. Watch the RUT and INDU 150-day MA's since they tell you if the long awaited cyclical bear market (for the coming weeks and months and year or two) is here, or not. Follow the COMPQ as well since it is starting to flatten. For now the bears are taking control of markets starting with the small caps. If RUT remains under 1150 and lower, the bears will win in the stock market moving forward; the broader indexes would be expected to follow to the downside. As has been the case for the last 5-1/2 years, a central bank can fire a money bazooka at any time creating happy days again. 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 60-Minute Chart 200 EMA Cross

Here is some new drama to monitor; the important 200 EMA on the 60-minute. Remember last week we watched for the potential breach at the 200 EMA only to see the bulls recover? Here we are again. The 200 EMA on the 60-minute is 1988.86. Price is above signaling bullish markets for the days and hours ahead, however, the SPX is teasing a potential failure only about one point away. The initial market price action did pierce under the 200 EMA. If the SPX loses the 200 EMA, bad things will quickly happen to the stock market.

The 8 MA is below the 34 MA on the SPX 30-minute chart signaling bearish markets for the hours ahead so either the 30-minute chart will prove correct or the 60-minute chart above will prove correct. The charts will agree on the same direction going forward so monitor the situation until the winner is known.

If the SPX remains above the 200 EMA a relief rally will occur, however, if the 200 EMA fails, the stock market can fall down the rabbit hole extremely quickly (a market flush may occur). Watch 1989 as a major bull-bear line in the sand. This information is for educational and entertainment purposes only. Do not invest based on anything you read or view here. Consult your financial advisor before making any investment decision.

Note Added 11:03 AM: SPX 1991.

Note Added 11:07 AM: SPX drops to 1990.44..... 1990.24 ...... the 200 EMA is 1988.87 .... whoa, 'slip-sliding away' as Paul Simon would sing...... the SPX is 1900.03....... bounce ...1990.50. The bears are so close they can taste it. If the bears cannot push the last point lower to unlock market carnage, then the bulls will take the ball and run with it. The fight continues.

Note Added 11:11 AM:  Ho...whoa .... SPX 1988.84 a rupture of the 200 EMA ..... As the Apollo astronauts said decades ago, "Houston, we have a problem."

Note Added 11:13 AM: Price drops under the 200 EMA signaling bearish markets ahead and a potential flush in the stock market imminent. Watch to see if the bears can remain below, or not. The SPX is 1988.48. The 200 EMA is 1988.86. It is bounce or die time. Bulls will be crying in their beer this evening if they cannot create an immediate bounce.

Note Added 11:47 on Wednesday, 9/24/14: So the bears created the 200 EMA failure yesterday into today and a flush occurred but a short time ago the bulls push back above the 200 EMA at 1988.69. The SPX is at 1991.73. The fight continues. Watch the VIX 200-day MA at 13.54 to see if the bears can hold the line, or not. VIX is 13.95. Bears are fine if they keep VIX above 13.54. Bulls will make headway higher if they can push VIX under 13.54. Note that market were weak moving through the new moon as is typically the case each month. This week after OpEx in September is typically down 80% of the time and so far that is playing out. Rosh Hashanah begins tomorrow so volume will likely trail off into the Friday close. Bears need the SPX back under 1989 so they can resume the downside.

VIX Volatility Daily Chart

The 200-day MA is at 13.54 and is a key S/R line in the sand for volatility and a great predictor of market direction. If you are long the stock market, you want the VIX to be under the 200-day MA. If you are short the market, you want the VIX to be above the 200-day MA.

VIX 12.38 is another important line in the sand identified by the Keybot the Quant algorithm. So with the VIX above both 12.38 and 13.54, the bears are on easy street as the stock market sells off. Bulls can stall and even stop the market downside if VIX drops under the 200-day MA at 13.54. Bulls got nothing unless they can push volatility lower. VIX is at 13.92. Bears will create more market selling if VIX moves above 14 and higher. Watch VIX 13.54 and VIX 12.38 to gauge market 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 11:03 AM on Tuesday, 9/23/14: The VIX is at 14.20 with a HOD at 14.83 levels not seen since early August.

Note Added 9:20 PM on Thursday, 9/25/14: The VIX closes at 15.64 after printing a HOD at 16.69. The SPX pukes 32 points today, -1.6%, down to 1966.

RUT Russell 2000 Small Caps Daily Chart Death Cross Pattern

The 50-day MA crosses down through the 200-day MA today creating a Death Cross pattern. Seasoned technicians do not pay much attention but the patterns make for exciting news headlines. A death cross ushers in a period of bearish weakness that can last for weeks or months. Typically when the cross occurs price will tend to bounce but in the weekly and monthly time frame, the death cross does usually accurately forecast weakness in the short to intermediate terms. Keep an eye on it over the coming days. As long as price stays under 1150-ish, the death cross will continue to hold. 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 10:48 AM on Tuesday 9/23/14: The 50-day MA further stabs down through the 200-day MA as the RUT price collapses to 1127 not seen since early August.

