Monday, June 29, 2015

CPC and CPCE Put/Call Ratios Daily Charts Signal a Market Bottom at Hand

Remember that Keystone highlighted the low CPC and CPCE put/call ratios over the last couple weeks or so expecting a market top due to the uber complacency. The top occurs. The idea was to wait for the put/calls to spike where a tradeable bottom can be placed. That occurs today as traders are experiencing fear and panic. The CPC jumps to 1.38 and CPCE to 0.94. The uber high readings match up with the October market low and also the early August low. It may take a day or few to place a rigid bottom for stocks but with these high readings, long positions can be nibbled on and the scaling in process for long plays can be started. A stock market bottom will occur at anytime in the next few days.

The Federal Reserve and other central bankers are the market. Interestingly, the PBOC cut rates and lowered the triple R's on the weekend but the SSEC sold off anyway. The ball is in ECB President Draghi's court; he was quiet today. The market bottom in stocks will likely occur when Draghi proclaims that he will run the printing presses full tilt to mitigate Greece turmoil. The central bankers are the market. 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, June 27, 2015

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

The SPX is below the 200 EMA on the SPX 60-minute chart at 2107 signaling bearish markets for the hours and days ahead, however, the move lower is not yet convincing. As highlighted in the previous message, several moving averages and the June starting number all converge at 2095-2108. The importance of this range cannot be understated. Bulls need to push above 2107-2108 to reassert their dominance and send stocks strongly higher. If so, the SPX would move above the 200 EMA signaling bullish markets ahead.

The bears must keep the SPX under 2107-2108 with all their might. As long as they do they are fine and markets will weaken and slip away to the downside. Under 2095 and stocks will collapse strongly lower immediately to 2091 then to 2086. It is reasonable to expect a back kiss of the 200 EMA although a successful back test has already occurred three days after price fell through the 200 EMA. June began at 2107 so there may be a push higher to challenge this area as the month ends on Tuesday and 2107 determines an up or down month.

Bears are fine and in charge under 2107-2108. The bulls will take over above 2107-2108. 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&P 500 Daily Chart Rising Wedge Versus Ascending Triangle

The battle between the red rising bearish wedge and bullish green ascending triangle patterns continues. Bears win below the red lines while bulls win above the green lines. This battle is high drama for the last couple months. The bulls broke up and out of the green triangle in May only to receive a spank down from the upper red trend line of the rising wedge. Then price falls through the lower rail of the red wedge causing bears to cheer but bounces at the bottom trend line for the green triangle empowering the bulls again.

The bears receive another successful back test of the wedge failure which lights the way lower only for the SPX to bounce off the lower green trend line again. The SPX then ran higher only to fail at its 2120 base line a few days ago. Price appears unable to move above the red trend line with several successful back tests occurring so price weakens and drifts lower. The bulls are still fighting, however, with price at 2101 since the lower green line support is at 2091. Under 2091 will be big trouble for bulls and the 2078-ish area will be likely on tap.

Note how price respects the 100 and 150-day MA's support levels this year. Price bounced directly up off the 100-day MA support at 2095 on Friday. The 20-day MA is 2103. The 50-day MA is 2107. June started at 2107 with only two trading days remaining that will determine if the month is positive, or negative. The 200 EMA on the 60-minute chart, a key short-term signal, is, yes, you guessed it, 2107 (SPX is under the 200 EMA indicating bearish markets for the hours and days ahead; bulls need the SPX above 2107-2108 pronto or they will lose their grip). The 20-week MA is 2098. Thus, a serious gauntlet of support/resistance is at 2095-2107. Market bulls win big above 2107-2108. Bears win big under 2095. The 2095-2107 range is noise.

If bulls take out 2107-2108, price will run to 2110, then 2118-2120 to test the ascending  triangle baseline break out, then 2130 and 2135 and higher to 2145 then 2180. The bears must take price under 2091 which should lock in the bearish rising wedge pattern which would typically result in a dramatic collapse. The 1980-2030 level would be easily doable over the next couple months. If 2091 fails, price will immediately test 2086 and if that fails, the 2072-2081 range is next then much lower. Greece talks appear to be breaking down which is a negative for stocks but the PBOC (China's central bank) cut rates a few hours ago which will reinflate the Chinese stock bubble and cause buying around the globe. 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 Bearish

Keystone's trading algo, Keybot the Quant, flipped to the short side this week at SPX 2106. The stock market remains a coin-flip in a sideways choppy pattern. More info is found at Keybot's site;

Keybot the Quant

Sunday, June 21, 2015

SPX Support, Resistance (S/R), Moving Averages and Other Important Levels for Trading the Week of 6/22/15

SPX (S&P 500) support, resistance (S/R), moving averages and other important levels are provided for trading the week of 6/22/15. 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 2134.72 on 5/20/15 and the SPX all-time closing high is 2130.82 on 5/21/15. The low for this year is 1980.90 which identifies the starting point of the huge February rally.

For Monday with the SPX starting at 2110, the bears only need one point lower, under 2109, to create a downside acceleration in the stock market so keep an eye on the S&P futures overnight. The bulls need to touch the 2122 handle to create a quick acceleration to 2130. A move through 2110-2121 is sideways action to begin the week. The SPX began the year at 2059 so stocks are positive on the year up +2.0%. Interestingly, the key 10-month MA is at 2059 as well. The last day of trading for June, EOM, is seven trading days away, Tuesday, 6/30/15, so the 2107 level will gain importance each day forward since it determines if the month is positive or negative.

