Stock chart patterns and technical analysis (TA) explained simply. Disclaimer: This blog and all its contents are for educational and entertainment purposes only. Do not trade or invest based on any information seen on this blog. Please read Terms of Service. The K E Stone blog sites (Keybot the Quant) are blacklisted by Google, so enjoy the ad-free experience, and only use the Donate button when supporting the sites.
The topping process in the daily time frame continues. It's like waiting for Godot. The S&P 500 bumps along sideways through 2780-2817 for the last six days. The technicals have wanted to take the SPX lower for the last week or sobut the happy trade talk and central banker dovishness creates euphoric upside joy to begin the year. The central bankers are the market. S&P futures are down -6 about an hour or so before the opening bell for the regular Thursday trading session. President Trump did not reach a deal with the tin-pot communist dictator Kim Jung-un but markets do not seem to care. The US-China trade talks and Federal Reserve and other central banker money-printing is far more important to markets. Price retreats for a couple days due to the neggie d with the RSI, histogram, stochastics and money flow. The overbot RSI and stoch's are agreeable to a pullback. Ditto the rising red wedge pattern. Ditto the upper band violation that has the door open to the middle band at 2747 and rising as well as the lower band at 2675 and rising. This is all bearish stuff. The 20-day MA at 2747 (same as the middle standard deviation band) comes up to form a confluence with the 150-day MA at 2747 and 200-day MA at 2749.Price may want to seek this price level as a back test. The S&P 500 desperately needs to show respect to the 20-day. The market bears must push the SPX below the 2747 level pronto to curl the 150-day MA lower, otherwise, the current cyclical bear market will develop into a cyclical bull market (the 150-day MA will slope higher). The uber low CPC and CPCE put/call ratios and elevated NYMO continue to want to see the S&P 500 sell off. This broken record continues playing in the background. It is an interesting top tick in price the other day. Note that it comes with negative divergence across the indicators (red lines) except, yes, the pesky MACD line. As price made the highest high, so did the MACD, it was not negatively diverging. Thus, the door has to remain open for another move up to 2800-2820 to make the matching high. At that time, should that occur, the MACD line should be neggie d and that will be the top (say today, or tomorrow, maybe even Monday). So the top is in now in the daily time frame or will be within a couple days. The day after the top tick, price came up to about halfway of the top-tick candlestick so you could say it was generally a matching price high which would create neggie d for the MACD and say the top is in now. This is a cheesy top, however, hence we will know over next day or two if this is the top or if price needs to come up to 2800 again today or tomorrow to create the top (for negative divergence you typically want to see a solid price high as indicators solidly slope lower). Keystone's 80/20 rule says 8's lead to 2's and 2's to 8's. Price closed above the 2780 level which opens the door to 2820. The SPX popped intraday up to 2817-ish at the high only 3 points away. If the SPX collapses from here, that was good enough for government work, otherwise, price may want to come up to kiss 2820. The upper standard deviation band is at 2819. The beat goes on. The top is in for the daily time frame either right now or will be once price sneaks back up to the 2800+ level over next day or so. The only thing that can change the scenario is more happy trade talk, or central banker pumping, or other happy news. The 2747-2753 is an obvious downside target. The 2680-2720 price support area may serve as a landing zone; it jives with the 100-day MA at 2684 and the lower standard deviation band working higher. The 50-day MA at 2634 was never respected with a back kiss so that remains on the table. The 10-month MA support is 2753. Think of this as a starting point for market trouble. Bulls will be okay if they keep price above 2753. Bears will begin growling strongly below 2753. The critical 12-month MA is at 2735 which is a key metric that says the stock market is in a cyclical bull market. You can watch the 150-day MA slope versus the 12-month MA cross to see if both confirm a cyclical bull, or, if conditions weaken, a cyclical bear market going forward. The 50-week MA support is at 2732. 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.
