BPSPX S&P 500 Bullish Percent Index Daily Chart

For the BPSPX, the 6 percentage-point reversals are key and also the 70% level. In August, the BPSPX reverses 6 points from 64 to 70 which is a buy signal. This level also happens to be the important 70 level which is a double-whammy buy signal and stocks never look back into this year.

The BPSPX tops at 83.3 so taking away 6 is 77.3 the level where a market sell signal is triggered. If BPSPX fails at 77.3, then fails at the 70 level, that would be a double-whammy sell signal and big trouble for the stock market. Equities would be falling in earnest.

For now, the bulls remain in charge based on the BPSPX. The market bulls need to keep the BPSPX above 77.3 and that will keep the stock market bumping along sideways with an upward bias. 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.

NYSI McClellan Summation Index and NYA NYSE Composite Daily Charts

The NYSI is staggering sideways like a drunk in Times Square on Saturday night. The 20 and 50-day MA crosses are verification signals for the trend ahead. You want to see the 20 MA move at least 1% beyond the 50 MA before you are completely sure of the direction move. The 20/50 MA cross is a lagging indicator as the chart clearly shows. The 20-day MA is at 660 far above the 50-day MA at 534 giving the upper hand to the bulls.

Market bears need the NYSI price line to drop below the 20-day MA since this will curl the 20 downwards and move the 20 down towards the 50 for a potential negative cross. 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 Daily Chart

The uber multi-month low in the TRIN firmly verifies the market advancers far outpacing the decliners. When the stock market is joyous and trading higher, the TRIN drops. A TRIN in the 0.8-ish area represents steady-eddy buying that may continue. Once the TRIN continue slower under 0.7, the buying is off-the-charts and out of hand. A mean reversion back to the sell side is desperately needed. The TRIN collapses to 0.49 verifying the market euphoria and extreme bullishness.

When stocks sell off, the TRIN rises. A TRIN around 0.8 to 1.0 is steady-eddy selling that may continue. When the TRIN moves above 1.2, the selling event turns into panic. If the Trin spikes far higher to 1.5, 2, 3 and higher, that represents blood in the streets with traders jumping out of windows; hopefully they are on the first floor. The panic is a great buying opportunity to go long stocks.

Now, however, we are on the opposite side of the spectrum in the uber bull euphoria area so some selling in equities would be expected going forward.

Another useful tool is the 10 MA for the TRIN. The 0.8-ish level (0.80-0.85), where the blue line is at now, represents robust bullishness in the stock market and a mean reversion lower in equities would be expected. When the 10 MA sneaks up towards 1.2 (1.1-1.2) that is a buy signal for stocks since negativity will be too ingrained in the market pysche. 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.

VIX Volatility Daily Chart

The epic market action continues with the VIX now above the critical 200-day MA for nine consecutive days! 99% of the time the S&P 500 would have already tracked at least 20 to 40 handles lower; instead stocks make new highs day after day.

Watch this historic action closely since in your lifetime you will likely never see this again. These are not your grandfather's markets. Either volatility gives up the ghost and collapses lower, under the 200, paving the way for more record stock market highs, or, the stock market finally takes heed of the VIX warning and a long-awaited sell off in equities begins. The low CPC and CPCE put/calls have yet to receive their pound of bull flesh. 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.

CL Crude Oil COT (Commitments of Traders) Weekly Chart

The COT chart was shown a week ago where it was beginning to become overstretched open to a move lower in oil prices. il bounces price around sideways with an upward bias and now the COT chart is extremely extended. The red circles show the recent tops in oil prices. What do you think will happen? If oil pulls back that hints that the US dollar index may float 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 by COT Price Charts and annotated by Keystone.

SCO Ultrashort Crude Oil ETF Daily Chart; Oversold; Falling Wedge; Positive Divergence; Lower Band Violation

Oil has been on a strong run higher over the last few months as evidenced by SCO, the 2x short oil ETF, falling like a rock. As posted about a week ago, the crude oil COT chart indicates a near-term top in oil is at hand.