Important and direct support/resistance levels are 2135, 2131, 2126, 2121, 2118, 2108-2110, 2104-2105, 2099 and 2091. The support gauntlet at 2108-2110 is key as well as 2104-2105 since the 50-day MA at 2105.57, 20-day MA at 2104.30 and the 200 EMA on the 60-minute chart at 2104.22 is within this range. If 2104 fails, 2099 is next, then 2095 then 2091.

Looking at the big picture the strongest S/R is 2135, 2131, 2126, 2121, 2118, 2108-2110, 2104-2105, 2099, 2091, 2086, 2081, 2079, 2076, 2072, 2067, 2061, 2046, 2040, 2038, 2032, 2030, 2023, 2019, 2011, 2002-2003, 1997-1998, 1993, 1988, 1985-1986 and 1982. The SPX moves choppy sideways through the 1990-2120 (130 handles) range for the last seven months, 2061-2120 (59 handles) for the last five months and 2072-2120 (48 handles) for the last three months, with price attempting to break out above the top of the ranges at 2120-2130 late last week.

Bulls win big above the 2121. Bears win big under the 2104-2105 level. The battle continues between 2106-2120. Pay attention to June’s starting number at 2107.

2135 (5/20/15 All-Time Intraday High: 2134.72)
2131 (5/21/15 All-Time Closing High: 2130.82)
2126.65 Previous Week’s High
2126 (4/27/15 Intraday High: 2125.92)
2121.64 Friday HOD
2121 (4/24/15 Intraday High: 2120.92)
2120 (2/25/15 Intraday High: 2119.59)
2118 (4/24/15 Closing High: 2117.69)
2117 (3/2/15 Closing High: 2117.39)
2109.99 Friday Close – Monday Starts Here
2109.38 Friday LOD
2107.39 June Begins Here
2105.57 (50-day MA)
2104.30 (20-day MA)
2104.22 (200 EMA on 60-Minute Chart a Keystone Market Turn Signal)
2095.32 (20-week MA)
2094 (12/29/14 Intraday High: 2093.55)
2091 (12/29/14 Closing High: 2090.57)
2090.75 (100-day MA)
2079 (12/5/14 Intraday High: 2079.47)
2076.19 (150-day MA; the Slope is a Keystone Cyclical Signal)
2076 (11/28/14 Intraday High: 2075.76)
2075 (12/5/14 Closing High: 2075.37)
2073 (11/26/14 Closing High: 2072.83)
2072.49 Previous Week’s Low
2071 (11/21/14 Intraday High: 2071.46)
2058.90 Trading for 2015 Begins Here
2058.71 (10-month MA; a major market warning signal)
2056 (11/18/14 Intraday High: 2056.08)
2050.36 (200-day MA)
2046 (11/13/14 Intraday High: 2046.18)
2043.43 (12-month MA; a Keystone Cyclical Signal) (the cliff)
2039.46 (50-week MA)
2019 (9/19/14 Intraday High: 2019.26)
2011 (9/18/14 Closing High: 2011.36) (9/4/14 Intraday High: 2011.17)
2007 (9/5/14 Closing High: 2007.71)
2005 (8/26/14 Intraday High: 2005.04)
2003 (8/29/14 Closing High: 2003.37)
1993 (1/15/15 Closing Low for 2015: 1992.67)
1991 (7/24/14 Intraday Top: 1991.39)
1988 (7/24/14 Closing High: 1987.98)
1986 (7/3/14 Intraday Top: 1985.59)
1985 (7/3/14 Closing High: 1985.44)
1981 (2/2/15 Intraday Low for 2015: 1980.90)
1968 (6/24/14 Intraday Top: 1968.17)
1963 (6/20/14 Closing High: 1962.87)


BDI Baltic Dry Index Weekly Chart

The Baltic Dry Index is an excellent indicator of the global economy as grains, ores, powders, resins and other materials are shipped across the ocean and the demand sends shipping rates higher and the BDI into the thousands and higher. That is not happening. Thus, the global economy is sick. The BDI topped out in late 2013 that was highlighted by Keystone at the time due to the negative divergence (red lines). The BDI has languished ever since. The Fed, BOJ, ECB, BOE, PBOC and other global central bankers as many as 14 key countries this year and more, are pumping stock markets higher by debasing their currencies. Higher stock markets do not reflect a successful economy but instead reflect obscene Keynesian money printing that has gone on for over six years.

The BDI was beaten down so low it had to perform a dead-cat bounce with possie d (green lines) helping to provide a boost. Shipping activity should stabilize from here on out so the shipping stocks can be explored for potential long plays. There is very little stocks of interest on the long side in the market these days but the shippers are worth a look. The sub 1000 BDI verifies a sick global economy and the gains in stocks, that serve to make the wealthy filthy rich at the expense of the middle class and poor, are purely a function of global central banker money printing. 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.

German Bund 10-Year Yield Daily Chart

The German 10-year yield is a remarkable story this year. Money flocked into the bund sending yields down to 0.04%-ish, under the 0.10% level, then whammo, the yield skyrockets to 1.04% in only six weeks time. It is shameful how the Fed, BOJ, ECB and other global central bankers have destroyed the markets over the last few years.