The drama continues with the near-term stock market top.Each time it wants to roll over, the central banks or the US-China happy trade talk pump equities higher. Friday was interesting as the MACD line flattened in the morning, then turned back into a long and strong posture after lunch but then fell back into negative divergence marking the top. At that point, President Trump ran to a microphone announcing big progress on the US-China trade talks and a meeting with President Xi in late March. Stocks held steady and did not rally as one would expect considering that the leaders will only meet if a trade deal was being finalized. In fact, stocks started to look soggy. Perhaps many traders figured if the leaders will not meet until late March the deal will not occur for another five weeks. Treasury Secretary Mnuchin then runs to a podium and proclaims more happy talk on trade but the stock market continued to bump sideways. President Trump stepped in during the last half hour of trading on Friday with an impromptu news conference where he kept pumping the trade talks. Stocks caught a bid into the closing bell jumping higher. The Trump pump is successful again. On that late-day Trump pump, the MACD line went back to long and strong (brown circle). Remember, the broken-record statement, the top is not in until you have universal neggie d. All the indicators are ready to push price lower except the MACD. So another jog move may occur, down one day, up the next day for another higher high, and at that time the MACD should finally be in neggie d to mark the top. Considering all the central banker intervention and trade deal happy talk that have supported markets since 1/3/19, equities can retreat now, falling under their own weight, or place their top say tomorrow or Wednesday squeezing out a slightly higher high (due ot the long and strong MACD). You have to see if Trump's happy talk today boosts the MACD, and perhaps the RSI, higher, or not. The low put/calls and elevated NYMO continue to want stocks to pull back in the near-term. The 150-day MA continues to slope negatively by a hair (pink box) so the cyclical bear market remains in play. The 20-day MA at 2725 and rising is coming up to meet the 150 and 200-day MA's both at 2748. Obviously, the 2748 carries a lot of clout going forward and should be shown respect with a back kiss. The 20 is coming up to meet the 150 and 200 about 2 or 3 days out so that 2747-2748 confluence area may act like a magnet for price in the days ahead, perhaps the first stop on a pullback in this daily time frame. Price has needed to back test the 20-day MA for several days. The SPX weekly chart remains long and strong so after a several day pull back occurs, due to the weak daily chart, the S&P 500 should rally again and come back up to the current highs on the weekly basis. 15 minutes before the US futures opened for trading Sunday evening on the East Coat, here comes King Donny again with a new decree. Trump says he will delay the Chinese tariff deadline this Friday, 3/1/19. Booiiiiinnnngg. S&P futures pop to +9 and remain elevated overnight. Crooked crony capitalism is always on full display. S&P futures are now up +11 as this message is typed about 5 hours before the opening bell for Monday's regular US trading session. Comically, Trump, that complained about China manipulating its yuan (renminbi) currency for the last 2 years, enters an agreement with the filthy communists that the US and China agree to manipulate the yuan to prevent it from weakening. That is hilarious. It will be interesting to see how the trade deal handles the intellectual property (IP) theft and the forced technology transfer issues. The chief US trade negotiator Lighthizer is at loggerheads with King Trump. Lighthizer is a staunch unrelenting hawk on China and a touch negotiator but it looks like Donny is softening his stance against the commies. Trump is worried about the stock market dropping in front of his reelection campaign so he wants a trade deal with China to keep equities elevated (although he may be in for a rude surprise if his watered-down trade deal does not support stocks). The market manipulation gets better. Overnight, China's central bank, the PBOC, reduces regulations on banks and securities firms. Bingo. The CSI300, which is China's blue chips, jumps +6%. Every Chinese stock that has the word 'securities' in it prints huge gains. Always remember, the central bankers are the market and why stocks have rallied for the last decade. The obscene global Keynesian spending by the world's central bankers creates stock markets that are nothing more than Potemkin villages. It will be interesting to watch when it all unravels. So, after another few days of US-China trade deal happy talk, a delay of further Chinese sanctions, a proposed meeting between Trump and Xi, and continued Fed, PBOC, ECB, BOJ, BOE, RBA and other central banker dovishness, the S&P futures are up +11 albeit a lackluster move considering all the weekend pumping. Interestingly, the VIX is at 13.81 up over +2% this morning. Futures are up and volatility is up. One of them is wrong. 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.