The daily chart show oversold RSI and stochastics which woul dlike to see a bounce. Money flow comes off oversold levels. The green falling wedge is a bullish pattern where price typically launches higher (the opposite of a rising wedge which typically creates a crushing spankdown). Price is extended to the downside for SCO requiring a mean reversion higher.

The lower standard deviation band was violated so price needs to show the middle band, the 20-day MA, at 22.31, and falling, some respect. The green lines show universal possie d across all indicators so a bounce is expected in this daily time frame.

The SCO weekly chart is in the same shape with universal possie d so price will want to float higher over the coming weeks (oil lower). On a weekly basis, SCO may want to relax to the same matching lows after a little bounce occurs in the days ahead due to the chart above, but the weekly chart is basing and the rise in SCO going forward should continue for a few weeks. Thus, crude oil is topping now and will likely track lower over the next few weeks.

The expectation is for SCO to rally over the coming days and week or three targeting 21.20-22.50. SCO may receive a quick pop as the week begins and then relax lower again which would be another buying entry. If nimble enough, and if the initial spike is large enough, the long trade can be exited, and then wait for price to relax a little bit and then buy SCO again and perhaps hold if for a week or three. Keystone does not have a position in SCO currently but will probably buy some going forward and play around in this short oil arena for the next three weeks. 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 2-Hour Chart; Overbot; Rising Wedge; Negative Divergence; Upper Band Violation; Price Extended

The SPX 2-hour chart is cooked. The red lines show universal negative divergence across all indicators so a spankdown is on tap. The RSI and stochastics are overbot and have been for a few days agreeable to a pull back in price. Ditto the rising wedge. Ditto the upper band violation that needs to correct to the middle band at 2834 and rising. Price is also extended above the moving averages needing a mean reversion lower. Comically, with all this universal bearishness, stocks print record highs. The SPX prints a new all-time record high at 2855.46.This is rare and epic market action.

So stocks should sell off as the day plays out into the weekend. Marrying this 2-hour chart with the daily chart says price may have to come back up again after a selloff for a few 2-hour candlesticks (a day or three). The 2-hour chart will be useful to see where the top occurs that the daily chart predicts will happen any time in the days ahead.

The top band is at 2860-2861 and must be respected so it is a question of whether the stock market peters out now and begins dropping, or if it can hang on for a couple more hours and stick this VST top at the 2860-2861 level.

The forecast is for a drop now down to 2830 say by Monday or Tuesday, then back up for either a day or two, or it may just be a wild intraday spike higher, which will likely place THE top for the daily time frame, say next Wednesday, and then stocks should finally receive a multi-day selloff, perhaps a week or two, that will take the SPX probably 40 to a 100 handles lower. The SPX daily chart hints that the top in the daily time frame is very close. 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; Overbot; Rising Wedge; Negative Divergence Developing; Upper Band Violation; Price Extended

Waiting for the top in stocks is like waiting for Godot. The upside momentum is strong. New highs create new highs. Remember, the top is not in on the daily chart until that MACD line goes neggie d.

Same stuff going on as explained previously. Overbot RSI and stochastics are agreeable to a pull back. The red rising wedge is bearish. Price is extended above the moving average lines needing a mean reversion lower. Price has violated the upper band and desperately needs to touch the middle band, which is also the 20-day MA, at 2771 and rising. Since the SPX has not back-kissed the 20 since November, when stocks roll over this downside target at 2771-2800 should be very likely.

The chart indicators are all negatively diverged wanting to spank price lower sans the MACD that is still sloping higher; long and strong. So the likely outcome is down for a day or two but then back up again for a matching or higher high in price when the MACD will likely show neggie d identifying THE top in the stock market in this daily time frame. A long overdue pullback will then begin in the daily time frame.

Since the pullback is overdue, one potential outcome is the pullback say starting today and early next week, then the move back up to satisfy the long and strong MACD may be a short-lived intraday price spike up to the record highs from which equities will begin rolling lower. The top is very very close now as you can see above.