Keybot the Quant Turns Bearish

Keystone's proprietary trading algo, Keybot the Quant, flips to the bear side at SPX 2004 in these sideways choppy markets. Stocks are selling off on the higher volatility with the VIX leaping above 12.38 that is identified as a bull-bear line in the sand by the algo. As always stay alert for a whipsaw today or tomorrow. Bulls need VIX under 12.38 to stop the market selling, othewise, equities will continue leaking lower.

More information is found at Keybot's site;

Keybot the Quant

SPX Monthly Chart Overbot Rising Wedge Negative Divergence

The Fed-induced upside stock market rally for 5-1/2 years is remarkable. The afterburners kicked in to start 2013 when Congress avoided a budget crisis. The BOJ shouted "Banzai!" in 2013 printing yen like madmen creating the huge move in Japan and US stock markets. The big pump in stocks occurs through financial engineering with companies offering higher dividends and most importantly stock buybacks, funded by the Fed's easy money. This makes the people holding stocks wealthier, too bad it is only one-half of the country. The other half, the middle class and poor, pay the way for the wealthy to become wealthier but they do not benefit themselves since they do not own stocks.

So here we are at new all-time highs again at 2019.26 the highest print for the S&P 500 in history. We update the monthly chart waiting for the technicals to signal the roll over and end this historic 5-1/2 year rally. There are 7 days remaining in September. The month began at 2003.37 so monitor this number closely in the days ahead. The 2002-2003 level is very strong S/R (reference the SPX S/R missive). Note the ADX at near 39 and contininuing higher verifying the strong trend higher for the stock market. Is it flattening? Note also the MACD line that continues sloping higher. Is it flattening? The money flow shows a strong peak but that is from August so you have to wait until Tuesday, 9/30/14, for the final monthly print to see if the money flow negatively diverges, or not.

The RSI, histogram and stochastics are negatively diverged telling price to give up the ghost and stop the multi-year upside masquerade on central banker money. The monthly print in 7 days cannot be more important since it may identify the exact top in the multi-year rally. When the final price print occurs in 7 days, watch to see if the MACD, ADX and money flow print lower (negative divergence) to join the neggie d with the other indicators. If so, the top is in and the bears will finally receive a multi-month turn at bat.

Note how volume trails lower for the last few years. Option volume remains consistent so savvy investors and the wealthy that own stocks are having a blast in the markets at the rest of America's expense. The middle class and poor have been burned ever since the 2008-2009 financial crisis and need their savings to pay living expenses so they are unconcerned about investing in the stock market. It becomes harder each day to make ends meet as well as supporting family members and young adults that struggle to support themselves. The US now consists of the have's and have not's created buy the Fed's easy money policies. The wealthy dine on steak and caviar each night and toast the Fed praising Chair Yellen's immense power that makes them richer day after day.

Bringing it back to technicals, in 7 days watch the MACD line, ADX liine and money flow to see if they negatively diverge. If so, the end is in for the multi-year rally. The 10-month MA represents a major warning line that the old-timer's like Keystone follow. Note how price bounced directly off of the 10-month this year knowing the serious ramifications if it fell through. The 12-month MA is one of Keystone's cyclical market signals and represents a cliff in the markets. If the 12-month MA fails, extremely bad things will happen to the stock market.

Young adults do not know what a bear market and weak economy is since they have enjoyed the recent bread and circus years created by the Fed. Likewise tech start-ups. Everyone is chasing the latest shiny object but realize that once the stock market and economy turns south, and they will, life will change quickly. The tech ideas center around folks buying lots of things as well as using new payment systems via smartphone, however, once the economy rolls into recession folks will not be buying much of anything. The rosy sales projections for all the fancy tech start-ups will be immediately thrown out the window. Business will slow in all sectors. People lose their jobs.

Many young folks do not realize how quick and hard this will bite and negatively effect their lives and jobs. Humans have short memories. At the 2007 stock market top, the wine was flowing like water, everyone had a new car, house values were climbing daily, jobs were plentiful and there was no where to go except up. Folks took out big loans without thinking since the current fun times were expected to continue. People's lives were completely changed in 2008-2009 when the ax fell. Prepare yourself for the next ax. Do not become sucked into the ongoing euphoric thinking.