And the band plays on..... Same-o stuff. As previously mentioned, the jog move is occurring; one day down and today up. S&P futures are up +11 points about one hour before the regular US trading session begins. President Trump announces more happy talk about the US-China trade negotiations so the futures pop overnight. The big rally this year is fueled by an end to the government shutdown drama, the happy US-China trade talk and global central banker largess; a triumpherant of bullish joy. Remember, you have to wait for universal neggie d across all indicators to know the top is in. For the last price high on Wednesday, the indicators are in negative divergence (sloping downward) except for the RSI and MACD line (green lines). Thus, the SPX wants to come back up one more time after any day or two selloff. Hence, the futures are higher today after yesterday's selloff. The high this week is at 2782-2790 so any price move into this area would be good enough to qualify as a matching or higher high. As long as all indicators, including the RSI and MACD, then turn neggie d (below the thin red line in the right margin) with the new price high, then the top is in for the daily time frame. It appears that you do not want to stay long through the weekend. The stock market will be primed to head lower early next week. Of course, as always, the caveat is more happy trade talk which may create another goose and extend the top for another day or two. The rising wedge pattern and overbot RSI and stochastics are agreeable to a pullback. The uber complacency in the CPC and CPCE put/calls need to rectify (stocks need to sell off to erase the euphoric joy currently in markets). Stocks should head lower for a few days but the SPX weekly chart remains long and strong so price will likely recover back up to the current highs say a week or three out in early or mid-March. The SPX weekly chart will likely top out in mid to late March and then create a multi-week pullback in the stock market. It will depend on how things develop. The 150-day MA at 2748 is highlighted above (purple box). The slope of the 150 is a key Keystone cyclical signal for any stock or index. That bugger is dead flat. Note how it fell due to the Q4 selloff sending the stock market into a cyclical bear market pattern that remains. The slope of the 150 is uber important.If it begins sloping up, the stock market will return to a cyclical bull market pattern.If the 150 rolls over to the downside, Katy bar the door, the stock market will be poised to take its next big leg lower. By definition, the 150 will curl higher if price remains above 2748 but will curl lower if price drops below 2748. The SPX desperately needs to drop lower and show respect to the 20-day MA at 2718 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.
An important VST stock market indicator is the 8 and 34 MA cross on the SPX 30-minute chart.The 8 MA just stabbed down through the 34 MA which is a bearish signal for stocks in the hours and days ahead. However, the SPX is at 2780. This is at the 34 MA and above the 8 MA at 2776. Since price is above the 8, it will curl the 8 higher and potentially negate the negative cross and flip it back into a bullish cross like 2/11/19. Even though the bears have a go signal in this very near term, price must drop below 2776 pronto to keep the 8 MA moving lower. Otherwise, the bulls will curl the 8 MA higher and regain control. Thus, bears win big if they can move the SPX under 2776 and close below this level the further below the better.Bulls simply need to keep price above 2776 since this will curl the 8 higher and eventually it will cross above the 34 MA for a bull cross forecasting a continuation of the upside rally. Watch that SPX 2776 level. 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 1:31 PM EST: The SPX is at 2777.77. Note Added 1:34 PM EST: The SPX is at 2778. US Dollar Index 96.64. VIX 14.22. Note Added 1:39 PM EST: The SPX prints a 2776-handle. Note Added 2:12 PM EST: The SPX is at 2776.66. Note Added 2:19 PM EST: The SPX is at 2773. Note Added 2:26 PM EST: The SPX is at 2769. VIX 14.76. Note Added 2:49 PM EST: The SPX is at 2767. VIX spikes to 14.91. Note Added 2:49 PM EST: The SPX is at 2766.66. VIX spikes above 15. Note Added 2:52 PM EST: The SPX prints a 2764-handle. VIX spikes to 15.12.