It may be worthwhile to look at the SPX 2-hour chart to see how the top/s form in the VST time frame. This is a futile task until the momo exhausts itself on the daily chart but that is close now. Note the selling volume candlesticks are higher than the buying candlesticks; this is the smart money sneaking out the back door selling shares to Timmy Tech that can hardly wait to brag at the office water cooler that he owns Facebook, Amazon and Netflix shares. The nice money manager offered shares and told him that he was making a great decision buying the hot FAANG stocks. In a few months the money manager will tell Timmy that he should think of his investments as long-term holds.

Thus, forecast would be for a top in stocks in this daily time frame over next one to three days then down to the 2775-2800 target zone. The low CPC and CPCE put/call ratios would finally be granted the pound of bull flesh they have been waiting for over the last six weeks. Watch that MACD 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.

CPC Put/Call Ratio Daily Chart Signals Near-Term Top

The rare and odd market action continues. The CPC put/call ratio collapses to the uber low 0.64 continuing to signal rampant and out-of-control complacency and fearlessness in markets. The euphoria is off the charts. No one expect stocks to sell off ever again.

Especially odd is how the put/calls have remained low for the last seven weeks without stocks dropping. This is a head-scratcher and unprecedented behavior. The last bottom in stocks was marked by the 1.12 high print which is not high at all. Typically, you want to buy the stock market when the CPC moves above 1.20 which signals fear and panic in markets.

This behavior may hint that the drop will be substantial since it is pent-up and spring-loaded. Typically, when the CPC and CPCE put/call ratios drop to uber lows, the SPX will sell off about 40 to 80 handles then when the put/calls move higher showing fear, stocks recover and rally again. There has not been any significant selloff in stocks since the uber low put/calls began triggering in late November. This is strange. The expectation would be for a pullback of 40 to 150 handles in the SPX beginning in the days ahead.

The VIX is above the 200-day MA for six days running and stocks keep printing record highs. This is rare behavior.

This morning, US Treasury yields are moving higher while the US dollar index moves lower. The oddities in the markets are everywhere. Something likely has to give. The market bulls will win the game if they push the VIX below 10.83. Bears win if they keep the VIX above 10.83 and moving 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.

VIX Volatility 2-Minute Chart Displays Flash Spikes and Flash Crashes

Wild flash spikes and flash crashes are occurring in the VIX volatility index. At the opening bell for the regular session on Tuesday, 1/23/18, the VIX shot higher to 11.57 then immediately collapsed to 10.86. At 10:10 AM, the VIX flash spikes from 11.00 to 11.57 then immediately retreats to 10.90. At 10:56 AM, the VIX flash spikes from 10.88 to 11.40 then immediately flash crashes back to 10.88. These three moves are generally up and down about 7% each time with each occurring in only a couple minutes time. The odd market behavior continues.

The VIX is at 10.87 remaining above the important 200-day MA at 10.83 but the battle continues. Market bulls win big under 10.83. Market bears win big if the VIX stays above 10.83 and moves higher above 11 towards 12. 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.

VIX Volatility and SPX S&P 500 Daily Charts

The VIX chart illustrates some of the odd behavior occurring in the stock market lately. The VIX has been above the 200-day MA at 10.83 for five consecutive days but the stock market keeps printing record highs. This is very rare behavior.

The VIX 200-day MA is a useful short-term stock market signal. Bears win above the 200 and bulls win below. In November, the VIX pierced the 200 to the upside that is the exact top in the SPX which then retreated about 40 points. When the VIX fell back below the 200 that was the buy signal on 11/20/17 and stocks rally higher.

In late November early December, the VIX again pierces the 200 to the upside marking another top which led to a 40-point intraday drop. As soon as the VIX dropped back below the 200 in early December the bulls began charging higher again.

The VIX pierces the 200 to the upside last Tuesday. A stock market selloff occurs but if you blinked or went to the can you missed it. The VIX remains above the 200 so stocks should sell off until the VIX drops below the 200 to signal the all-clear for another rally. Nope. This tried and true relationship, that is sure as the sun rising each day and then giving way to the moon, is violated. This behavior is rare.

The VIX should have dropped under 10.83 two or three days ago considering the non-stop all-time record highs occurring in stocks.