The green channel lower ended due to the positive divergence with the indicators that bounced yield higher off the bottom. The neon line shows a two-leg bull flag pattern playing out from 0.04 to o.70%, call it 0.6% difference to keep the math simple, for the first leg, and then the sideways consolidation with a slightly downward bias, then the second leg began at 0.50% targeting 1.10% (0.50%+0.60%) which was basically tagged a couple weeks ago. The selloff in bunds is historic (traders ran from the bund so prices drop like a stone rocketing yields higher). Traders abandoned the so-called safe haven.

The red lines show the top in yields due to the negative divergence, and the spankdown sends yields lower to currently test the 0.75% 20-day MA support. The 50-day MA is ramping  higher and will intersect the 200-day MA at 0.59% over the coming days forming a confluence of support. The indicators remain weak and bleak so any bounce that occurs will likely give way to lower yields perhaps targeting the 0.55%-0.60% area. Bunds may stabilize after that moving sideways. If Greece turns sour and general turmoil in global stock markets develop, traders will seek the bund safe haven again and a sideways move through the 0.30%-0.65% range would be in order. 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.

GS Goldman Sachs Weekly Chart

GS technical analysis is another request; Goldman Sachs is the latest favorite of long traders is the financials sector receives a boost. Regional banks are on fire. Everybody and his bro are throwing money at the banks proclaiming higher rates will lead to great things for financials ahead. GS price is shooting vertically higher to eight-year highs over the last few weeks up inside the rising wedge pattern. Negative divergence is in play over the long term (red lines) but the nearer term, this year and especially the last few weeks, the momo is clear with the green lines for the MACD line and money flow. The RSI, stochastics and money flow are all overbot indicating a topping pattern on the come.

Keystone's 2-10 spread rule needs to see a 255 basis point level to truly signal good times for banks ahead taking advantage of a steeper yield curve. The 2-10 spread, however, continues to print at the 160-170 area remaining about 80 bips or more below Keystone's key level. Thus, the hype about successful banks due to the steepening yield curve is currently misplaced optimism. Keystone will be the first to cheer lead the banks if the 2-10 spread exceeds 255 but not before then.

The stochastics and RSI over the last three weeks want to see a short pull back in price say to finish the month of June into early July but the momo and constant daily cheer leading by strategists, pundits and traders advising everyone to buy banks with both hands will bring price back up again until the MACD line and money flow indicators can form negative divergence and roll over which will create a top and roll price over to the downside. The red lines are not impressed with the move higher; the sharp move higher in price is mainly momentum due to the prospect of higher yields going forward. As seen by the previous TNX chart it is likely that the 10-year yield will stall going forward, especially in a stock market pull back, so those expecting a 3% 10-year yield in the months ahead may be disappointed which shoots a leg of the stool out from the banks.

The projection is for a pull back in GS over the coming days say to finish June into July but price will come back up again to current highs, which are record highs comparing all the way back to 2007, then with the MACD line and money flow turning neggie d, a top will be in probably in July leading into a multi-week pullback. The same analysis can be applied to the regional banks such as the KRE chart gong forward. The regional banks should print a significant top between July-September and roll over. 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

Apple is another request; all market participants are watching AAPL since it impacts the Nasdaq indexes and Dow Industrials. AAPL is not an attractive stock on the long side going forward. Nearly every fund owns Apple and the cheer leaders appear on television daily to pump the stock. Apple enthusiasts continue to cheer the Apple Watch and Apple Pay despite their limited success to date and detailed numbers not released by the secretive tech company. Apple Watch was in the news daily a couple months ago, then that faded to every few days now. You may see hot-shot tech workers proudly donning the Apple Watch, or television celebrities that want to appear hip, but in your local community how many have you seen? One of the greatest outcomes of the cellphone and smartphone era over the last decade is the ability to ditch a wrist watch. Those that work with their hands, or that live in cold climates with lots of layers are not in a rush to buy the watch. The high-tech employees, that sit behind desks all day, and maintain lily hands without blisters and callouses proudly display their watches; the watch is a lot more useful if you never get your hands dirty.

All that aside, the daily, weekly and monthly charts are all rolling over. For the weekly above, price received the negative divergence spankdown starting three weeks ago as the red lines clearly predicted. The rising wedge pattern is bearish as well as the overbot levels late last year and this year. Price is trying to maintain the 20-week MA support at 126.73. The money flow would like a bounce so a move higher to the 128-132 area is on the table which would also satisfy a back kiss of the lower red trend line. The other indicators, however, are weak and bleak wanting lower lows in price going forward. The stochastics slip under 50% into bear territory. Watch to see if the RSI slips under 50%, or not. Note how price prints well above the moving averages requiring a long-needed mean reversion lower. Over the coming couple years, price will want to explore the lower 80-100 range again.

Apple maintains momo and everybody and his bro continues to blindly believe and cheer everything the company does. No one expects AAPL to falter; instead they expect great things forever. The Apple Watch will be available in stores beginning on Friday which may add some hype and create the move higher into the 128-132 range discussed above. If you enjoyed the ride higher in AAPL it is prudent to take the profits on the bounces and exit. There is no reason to play Apple short since it is too susceptible to hype and quick upward moves. If long, it is prudent to exit the stock and look for opportunities elsewhere going forward. It is a distinct possibility that the top for AAPL is already in with the May high and a pattern of sideways to sideways lower would be expected for price for the months and couple years 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.