Keystone posted this chart in early January highlighting four consecutive down readings in the Philly Fed data (four blue stars) which indicates that a recession is quickly approaching. The data popped last month to 17.0 but today prints an eye-opening -4; a negative number! That got everyone's attention. As previously mentioned, when the PMI data begins falling apart, it typically falls off a cliff. The maroon-ish line is the 3-month moving average and it is down for four consecutive months and down 7 of the last 9 months. This is not good. The olive green line is the 4-mth MA and it is down for five consecutive months and down 7 of the last 9 months. As the Apollo crew exclaimed, "Houston, we have a problem." The Philly Fed prints a negative -4. The Philly Fed has dropped for four consecutive months which is a recession indicator. The 3 and 4-mth MA's are now down for four consecutive months or more. The 3 stabs down through the 4 another bearish indication. The Phily Fed peaked at 34.4 last May 10 months ago. A recession is likely approaching a lot faster than anyone realizes and will perhaps become obvious in Q2 and Q3 especially Q4.Interestingly, the universal consensus on Wall Street is that the recession will not begin until 2020 at the earliest and many say do not worry about recession until 2021. What do you think? A recession signal occurs when four consecutive down numbers occur for the Phillky Fed as mentioned above. Another rule of thumb for the recession watch is using the 3-month MA (or the 4-month MA). Th e 3-mth MA is shown by the maroon line that prints a lower lower than in recent months. When the moving average turns negative, a recession is likely beginning to smack you in the face; the 3-mth MA is down to 7.4 and dropping like a rock and the 4-mth MA is down to 8.8. Hold on to your hat. Note the trend in the Philly Fed since the peak at 34.4 in May; lower lows and lower highs. When the Philly Fed falls apart it is usually a very fast and sharp drop (which may be starting now). Most young folks (under 30 years old) have not experienced a recession before. All of the lives of young people will change forever when the recession hits. Many will lose their jobs and have no idea what will hit them. Old dudes, like Keystone, have lived through several recession periods over the decades. It will be tough times for a year or two. If you are under 30 years old, or know someone, have them read, Clueless Millennials Must Prepare Financially, Mentally and Emotionally for the Coming Recession; A PSA (Public Service Announcement) for Millennials Explaining the Ugly Realities of Economic Recession. When the 3-month MA (or 4-month MA) turns negative, the recession has begun or will within a few short months. Typically, a recession occurs every four to seven years but the Federal Reserve and other global central bankers, acting in collusion, have destroyed the expected business and economic cycles with their obscene Keynesian spending since March 2009. That is when former Fed Chairman Bernanke, the "Father of Easy Money," began QE1 to save the stock market and protect the wealthy privileged class in America that own large equity portfolios. The decade-long central banker largess, that created the nonstop record highs in stocks year after year, may end abruptly. The game continues as long as everyone maintains confidence in the Federal Reserve and other global central bankers. If confidence is lost in the Fed, all is lost. Looking back at prior recessions, there was a bad one in the early 1980's, then a milder recession in the early 1990's. The 1990's were aided by the huge technology boom and the advent and common use of the personal computer. This technology revolution pushed any recession to the side until the dotcom bubble burst in March 2000. In the early 2000's, former Fed Chairman Greenspan pumped the stock market higher to save and reward his wealthy friends by lowering rates. This created the housing boom which went bust in 2007-2008 and created the 2008-2009 financial crisis. Fed Chairs Bernanke, Yellen and now Powell kept the stock market party going off the 2009 bottom into the September 2018 top with their money-printing and dovish talk. The stock market peaked in 1980 dropping into a very nasty recession during 1980-1983. The stock market peaked in the summer of 1990 as the recession began and was already in progress. The Philly Fed 3-mth MA went negative months before. Stocks peaked in March 2000 with the recession during 2001-2002. The 3-mth MA crossed negative at the start of 2001. October 2007 was the peak in the stock