The VIX is above the 200-day MA for five consecutive days and yet no selloff in stocks. Note the candle for yesterday, Monday, 1/22/18. Price came down to 10.84 tapping on the 200 and then recovering. As this is typed one hour before trading in the Tuesday regular session in the States, the VIX is at 11.04.

Something has to give. Either the VIX has to drop below 10.83 to prove that more upside record highs are guaranteed, or, the VIX will continue higher to 12 and 13 which will spank equities lower finally providing a selloff in the stock market. VIX 10.83 dictates whether the bulls, or bears, win today. 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; Overbot; Rising Wedge; Negative Divergence Developing; Moving Average Ribbon Shows Price Extended

The stock market upside drama continues as we wait for the daily chart to go neggie d to identify the top. The money flow sneaks out a tiny higher high but that should roll over today. The RSI, histogram and stochastics are negatively diverged wanting a pull back which may occur today. Ditto the overbot RSI and stoch's. The rising wedge is also bearish. That pesky MACD line continues higher, however, and wants the SPX to come back up for another price high after any pull back occurs.

On Friday, 1/19/18, the SPX prints the all-time intraday high at 2810.33 and all-time closing high at 2810.30.

The CPC and CPCE low put/call ratios continue to want a big selloff but the bulls keep using momentum to stretch out more highs. The moving average ribbon show how far price is extended which desperately needs a mean reversion lower. The SPX needs to back kiss the 20-day MA at 2731 and rising, at a minimum, going forward. The bullish strength is truly remarkable and epic.

Market bears need the MACD line to print negative divergence before THE top in the daily time frame is in. The negativity in the chart may slap stocks lower the next day or two. The US government shutdown drama continues and news bites will move markets. Global markets may idle sideways this week until ECB's King Draghi brings the tablets down from on high on Thursday morning and tells global investors how to trade. 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 Support, Resistance (S/R), Moving Averages and Other Important Levels for Trading the Week of 1/22/18

SPX (S&P 500) support, resistance (S/R), moving averages and other important levels are provided for the trading week of 1/22/18. Levels shown in bold are strong resistance and support. Bold and underlined levels are very strong and important S/R.

The all-time record high print for the S&P 500 is 2810.33 on 1/19/18 and the all-time closing high is 2810.30 on 1/19/18. The all-time record intraday low is 666.79 (the infamous 666) on 3/6/09 and all-time closing low is 676.53 on 3/9/09.

Former Federal Reserve Chairman Bernanke implemented QE1 in March 2009 to save the US stock market and protect the wealthy elite class that own large stock portfolios. Nine years later, the global central bankers continue colluding and coordinating their obscene Keynesian policies sending world stock markets to all-time record highs. The central bankers are the market.

For 2018, the intraday high is 2810.33 and closing high is 2810.30. For 2018, the intraday low is 2682.36 from the first trading day of the year on 1/2/18 and the closing low for this year is at 2695.81 on 1/2/18.

The upside orgy in the S&P 500 continues fueled by central banker easy money, reduced regulations, especially on the banksters, and the tax-cut bill. Everything is going the bull’s way. Friday, 1/19/18, was the highest print in history for the SPX. These are epic and historic times.

The S&P 500 remains at nosebleed levels in uncharted territory. Price is extended way above the moving average ribbon so a mean reversion lower is desperately needed. The SPX needs to back kiss the 20-day MA at 2732 and rising. The SPX has not yet sold off with the low CPC and CPCE put/call ratios so a retreat in the SPX is overdue. Nonetheless, the bulls keep using momentum to create more momentum. New money floods into the stock market this year.

S&P futures are flat to lower to begin the week. The opening bell is a couple hours away. The US government is in shutdown waiting for lawmakers to vote on a spending bill to stop the shutdown at 12 noon EST so that is the next focal point for traders. The BOJ rate decision is tomorrow but no change is expected. The easy money will continue. The World Economic forum begins in Davos so markets will react to news bites from the global bigwigs this week. The big event is the ECB policy meeting Thursday morning; this is the Superbowl. King Draghi’s comments will move markets.

The stock market is sanguine over the government shutdown but if the vote fails at noon, the mood may grow dark. This will make for an interesting close to European indexes that finish at 11:30 AM EST.