NFLX Netflix Weekly Chart

A viewer would like a read on NFLX the darling of long traders this year. Netflix is the top performing chart of this year. Traders are throwing money at NFLX as it continues printing record highs. Long-time readers of the site will remember Keystone calling the exact bottom in NFLX in August-November 2012 due to the positive divergence. Ditto the pull back starting late summer last year due to the negative divergence. The stock has lots of momentum now. The daily chart wants price to pull back and take a rest for a week or two so a reasonable expectation is a retreat to 630-650 to finish June but note in the weekly chart above the long and strong MACD line, money flow and RSI exactly as price topped intraweek so price will likely want to come back up again to the current highs say in July.

In July, the weekly chart above will likely form with universal neggie d across all indicators which will allow a more substantive pullback. The monthly chart is cooked over the multi month and year time frame, however, in the very short term, say one to three months, the door remains open for price to print at the current highs or higher, call it 680-ish. A breach above 680 will lead to 720. The expectation is that NFLX will top out sometime in the July-September period at 670-720. It would not be surprising to see NFLX at sub 550, even sub 525 to end the year.

To  recap, a pullback to finish the month of June is on the table say about 15 to 30 points lower, then a quick recovery higher again to 650-680. At that time reference the above weekly chart to see if negative divergence exists across all indicators (especially the MACD line rolling over) and that will lead to more of a multi-week pullback say into late July. Price should make another run higher after that and top out sometime between late July and September. Choppy sideways is the order of the day through the summertime and then a roll over and weak finish to the year with price well off the top. In early 2016, NFLX would be expected to be around the 500 level.

If contemplating a short play, which is extremely dangerous for a momo stock, in the VST to finish June, a nimble trader may squeeze out a successful trade but the preference would be to wait until the first few days of July and make sure the MACD line goes neggie d on the weekly chart above and that will greatly increase the chance for success on a short trade over the short term. 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 Ratios Daily Charts

The CPC and CPCE put/calls have printed consistently low numbers over the last month signaling a significant market top in play. The red circles show some of the recent market tops while the green circles show several of the recent market bottoms. A proper tradeable market bottom occurs with the CPC at 1.20 and higher and the CPCE at 0.80 and higher and as seen from the charts above, the bottoms in June thus far are very cheesy and uninspiring. The case can be made that the last tradeable market bottom was back in March.

The Federal Reserve and other global central bankers have markets twisted into a pretzel. The obscene Keynesian money printing has destroyed price discovery creating asset bubbles in all asset classes despite the vast majority of market participants proclaiming that there are no bubbles in the market. The put/calls indicate that it is prudent to not be long the market until the CPC moves above 1.20 and CPCE above 0.80. Perhaps Greece turmoil may finally introduce palpable fear and panic this week. If not, then the put/calls will travel lower again and only further signal that a significant market top is at hand. The Fed and other central bankers have pumped stock markets higher for six years running and this game is very long in the tooth. 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, June 18, 2015

COMPQ Nasdaq Composite One-Minute Chart New All-Time Record High Overtaking the Dotcom Bubble High

It took 15 years, but the Nasdaq Composite finally overcomes the Dotcom Bubble all-time high on 3/10/00 at 5132.52 today at 11:30 AM EST. Traders are euphoric in a party mood buying stocks regardless of price. Fed Chair Yellen's dovishness and the ongoing money printing by the Federal Reserve and other global central bankers pumps stocks to the new all-time highs. The wealthy, that own large stock portfolios have become filthy rich courtesy of the Fed over the last six years while the middle class and poor suffer through high structural unemployment and ongoing debt. America is a country of the 'have's' and 'have not's' with the gap between rich and poor at the largest difference since the 1970's five decades ago. 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 Rising Wedge Versus Ascending Triangle

The couple-month battle of the red rising wedge (bearish) versus the green ascending triangle (bullish) patterns continues. In May, the thinner ascending triangle was in play and the bulls broke out above 2120 appearing destined for far higher prices but price retreated in late May returning into the ascending triangle and then collapsing out the bottom of the rising wedge in early June causing the bears to cheer.

Price recovered to back kiss the lower rail of the red wedge, a successful back kiss for bears, and collapsed again which placed the bears in the driver's seat but the thick green ascending triangle lower rail support held and bounced price back up again. Today the SPX launches higher and is at the breakout point of the baseline of the ascending triangle at 2120 simultaneously back kissing the lower rail of the rising wedge again. This 2120-2130 level is key and a winner will be decided in the days ahead.

Bulls need to continue up through 2120 then up through 2130 to prove they have the beans to move far higher. If so, the upside target would be 90 handles higher (the vertical side of the green triangle) which is 2210 (2120+90).

The bears need to hold the resistance at the lower red rail as price back kisses the bearish red wedge in this 2120-2130 range. The red wedge will actually remain in play up to 2145-ish but above 2145 the bulls will rocket to 2180 then to 2210.

Thus, the drama continues. Who will win? Will the bears win cheering for their red rising wedge where price is currently back testing the lower red rail, or, will the bulls cheer busting out above 2120-2130 to 2145 then far higher? This 2120-2130 resistance area is extremely important. As this is typed price sits exactly at 2120. NYSE floor trader Art Cashin identifies 2125 as key resistance which jives with the above analysis. The record SPX high is 2135 from May. 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.

SOX Semiconductors Weekly Chart

The red rising wedge, overbot conditions, negative divergence (red lines for indicators) and upper band violation all conspired to create the spank down in chips off the top three weeks ago. After the upper band violation, price needed to move to the middle band, which is also the 20-week MA, at 709, at a minimum, which it did. The lower band at 678 remains on the table. Note how price maintains the 20-week MA as solid support since late last year and when it failed in October the global central bankers immediately colluded to pump the stock market higher and save the day. SOX under 709 would indicate significant trouble ahead for the stock market.