Nowadays everyone expects the stock market to go up forever since the Fed continues a ZIRP Forever policy. Instead of staying at the euphoric party too long, pay off any outstanding loans to the greatest extent possible and save cash. In fact, the chart above may tell you in 7 days that the end is here. Folks nowadays have taken out multi-year loans for expensive new cars they cannot afford reminiscent of the subprime lending that led into the housing bubble popping in 2005-2007. If you can fog a mirror, you can drive a brand new vehicle off the show room floor; these scenario's never end well. Remember, technical-wise, the collapse from a rising wedge pattern can be quite dramatic.

Even if the chart does not completely negatively diverge in 7 days, that will simply mean that the multi-year top is only one or two months more in the future; only delaying the inevitable by a few more weeks. The rising wedge, overbot conditions and negative divergence is extremely ominous. Watch your wallet. Prepare yourself. 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 Negative Divergence

We have watched the recent tops form and result in spank downs as the negative divergence, overbot conditions and rising wedges dictate, however, the bears cannot gain any downside traction. The central bankers keep pumping stock markets higher. Last week was a double barrel bazooka with the Fed remaining accomodative and the PBOC adding stimulus so the SPX gains +1.3% on the week and overcomes the chart negativity. The maroon lines on the right hand side show universal neggie d across all indicators as the price prints a new weekly high. The indicators are no longer enthusiastic about seeing price climb to higher and higher highs.

Note the ADX in the 20's that was starting to indicate a strong trend but now goes flaccid and deflates under 24. If the rally was robust and wanting to continue strongly higher, the ADX should be above 30 and sloping higher and higher. The trend is actually lackluster and flat despite the new all-time highs. This hints at a potential sideways move ahead; sideways to sideways lower. The weekly volume is robust for bulls but is skewed by the Quadruple Witching OpEx and index rebalancing last week. Nonetheless a move into the 1925-1975 area would be prudent to see which side can print the larger volume numbers. The MACD line cross favors bears but only by a tiny hair. Watch the MACD cross closely. The weekly chart favors the bears and forecasts lower markets ahead for the 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.

SPX Daily Chart Tight Bands Rising Wedge Negative Divergence Price Extended

The drama around the tight standard deviation bands (pink) continues. The prior tight squeezes in May and July (one up and one down) result in 80-90 point moves in the S&P. The tight band squeeze does not predict direction it only forecasts a strong and powerful move one way or the other. Going into Friday morning with the BABA hype and up futures, the SPX bounced at the open and it appeared the bulls were christened with the strong upside squeeze. Not so fast. Bears decide to put up a fight and create Friday's doji candlestick that typically indicates a trend change.

The tight band squeeze theatrics continue. Price is paused at the upper band. If the bears want to create a sharp down move from the squeeze it has to start on Monday, otherwise, the bulls will continue the upside orgy to 2020-2060. The red lines show a rising wedge pattern (bearish) and firm negative divergence for the last four months across all indicators. Price is exhausted and the stocks were sold off on strong volume from the Friday top (although the Quadruple Witching OpEx and index rebalancing created much of the volume).

Price is now above the moving average ribbon above the 20-day MA, above the 50-day, above the 200-day, so a mean reversion will be needed back to the downside. Money flow and stochastics are trying to squeeze out some more upside juice in the VST but if successful it should only be a one to three day event at best. The bulls looked like non-stop winner to 2050-ish last Thursday but are now stalled. Monday is a very important day for markets. Bears have to maintian the negative MACD cross (purple circle). If the MACD cross turns positive, the bulls are off and running higher. 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.

TRIN Arms Index SPX Daily Charts

The TRIN collapsed to 0.31 after the opening bell Friday morning verifying the uber bullishness and euphoric stock market sentiment. There are no bears remaining; everyone is bullish. The TRIN closes at 0.90 but the uber low 0.31 print is more important. As the 0.31 printed that marked the exact top in stocks shortly after the opening bell on Friday. The Arms Index is a contrarian indicator. 1.00 is the neutral line. Bulls are in control of markets below one and bears are in control above one. When the TRIN moves too high especially at, near or above 2.00, folks are panicking and worrying about a continued market selling event. Instead, the stock market will bottom and a rally will begin. This is because traders are too pessimistic. When the TRIN collapses under 0.60 and lower, the bullish euphoria is off the charts and stocks will top out and sell off, like Friday. This is because traders are too optimistic.

You want to be nibbling long at 1.6-1.8 and higher and become far more bullish above 2.00. You want to be nibbling short under 0.7 and lower and become far more bearish below 0.60. The green and red circles ebb and flow like the waves on the ocean, crests and valleys, peaks and bottoms. With the uber low 0.31 print occurring on Friday, what do you think will happen 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.