Strong support is at 2803. If this fails, the 2298 support will be tested and if that fails, price will seek 2768-2770 S. The bulls have momentum in their camp. Markets are in a Bradley turn window right now where a trend change in stocks is on the table. Bradley’s result in either trend reversals or a wildly strong acceleration move in the current trend. There was a Bradley turn on 1/4/18 which resulted in the stock market melt-up. You would think this acceleration behavior would not repeat a couple weeks later for the 1/17/18 Bradley date but in these markets who knows? There are only three Bradley turns for the entire year and two are this month; the other is in June.

The strongest support/resistance for the SPX (S&P 500) is 2810, 2803, 2798, 2770, 2753, 2751, 2748, 2743 and 2719.

Note: If the list below displays any blank spaces, view it in the Google Chrome browser. If you experience any difficulties viewing the blog sites or in disabling Adblock, you have to view the site in Google Chrome. The data is current up through 1/21/18.

2830

2820

2810 (1/19/8 All-Time Intraday High: 2810.33) (1/19/18 Intraday High for 2018: 2810.33) (1/19/18 All-Time Closing High: 2810.30) (1/19/18 Closing High for 2018: 2810.30)

2810.33 Previous Week’s High

2810.33 Friday HOD

2810.30 Friday Close – Monday Starts Here

2808

2807

2806

2803

2802

2799

2798.08 Friday LOD

2798

2793

2778

2776

2770

2769

2768.64 Previous Week’s Low

2768

2759

2753

2751

2749

2748

2749

2748

2746

2743

2738

2736

2731.79 (20-day MA)

2731

2729

2728

2724

2719.33 (200 EMA on 60-Minute Chart a Keystone Market Turn Signal)

2719

2714

2713

2700

2698

2696

2696 (1/2/18 Closing Low for 2018: 2695.81)

2695 (12/18/17 Intraday High: 2694.97)

2693

2688

2686

2683

2682 (1/2/18 Intraday Low for 2018: 2682.36)

2681

2679

2676

2674 (12/29/17 Intraday Low; 2673.61)

2672

2670

2668

2666

2665.57 (50-day MA)

2665 (12/4/17 Intraday High: 2665.19)

2664

2663

2662

2661

2660

2659

2658

2657

2653 (12/13/17 Intraday Low: 2652.85)

2652

2651

2649

2648

2673.61 January and 2018 Begins Here

2646

2645

2644

2642

2641

2640

2639

2637

2635

2634

2630

2629

2628

2627

2626

2625

2620

2612.98 (20-week MA)

2606

2605 (12/1/17 Intraday Spike Low: 2605.52)

2601

2600

2599

2597 (11/7/17 Intraday High: 2597.02)

2595.47 (100-day MA)

2595

2591

2588

2585

2584

2580

2579

2578

2575

2573

2569

2567

2566

2564

2560

2555

2551

2549

2548

2547.18 (150-day MA; the Slope is a Keystone Cyclical Signal)

2545

2544 (10/25/17 Intraday Low: 2544.00)

2541

2540

2538.75 (10-month MA)

2538

2535

2534

2532

2530

2529

2521

2520

2519

2512

2510

2509.49 (12-month MA; a Keystone Cyclical Signal; the cliff)

2508.28 (200-day MA)

2508

2507

2503

2500

UST10Y 10-Year Treasury Note Yield Weekly Chart; 10-Year Yield Prints 2.642% Highest Since July 2014

The 10-year climbs to 2.642% overnight comparing back to July 2014 (blue line and circle). Apple is planning to pay a $38 billion tax bill and will likely sell Treasuries to raise the dough. This creates some of the lift in yields.

Bond king Jeff Gundlach said 2.63% was the line in the sand to call a new bond bear market so that level is hit. Bond king Bill Gross said 2.50% and higher was the line in the sand and we passed that to begin the year. The bond kings now say a bear market is ahead for notes and bonds (lower prices higher yields).

The September 2014 high yield was 2.62%. In early July 2014, the 10-year yield printed at 2.69%.  