Price failed the red rising wedge and has not back tested the lower trend line, at 735-ish, so this is on the table. As always, the collapses from rising wedge patterns can be quite dramatic, fast, and devastating so caution is required. The standard deviation lines are squeezing in tight, at the tightest since the September 2014 squeeze. Tight bands squeeze out a big price move but do not forecast the direction. Price has been far above the moving averages for the lat couple years and desperately needs a mean reversion far lower.

In the nearer tern, today, Keystone's proprietary trading algo, Keybot the Quant, is tracking SOX 714.90 as the key bull-bear line in the sand. The market bears need SOX under 714.90 to prove they got the beans to take the stock market lower. If the SOX remains above 714.90 this week, the market bears got nothing. Pay attention to the chips and especially the ongoing dance at the 20-week MA support at 709 and rising. 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 AM:  SOX launches to 725 testing its 20-day MA.

TNX 10-Year Treasury Note Yield Weekly Chart

In March, Keystone forecasted the 10-year up to the 2.30 to 2.40% range which occurs. Now what? The yield violates the upper standard deviation band (pink) so the a move back to the middle band, which is also the 20-day MA, at 2.09% and rising, is on the table. Yield broke up through the 200-day MA at 2.18% but has not yet back kissed this support. Ditto the 50-day MA at 2.21%. The yield is at 2.275% as this message is typed. The RSI and histogram indicators are stalling but the MACD line and stochatics remain long and strong wanting to see another higher high or at least a matching high to the 2.50% a couple weeks ago. Stochastics are moving into overbot territory but the RSI has not.

In the shorter term, a move to 2.15% to 2.25% is on the table. This will satisfy the upper band violation and provide back kisses of the moving averages. The long and strong MACD line and stochastics, however, want yield to come back up to 2.50% again. The key going forward is when the MACD line and stochastics negatively diverge and that cannot be possible until yield revisits the 2.50% and higher level. Thus, the projection would be a move lower to 2.15%-2.25% in the shorter term, say June-July, then back up again to 2.50% say in July-August then yield should assume a more sideways nature forward say through 2.20%-2.60% into the end of the year.

If the US stock market stumbles and pulls back for a long needed correction, the expectation is lower yields with the 10-year favoring the low end of the estimates down to the 2.00%-2.30% range. A move higher to the 2.80%-3.00% range, that many strategists expect, due to a potential Fed rate hike, is currently not on the table but the chart can be revisited in a couple weeks or month to see how it progresses. 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.

USD US Dollar Daily Chart Sideways Channels

The US dollar index topped out in the spring time with the 'M top', or double top, if you prefer. The red lines show the two negative divergence spank downs from the peaks. The indicators are staggering sideways not hinting a move either way. The ADX at 11 shows a trendless direction for price (sideways). It is reasonable to expect another test of the 93-ish area over the coming weeks, perhaps days, but overall the chart is set up to stagger sideways through the brown channel.

Dollar bulls will win above the 50-day MA at 96.16 and dropping and the dollar bears will win under the 200-day MA at 92 and rising. These critical moving averages are squeezing in so the dollar will have to make a decision over the next month or two. The USD may stumble sideways through 92-97 through the summer. As this is typed, the dollar index drops to 93.76 this morning and the euro pops above 1.14. ECB President Draghi wants a weaker euro to stimulate the economy (using QE). Fed Chair Yellen's dovish comments at the FOMC meeting yesterday creates the weakness in the dollar sending the euro higher. The obscene central banker intervention over the last six years has markets twisted up in knots. 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.

Gold Daily and COT (Committments of Traders) Charts

Gold remains in a trendless sideways pattern. This is verified by the ADX down at 10 showing no trend in place for price. The last strong trend was in March when price was dropping and the ADX was above 25. The gold daily chart indicators are all stumbling sideways not knowing which way to break. The RSI and money flow are at 50% the demarcation line between bulls and bears; ditto the MACD line at zero-ish. The blue sideways triangle is in play also verifying the ongoing sideways nature of price. The vertical side of the triangle is about 90 bucks so a big winner will be crowned one way or the other for the weeks and months ahead. If price breaks above 1200 the 1290 level is targeted. If price fails from 1160, gold will target 1070 below.

Gold is up to 1195 in current trading testing the 50-day MA resistance at 1194. Price is under the moving average ribbon so a mean reversion higher is in play. The 1160-1170 support area is key, however, and must be held by the gold bulls.

The COT chart shows the corresponding price highs and lows in price over the last year. The bars are moving towards the centerline which is consistent with a move towards a price bottom. COT data lags by a week or two, however. The edge has to be given to the gold bulls but the charts need to play out further and can be revisited in a couple weeks or so. If gold moves above the 50-day MA at 1194 that is a major victory for gold bulls and above 1200 the bulls will be celebrating. The US dollar index drops after Fed Chair Yellen's typical dovish talk at the FOMC press conference yesterday and this morning the USD drops through 94 to 93.77 sending gold 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.

Note: The COT chart is provided courtesy of COT Price Charts an excellent site and annotated by Keystone.

Wednesday, June 17, 2015

SPX 30-Minute Chart 8/34 MA Cross

The 8 MA is above the 34 MA on the 30-minute chart signaling bullish markets for the hours ahead. This is in conflict with the SPX under the 200 EMA on the 60-minute chart so one of them is wrong. Either the chart above turns bearish (8 under the 34) or the SPX will move above the 200 EMA on the 60-minute chart and the outcome will tell you market direction for the short term ahead. The red lines are in negative divergence favoring the bearish outcome in this short term time frame. This information is for educational and entertainment purposes only. Do not invest based on anything you read or view here. Consult your financial advisor before making any investment decision.