SPX S/R Support, Resistance, Moving Averages and Other Important Levels for Trading the Week of 9/22/14

SPX (S&P 500) support, resistance (S/R), moving averages and other important levels are provided for trading the week of 9/22/14. Levels shown in bold are strong resistance and support. Bold and underlined levels are very strong and important S/R. The SPX all-time intraday high is 2019.26 on 9/19/14 and the SPX all-time closing high is 2011.17 on 9/18/14. The bulls are relentless and merciless against the bears. The non-stop stock market upside is fueled by perpetual central banker easy money. ECB President Draghi announces a European-style QE program two weeks ago and promises far more QE in 2015, the Fed is dovish last week with Chair Yellen promising ZIRP Forever, the PBOC pumps the Chinese banks and economy with stimulus late last week and of course BOJ Governor Kuroda works overtime each day printing yen. The weak yen sends the dollar/yen pair above 109 and creates continued highs in Japan and US stock markets.

For Monday with the SPX starting at 2010, the bulls need to move above 2019 to create an upside acceleration that will quickly tag 2022. The bears need to push under the 2007 support to accelerate the downside. A move through 2008-2018 is sideways action to begin the new week of trading.

There are seven days remaining in September trading so keep an eye on 2003.37 as the month draws to a close. Seasonality-wise, the week after OpEx in September is down 80% of the time so the bears are salivating for some revenge in the week ahead. The new moon hits about 1:15 PM EST on Tuesday afternoon and equities are typically bearish moving through the new moon. So the bears are grabbing for any straws to help claw their way back and stop the unstoppable market upside. Volatility is very important. Bears need VIX above 12.38 to create market weakness, otherwise, they got nothing. Bulls will send equities higher if VIX stays under 12.38.

The 2002-2003 support level is very strong so bulls are fine above this level. The 1988 support is very strong since it forms a confluence with important moving averages. The 1985-1986 support is formidable. This is a strong barricade and even if the bears punch down through 2002-2003 and 1988 the 1985-1986 level will put up a big fight. In general, bulls are fine above 1988. Bears will growl strongly and create market mayhem under 1985.

2019 (9/19/14 All-Time Intraday High: 2019.26) (9/19/14 Intraday High for 2014: 2019.26)

2019.26 Previous Week’s High

2019.26 Friday HOD

2013

2012

2011 (9/18/14 All-Time Closing High: 2011.36) (9/18/14 Closing High for 2014: 2011.36) (9/4/14 Intraday High: 2011.17)

2010.40 Friday Close – Monday Starts Here

2010

2009

2007 (9/5/14 Closing High: 2007.71)

2006.59 Friday LOD

2006

2005 (8/26/14 Intraday High: 2005.04)

2004

2003 (8/29/14 Closing High: 2003.37)

2003.37 September Begins Here

2002

1999

1998

1997

1995

1993

1991 (7/24/14 Intraday Top: 1991.39)

1988.50 (20-day MA)

1988.30 (200 EMA on 60-Minute Chart a Keystone Market Turn Signal)

1988 (7/24/14 Closing High: 1987.98)

1987

1986 (7/3/14 Intraday Top: 1985.59)

1985 (7/3/14 Closing High: 1985.44)

1982

1980

1978.48 Previous Week’s Low

1978

1976

1975.43 (50-day MA)

1973

1970

1968 (6/24/14 Intraday Top: 1968.17)

1964

1963 (6/20/14 Closing High: 1962.87)

1961

1960

1959

1958

1956 (6/9/14 Intraday Top: 1955.55)

1955.33 (20-week MA)

1951 (6/9/14 Closing High: 1951.27)

1950.42 (100-day MA)

1949

1947

1942

1940

1937

1936

1931

1929

1928

1925

1924 (5/30/14 Intraday Top: 1924.03) (5/13/14 Closing High: 1923.57)

1923

1920.26 (150-day MA; the Slope is a Keystone Cyclical Signal)

1920

1917

1912

1910

1907.49 (10-month MA; a major market warning signal)

1907

1902 (5/13/14 Intraday Top: 1902.17)

1901

1897 (5/13/14 Closing High: 1897.45) (4/4/14 Intraday Top: 1897.28)

1894

1893.01 (200-day MA; not tested for 22 months extremely odd behavior)

1891 (4/2/14 Closing High: 1890.90)

1889

1886.44 (12-month MA; a Keystone Cyclical Signal) (the cliff)

1886

1885

1884 (3/21/14 Intraday Top: 1883.97) (3/7/14 Intraday Top: 1883.57)

1882

1880

1879

1878 (3/7/14 Closing High: 1878.04)

1877

1874

1872.91 (50-week MA)

1872

1871

1868

1867

1865

1862

1859

1855

1853

1852

1851 (1/15/14 Intraday Top: 1850.84)

1849 (12/31/13 Intraday High Top for 2013: 1849.44)

1848.36 Trading for 2014 Begins Here

1848 (1/15/14 Closing High: 1848.38) (12/31/13 Closing High for 2013: 1848.36)

1846

1845

1843

1842

1841