The red lines show the negative divergence spankdowns in yields and the positive divergence bottoms are the green lines. Keystone called the tops in yields in late 2013 and in early 2017 and the bottom in 2016. The chart told you the direction forward.

Things are dicey over the last year. Yields dropped to near 2.00% but bounced due to the possie d with the histogram, stochatics and ROC. The stoch's were also oversold last August-September looking forward to a bounce in yields (lower prices higher yields). It occurs, however, note that the RSI and MACD line printed lower lows as price printed lower lows. That hints that yields needed to come back down after a rally but instead, yields continue higher through last year into this year now at 3-1/2 year record highs.

Yield takes out the double-top from one year ago which was at 2.62%. The September 2014 levels at 2.62% are also taken out. The 2.69% from early July 2014 offers up resistance going forward.

Over the last year, with yield now higher, the indicators show blatant negative divergence nowhere near the levels one year ago. There is some long and strong strength in the near term due to the momentum. The expectation is for lots of sideways chop through the year perhaps bumping along through 2.20%-2.80%. The inflationists and those expecting 3.00% may be disappointed as the year plays out. This information is for educational and entertainment purposes only. Do not invest based on anything you read or view here. Consult your financial advisor before making any investment decision.

RUT Russell 2000 Small Caps Daily Chart; Overbot; Rising Wedge; Negative Divergence; Upper Band Violation

The contrast between the Russell 2000 small caps daily chart and the S&P 500 daily chart is interesting and worth exploring. The red rising is an ominous pattern. The red lines show negative divergence as price makes new highs so RUT is out of gas. The upper band was violated at 1591 so price should venture back to the middle band at 1558.

Watch to see if the RSI prints a lower low, or not, and also if the RSI and stochastics drop under the 50% level into bear territory, or not. That will indicate the strength, or lack thereof, of the downside.

The purple box for the ADX shows that the uptrend in October and November was a strong trend but that petered out in December and the move higher in the small caps now is no longer a strong trend.

The bottom rail of that rising wedge pattern is key. An all-out collapse can occur if that trend line is lost at 1574-ish. If that fails, price will likely collapse directly to the middle band at 1558-ish. The RUT daily chart is far more negative than the SPX daily chart that still displays the long and strong MACD 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.

SPX S&P 500 Daily Chart; Overbot; Negative Divergence Developing; Upper Band Violation; Price Extended

On the SPX daily chart, we are waiting for the negative divergence to identify the top. The MACD line remains long and strong and not willing to negatively diverge as yet. This has to occur for the top to be in on this daily basis. The money flow is now long and strong so that will also need to go neggie d.

The RSI, histogram and stochastics are cooked and the red lines show the neggie d. Stochatics and RSI are overbot open to a move lower. Price is extended above the moving averages requiring a mean reversion lower. The upper band is violated so the middle band, the 20-day MA, at 2726 and rising, is on the table.

Note that price has not back-kissed the 20-day MA since November; this is a long time. Price remained elevated above the 20 for 6 weeks in September-October but now the SPX is above the 20-day MA for 9 weeks running. The SPX needs to show respect to the 20-day.

The ADX shows a strong upward trend in place. The uber optimism and bullish strength this year has created additional joy in the charts which will extend the elevated prices.

For now, in this daily time frame, the RSI, histo and stoch's neggie d will create weakness, as is occurring today, however, after a slump, price will want to come back up using the long and strong MACD line and money flow fuel. If those two indicators turn neggie d at that time, the top is in for this daily basis. The question is whether a short pull back lasts one day, two or maybe three or four days, before price is going to come back up for another high to satisfy the MACD line. The 2-hour chart can be used to see the extent of any downside move.

The low put/call ratios want their pound of flesh from the stock market so the move lower in the SPX, once it begins, may be quick and eye-opening. The SPX will top out as soon as the MACD rolls over at anytime in the days ahead and that may begin substantive downside of 40 to 120 S&P 500 handles.

Note the large selling volume candlestick for Tuesday versus the shorter buying candlestick for Wednesday's euphoric stock market rally.