Note Added Thursday, 6/18/15, at 11:02 AM:  The SPX launches higher to 2119 with the SPX far above the 200 EMA so the bulls win.

SPX 60-Minute Chart 200 EMA Cross

The SPX continues the fight for the 200 EMA on the 60-minute at 2102.27. Price is under the 200 EMA signaling bearish markets for the hours and days ahead but flip a coin in these markets. Bulls and bears are duking it out with no clear winner as yet. Bulls win big above 2102.27. Bears win big under 2102.27.

The chart above is in conflict with the 30-minute chart that shows the 8 MA above the 34 MA signaling bullish markets for the hours ahead so one of them is wrong. Either the chart above turns bullish or the 30-minute chart will turn bearish (8 MA under the 34 MA) and the outcome will tell you market direction for the short term ahead. 

The green lines for money flow and very short term on the MACD line show long and strong behavior wanting another higher high. Price may want to come up to test today's high at 2107 again. Price will roll over when the neggie d (red lines) are universal across all the indicators. This information is for educational and entertainment purposes only. Do not invest based on anything you read or view here. Consult your financial advisor before making any investment decision.

Note Added Thursday, 6/18/15, at 11:03 AM:  The SPX launches higher to 2119 with the SPX far above the 200 EMA so the bulls win.

Keystone's Evening Nightcap 6/17/15; FOMC Rate Decision, Forecasts and Fed Chair Yellen Press Conference Play by Play

(As always, the trading day's price action is explained on Keystone the Scribe's site. Reference Keystone the Scribe for further color and detail including the entire day's chronology and jump-start on tomorrow.)

Picking up the action shortly before the FOMC announcement;

At 1:30 PM EST (8:30 PM in Greece), thousands take to the streets in Athens with worries of violence increasing as night falls. The bailout crisis is reaching a peak likely this weekend with only days remaining before the large debt payment is due to the IMF. Greeks are concerned about what will happen to their country if a default occurs.

At 1:35 PM, the US 10-year yield is 2.39% taking out yesterday’s high yields. USD 94.90.

 Moving into the Fed decision at 1:54 PM, SPX 2091. INDU 17864. COMPQ 5048. RUT 1268. VIX 15.34. Euro 1.1255. Euro/yen 139.83. Dollar/yen 124.24. Pound 1.5731. USD 94.92.

WTIC oil slips under 59 to 58.99. Brent oil 62.72 well off the high above 65 this morning. Natural gas 2.85. Gold 1179. Silver 16.01. Copper 2.6120.

US Treasury yields are; 2-year 0.73%, 5-year 1.73%, 10-year 2.39%, 30-year 3.12%. German bund 0.812%.

At 1:58 PM, the insider traders must know something with stocks jumping higher. SPX 2094. INDU 17889. COMPQ 5053. RUT 1269. WTIC oil 59.11. Gold 1178. 2-year yield 0.73%. 10-year yield 2.39%.

At 2 PM EST, the FOMC leaves rates unchanged as expected. The Fed upgrades the economy modestly and says there is progress towards meeting the rate hike criteria. The pace of job gains increases. Unemployment is steady. The Fed says there is moderate growth in household spending. Business fixed investment is soft and exports are soft. Energy prices are stabilizing. VIX drops to 15.03 sending stocks higher. The SPX jumps to 2100.

The Fed statement contains no explicit wording on when the first rate hike will occur but the member forecasts, the dot plot, indicates that 10 members are looking for a 0.63% or higher funds rate this year (which would be two rate hikes by the end of the year) and 15 members are at 0.38% (at least one hike this year).

At 2:03 PM, the US dollar index is dropping. USD 94.64. VIX 14.71. 2-year yield 0.69%. SPX is above 2100. The initial reaction by traders is that the Fed remains dovish with no firm plan on when to hike rates despite members predicting at least one hike, or more, this year.

At 2:05 PM, USD 94.68. Treasury yields are; 2-year 0.71%, 5-year 1.69%, 10-year 2.363%, 30-year 3.11%.

At 2:07 PM, the four major indexes are up uniformly +0.3%. VIX 14.53. TRAN -0.7%. Euro 1.128. Dollar/yen 123.94. WTIC oil 59.43. Brent oil 63.20. 10-year yield 2.35%.

At 2:09 PM, the SPX peaks at 2102 and begins retreating lower. Gold 1181. WTIC 59.72.

At 2:17 PM, SPX 2100. INDU 17936. COMPQ 5064. RUT 1261. US 10-year yield is 2.32%. German bund 0.812%.

At 2:30 PM, Fed Chair Yellen takes the stage and reads a prepared statement. The SPX pops from 2095 to 2099. Yellen, Queen of the Doves, says, “Conditions for a rate hike are not yet achieved.” Yellen says progress is occurring towards maximum employment. USD 94.65. In her characteristic talking out of both sides of her mouth, she says, “Weakness in the labor market remains.”

Yellen says inflation runs below target. 10-year yield 2.35%. WTIC oil 59.77. SPX 2099. INDU 17928. COMPQ 5062. Yellen says committee participants are reducing their growth rate forecasts. She says, “Downward pressure on inflation (deflation) is abating.” Transitory factors have impacted the economy. USD 94.58. WTIC 59.83. 2-year yield 0.68%. 10-year yield 2.33%. Gold 1183.

At 2:40 PM, as Yellen continues with the statement, the SPX is back to 2102 at the highs directly after the 2 PM announcement and moving higher. INDU 17943. USD 94.50. VIX 14.43.

At 2:43 PM, SPX 2104. VIX 14.34. Dovish Yellen knows how to pump stocks higher. There are no plans for a rate hike so stocks jump higher. Yellen says the first hike is data dependent continuing to kick the can down the road.

The Q&A continues and Yellen is asked why member forecasts point to one or two hikes this year but her comments remain reserved. SPX 2105. Yellen keeps singing the “data dependent” song. All Hail Yellen, Queen of the Doves, and champion of the wealthy in America that own large stock portfolios that are filthy rich from her dovish policies. To Hell with the middle class and poor. Let them eat cake.

At 2:47 PM, SPX 2107. The SPX gains 16 handles from before the announcement at 2 PM. The wealthy elite high-five each other and order caviar and champagne for tonight’s celebration. The Dow is up 80 points. USD 94.38. Since Yellen says the conditions are not met to justify a rate hike, stocks move higher.

At 2:50 PM, as the question period continues, SPX 2105. INDU 17979. COMPQ 5076. RUT 1271. Interestingly, the Russell 2000 small caps do not take out the highs from 2:10 PM after the initial announcement but the S&P 500, Dow and Nasdaq does. The VIX is at the day’s lows at 14.14 providing bull fuel.

At 2:55 PM, SPX 2106. VIX is 14.11 printing new lows. 2-year yield 0.665%. 10-year yield 2.31%. USD 94.30.

At 2:56 PM, Yellen keeps tap-dancing around the soft-ball questions. Reporters provide no follow-up or rebuttal to her answers. They sit there like puppy dogs lapping up her answers. VIX drops to 14.08. SPX 2106. TRAN -0.3%.

At 2:58 PM, Yellen is asked if a rate hike will occur this year. She says most participants feel a rate increase this year is appropriate. VIX 14.11. Yellen says ‘we could see data ahead that would justify the dot plot projections but no decision has been made on the timing of the first rate increase’. She follows up saying, “Certainly a rate increase is possible this year.” SPX 2105.

At 3 PM, Yellen says ‘independent of the timing of the first hike in September or December or March, the rise will be gradual’. VIX 14.13. SPX 2104.

At 3:03 PM, VIX 14.19. SPX 2103. Yellen says, “We will respond to incoming data.” At 3:04 PM, VIX 14.26. SPX 2103. The four major indexes are up +0.3%. Euro 1.1332. Dollar/yen 123.36. Pound 1.5822. WTIC oil 59.94. Gold 1187.

At 3:07 PM, the Q&A continues. VIX 14.30. SPX 2102.

At 3:08 PM, the SPX is 2103 fighting against the overhead resistance 20-day MA at 2106 and 50-day MA at 2104. Thus, the 2104-2106 level is a key pivot with market bulls winning big above and bears winning big below.

At 3:11 PM, VIX 14.42. SPX 2101. Yellen better quit while she is ahead. Yellen is questioned on Greece and if it is impacting her decision on the first rate hike. Yellen hopes the European leaders will find a way to resolve the Greece situation. She says if a resolution is not achieved global markets will be disrupted. VIX 14.39. SPX 2103.

XLE -0.1%. Materials are strong. XLB +0.5%. XLF flat. Consumer discretionary moves higher since higher stock prices, that benefit the wealthy, will continue supporting luxury spending. XLY +0.5%. Consumer staples are higher as traders buy defensive stocks that provide a dividend. XLP +0.6%. Homebuilders trade lower. XHB -0.2%. XLV +0.2%. Rates drop so utilities move higher. XLU +0.8%. TRAN -0.3%.

At 3:18 PM, VIX 14.26. SPX 2105. Euro 1.1358. Dollar/yen 123.24. Pound 1.5845. 10-year yield 2.317%.

The press conference ends at 3:30 PM. Stocks popped at 2 PM on the initial announcement, then retreated slightly, then ran higher once Yellen began speaking. The takeaway is that the Fed would like to hike rates this year but remains noncommittal the same position as before the FOMC drama this afternoon. Those looking for a firm strong hint as to when rates will begin moving higher are disappointed but the ongoing dovishness provides lift to stocks.

At 3:33 PM, VIX 14.15. SPX 2103. INDU 17957. COMPQ 5072. RUT 1270. The major indexes are up uniformly +0.3%. Euro 1.1335. Dollar/yen 123.37. Pound 1.5828. WTIC oil 59.82. Brent oil 63.67. Gold 1187. Silver 16.19.

Treasury yields are; 2-year 0.65%, 5-year 1.62%, 10-year 2.31%, 30-year 3.086%. The 2-10 spread is 166 bips indicating a steepening yield curve after the FOMC.

Minutes into the closing bell, the SPX is at 2100 off the highs. Greece PM Tsipras announces plans to meet with President Putin on Friday. The Greece bailout games continue.

The day ends with the SPX gaining 4 points, +0.2%, to 2100. The Dow gains 30 points, +0.2%, to 17935. The Nasdaq is up 9 points, +0.2%, to 5065. The RUT gains 1 point, +0.1%, to 1268. VIX 14.50. USD 94.26. 