The SPX weekly and monthly charts continue to show juice in the chart indicators so after the selloff in the daily basis, the SPX will come back up again to the record highs on the weekly basis. The beat goes on. 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 Daily Chart; SOX Prints New All-Time Record High Taking out the Dot-Com Bubble High

At 3 PM EST, today, Wednesday, 1/17/18, the semiconductors, SOX, prints above 1362, a record high, taking out the all-time high from 3/14/2000. This is a big deal. The semiconductors break out to new record all-time highs. SOX is up a huge +2.9% and prints at 1366.10 the highest number in history. Strike up the band. The bulls are unstoppable.

XLK +1.4%. SMH +2.9%. XSD +1.5%. IBM +3%. INTC +2.7%. MSFT +2%. ASML +7.7%. The memory chip cycle started in 2016 and continues. LRCX +7.3%. KLAC +5.7%. AMAT +5.2%. TXN +5%. NVDA +1.8%. MU +3.1%. AVGO +0.8%. QCOM -0.2%. 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 2-Hour Chart; Overbot; Negative Divergence; Upper Band Violation

Here is another look at the 2-hour as the quest for the market top continues. Price prints a matching high and the indicators turn neggie d so price receives a spankdown. The MACD was flattish so some buoyancy in price may linger for a candlestick or two.

The upper band was pierced so the middle band at 2766, and rising, is on the table. The 2-hour chart is bearish but remember the SPX daily chart. If you bring that up you can see that the MACD line and RSI are long and strong but the other indicators such as stochastics are neggie d.

On the daily chart, price will likely sink for a day or two, but then come back up to satisfy the MACD and RSI, and if neggie d is in play, that is the top in the daily time frame which leads to more substantive downside. The 2-hour above identifies the VST market machinations. So price is retreating which is agreeable with the daily chart but the daily chart wants another price high so that will bring the 2-hour chart back up probably after a day or two. 

Interestingly, the new moon peaks for the month in 8 hours at 9:17 PM EST. Stocks are typiclly weak moving through the new moon each month. The SPX may drift lower for a day or so but will likely come back up to satisfy the daily chart so THE short term top on the daily chart is likely Thursday through Tuesday. If an event or other catalyst occurs, that may take stocks down right away. The SPX may target that 2766-ish area over the next day or two then recover 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.

HSI Hong Kong Hang Seng Index Daily Chart Prints All-Time Record Closing High

Hong Kong’s Hang Seng Index explodes 566 points higher, +1.8%, to 31904.75 an all-time record closing high. The HSI is up +40.4% over the last year. The HSI closed at the high. The all-time high in the Hang Seng is 31958.41 from 10/30/2007 so the Hong Kong bulls have a little more work to do (another 53 points). The prior all-time closing high of 31638.22 from 10/30/2007 is taken out today.

The HSI is at an all-time closing high and at a one-decade all-time high. The bulls will be gunning for 31958 tomorrow. Traders are singing songs and celebrating the glorious stock market gains this evening with chop suey and rice wine.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.

VIX Volatility and SPX S&P 500 Daily Charts; VIX and SPX Diverging

There are many oddities occurring in markets now as historic price action continues. Since October, stocks continue higher in a parabolic move while the VIX does not move any lower.

Early in 2017, the Fed wine, ECB champagne and BOJ sake was flowing like water with stock moving higher and volatility lower. Oh, what a fantastic world that the central bankers can create. The central bankers maintain their jack boots on the throat of volatility for the last few years to sustain elevated stock indexes.

The bull train is motoring down the tracks with traders singing songs while switching out SPX 2300 hats for SPX 2400 hats and then SPX 2500 hats as October begins. The VIX moves lower with each higher price in the stock market as is expected. The VIX and SPX move inversely to each other and only move in sync less than 10% of the time.

In October, note how the stock market establishes a steeper upward-sloping channel with bulls tripping over each other buying stocks at the ask. That tiny top in stocks in early October occurs as the VIX bottoms. In November, the world changes. The SPX is moving higher but the VIX only prints a matching low; it should be lower.

Then as the stock market continues higher into this year, the VIX prints another low but only matching the prior lows and not lower. With the all-time record highs occurring in the major stock indexes, the VIX should be in the 8's. The VIX printed its record low the day after Thanksgiving in late November at 8.56.