Keybot the Quant Turns Bullish

Keystone's trading algo, Keybot the Quant is back on the bull side. More info is found at Keybot's site;

Keybot the Quant

Monday, June 15, 2015

Keybot the Quant Turns Bearish

Keybot the Quant flips bearish this morning at SPX 2080. More information is found at Keybot's site;

Keybot the Quant

Friday, June 12, 2015

SPX 60-Minute Chart 200 EMA Cross

The SPX drops under the 200 EMA on the 60-minute at 2105.45 signaling bearish markets for the hours and days ahead. Price closed exactly on the 200 EMA on Wednesday and in Thursday trading the bulls ran higher above the 200 EMA so it looked like a slam dunk for higher equities. Today, however, is a different story as the SPX collapses through the 200 EMA.

The green lines show the oversold conditions, positive divergence in the indicators and falling wedge pattern that conspire to create the recovery rally, which occurred starting on Tuesday. The top and high print yesterday comes with overbot stochastics and some negative divergence (red lines) but technically the top is shaky. The RSI never reached overbot territory and the MACD line kept moving higher with the price high seven candlesticks ago; so the expectation would be for price to come back up again, which it did, but it did not come back up for a matching or higher high as would be expected. The bears would be better off if price came back up to 2115 three candlesticks ago to place a more firm market top. Thus, the door remains open for another rally move higher for stocks. This would be in concert say with a potential Greece bailout resolution this weekend or early next week. The SPX 2-hour chart is showing the same behavior as described so the price move lower to begin today is met with a bit of skepticism.

The uber low CPC and CPCE put/call ratios signal a market top at anytime over the coming days so the bulls may pull a tricky maneuver and bring the SPX higher again especially if the Greece bailout drama is resolved. For now the bears are in charge. Use the 200 EMA at 2105.45 as the line in the sand. Bulls win big above 2105.45. Bears win big below 2105.45. The SPX recovers as this message is typed now printing at 2100. 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 Ratios Daily Charts Signal Significant Market Top

The CPC and CPCE put/call ratios signal rampant complacency in the stock market and a significant top at hand. Traders are drinking Fed wine each day and mainlining ECB crack cocaine into their veins buying stocks regardless of price partying like its '1999'. Cue the Prince music. Traders see no reason to worry since global central bankers control the markets and they keep printing money sending stocks higher to benefit the wealthy elite class that own large stock portfolios.

The uber low put/calls signal a significant market top at hand at anytime over the coming days. The low CPC on 5/11/15 resulted in the market top about seven days later where the SPX dropped from 2035 to 2072; 63 handles. Last summer the low CPCE resulted in a market top in July and drop in the SPX from 1991 to 1905; 86 handles. Watch your wallet. Ditch the longs and begin scaling into the short side as the days ahead play out. Of course the central bankers can always pump stocks higher at anytime and a resolution to the Greece bailout drama would also create a pump higher in equities but these bounces, should they occur, can be shorted into since the uber low put/calls indicate complacency is off the charts and a market pull back to bring trader's attitudes back to earth is desperately needed. 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.

Wednesday, June 10, 2015

Keybot the Quant Turns Bullish

Keystone's proprietary trading algo, Keybot the Quant, flips long this morning shortly after the opening bell at SPX 2094. The stronger chip stocks and lower volatility create the upside juice. Bears need either GTX under 3232 or VIX above 14.28 to stop the market upside. Otherwise, stocks should continue floating higher. More information is available on Keybot's site;

Keybot the Quant

TRAN Dow Transports Daily Chart in -10% Correction

The Dow Transports Index dips into -10% correction territory joining the Dow Utilities Index. The all-time high for trannies is 9269 on 11/25/14 and all-time closing high at 9217 on 12/29/14 so a -10% correction is the 8342 and 8295 levels respectively. Both are violated in yesterday's trading although TRAN recovered slightly to end the session at 8307.

For this year the TRAN high is 9244 on 2/25/15 and closing high 9178 on 2/24/15 which yields -10% correction numbers at 8320 and 8260, respectively. The LOD yesterday, 6/9/15, is 8256 under all the -10% levels highlighted sending trannies into correction mode joining the utilities.

From a Dow Theory perspective, the Transports never confirmed the upside rally in stocks with the Industrials. The Dow Industrials printed new all-time highs this year but the Transports have not. 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.

Tuesday, June 9, 2015

NYA NYSE Composite Weekly Chart 40-Week MA Cross and NYSI NYSE Summation Index Weekly Chart

One of Keystone's important cyclical market indicators is the 40-week MA cross on the NYA. The market bears created a failure this morning under the 10888 threshold but the bulls fight back and prevent the negative cross from occurring--for now. Thus, the stock market remains in a cyclical bull market pattern with the NYA price above the 40-week MA but the action requires close monitoring moving forward. Failures have occurred since the October selloff but the central bankers, that control the stock market, come in with loads of liquidity to pump stocks higher and prevent the negative crosses from sticking.

The NYSI summation index dips under zero and in the past this identifies where stocks stage a recovery rally. The only question is will the bounce occur immediately or will stocks fall down the rabbit hole first and then recover. When the NYSI recovers and moves higher that will be the tell so monitor it closely in the days ahead.

Keep an eye on these market metrics. Equities are in major trouble if the NYA lsoes the 10888 level. Bulls are fine if they maintain the NYA above the 40-week MA. Watch for where the NYSI bottoms to provide insight into where the market bottom occurs. As this  message is typed, the NYA recovers to 10928 now 40 points above the danger line. 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.