The divergence between stocks going parabolic but the VIX flat hints that stocks are topping out. There is very strong momentum, however, driving price higher like a rocket.

The red circles show market tops and green circles are bottoms. Complacency and fearlessness occurs at the low VIX numbers so these bullish folks are taught a lesson while the high VIX numbers signal fear and panic and the time to buy is when there is blood in the streets. The bearish folks become too bearish at high VIX numbers and they are taught a lesson as the stock market bottoms and begins moving higher.

Stocks are rallying since the year began at that green circle. Oddly, the VIX collapses after that but the stock market refuses to top out. There was a one-day pull back this year but it was so minor that you missed it if you blinked. Going forward, the expectation is for stocks to pull back for a rest as the VIX suggests. Considering the odd action over the last two weeks, something wild may be on deck this 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.

EURUSD Euro to US Dollar Weekly Chart; 3-Year High for Euro; W Pattern Bottom

The euro is moving higher sending the US dollar index lower. A higher euro will hurt Germany's export-driven economy which is the economic engine of Europe. ECB President Draghi is more concerned with each tick higher in the euro.

Interestingly, however, Draghi's lieutenants are talking slightly hawkish to the media about QE ending in September. Draghi may be orchestraing a rise in the euro so he can ride in on a white horse this year professing dovishness which will bring the euro down and basically keep it on an even kilter all year long. The central bankers are in control.

The W pattern bottom occurs which is a very bullish setup and price breaks out at 1.14. The height of the W is 0.09 or 0.10 so adding this to 1.14 is 1.23-1.24. The euro is almost at the 1.23-1.24 target to satisfy the W pattern. The euro is at 1.12270 as this message is typed Monday evening in the States.

The ADX shows that the collapse in the euro in 2014 was a strong trend lower but in 2015 the euro recovered to begin the 2-year sideways channel. A price broke up and out from the W pattern bottom, the ADX shows that the trend is strong to the upside. The ADX is slipping now and that strong uptrend may evaporate.

The stochastics are overbot. The red lines sow neggie d wanting the euro to pull back lower to digest the gains. The euro has momentum, however, and momo always seems to pop price a bit higher as it tries to top. The euro may target that 1.23-1.24 area which also happens to be strong congestion from 2014. The euro is at levels not seen in three years.

The top standard deviation line is violated so the middle band at 1.185, and rising, is on the table going forward. The euro may chop sideways in this 1.22-1.24 area for a week or two, then weaken and roll over to the downside. The US dollar index moves inversely to the euro. 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.

WEN Wendy's Monthly Chart; Overbot; Negative Divergence; Upper Band Violation

The monthly charts for restaurateurs such as DRI, MCD and WEN are not well. A soiled napkin and half-eaten french fry is stuck to the dirty linoleum floor. The red lines show the negative divergence in play so a major top is forming. the DRI and MCD charts are similar and the same technical analysis can be applied to those monthly charts. Note, however, that MACD line is trying to squeeze out another sliver of upside joy.

WEN looks exhausted but the MACD line may create one more jog move, down one month or so, then back up to the vicinity of these highs, then, with the MACD line neggie d, the top is in and WEN should move sideways to sideways lower for the remainder of the year. Thus, say the significant top occurs anytime between now and April and these prices may not be seen again for many months even years.

The ADX purple box shows how the upside rally in WEN was one big party in 2014-2016 a very strong trend higher. That petered out in 2016 and over the last 6 months is trying to reestablish that strong upside trend. Considering the chart set-up with neggie d, and an upper band violation, and overbot stoch's and RSI, all bearish signals, the ADX may roll over lower going forward confirming that the strong upside trend is over. WEN can be shorted from current levels and higher. Keystone has not shorted it as yet. WEN should venture down to 13.5-14.5 this year.

Mickey D's has a bit more juice available on the monthly chart than DRI and WEN. DRI has violated its upper band on the monthly and and can drop 20 points this year. DRI and WEN will likely peak out with a multi-month top, perhaps multi-year, between now and April, DRI will likely roll over a touch sooner than WEN. MCD will peak out say in the March to June 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.