market ahead of the Great Recession during 2008-2009. The Philly Fed 3-mth MA crossed negative in mid to late 2008. In 2011-2012, the 3-mth MA went negative but Bernanke saved the day when he announced 'QE Infinity' again saving and protecting the wealthy class that own large stock portfolios. Such is America's crony capitalism system; land of the have's and have not's. In late 2015, the Philly Fed 3-mth MA again slips negative. The stock market peaked in May 2015; you long time followers of Keystone remember him calling the exact top in the stock market back then. However, as always, the Fed and other global central bankers stepped in to save the day in early 2016 (the Tweezer Bottom on the candlestick charts) and stocks rally into the September 2018 top. The stock market typically peaks ahead of when the Philly Fed 3-mth MA slips negative which occurs coincidentally or a couple-few months ahead of when recession begins.Thus, the stock market peaked in September-October 2018 so a few months forward places markets in the February-April time frame. The Philly Fed 3 and 4-mth MA's are below 10 and dropping fast. Remember, when the Philly Fed collapses, it typically occurs very sharp and quick. The recession is likely approaching far faster than anyone realizes. The 3-mth MA may turn negative as early as 1 to 3 months out (March-May). The recession may be here as early as Q2 and probably, surely, in Q3 this year. This is fascinating since most every Wall Street analyst says a recession is out of the question this year. Boy, they all will be surprised, as well as their clients. The Wall Street Einstein's say talk of a recession is preposterous; they say anyone who spouts such nonsense is a delusional madman. These are all the same analysts and money managers that were clueless that the stock market was topping in September/October. Well, when some of you are called into the boss's office over the coming months, and he drop-kicks you across the parking lot into the dumpster, rest assured the recession is underway. Stocks and the economy will head south rapidly and America will be in a malaise for a year or two, say now through 2020. Watch the Philly Fed closely. Pay attention to the next Philly Fed release on Thursday, 3/21/19.Housing Starts are released on Tuesday, 2/26/19, and are an extremely important data point for the stock 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.
Every time the SPX moves higher on the 2-hour chart and develops neggie d, and begin its spankdown, President Donny Trump steps in to say the US-China trade negotiations are going swimmingly. Here we are again. The red lines show overbot RSI and stochastics and the universal negative divergence across all indicators which is a bearish force. The SPX no longer has any gas in the fuel tank to take price higher in the 2-hour time frame. The money flow is trying to squeeze out a tiny sliver of upside joy so the stock market top may take a couple candesticks to top out which would be 2 to 4 hours. The daily chart is topping out with negative divergence anytime as well. So it looks like the stars are coming together for bears to growl for a few days ahead, after the top occurs this week. The Fed Minutes are on tap today and may create market drama. If that does not pop stocks, the president may run to a microphone and tout more success on the US-China trade talks. Barring any happy talk, stocks should begin rolling over to the downside in the VST (very short term). The upper band is violated so the middle band at 2761 is on the table and also the lower band at 2733; both are rising. The stock market may idle sideways until 2 PM EST when the Fed brings the FOMC Minutes down from on high. Global traders will kneel and await instructions from the central bank on how to trade. This is a critical juncture for the SPX. The 2780 level is key. Always remember Keystone's 80/20 rule where 8's typically lead to 2's and 2's typically lead to 8's. The S&P 500 tagged 2778 so 2782 was likely to occur which did occur. Price sits at 2780 right now. If the SPX strings a couple closes together above 2780, that will open the door for 2820 to occur in the days and weeks 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.
The SPX continues eking out upside gainsfueled by US-China trade negotiations happy talk and central banker dovishness. Each daily candlestick low can be assigned to a news bite that says the US-China trade negotiations are going well. The latest is that President Trump plans to extend the deadline for more tariffs from March 1 to May 1 an additional 60 days. Thus, stocks pop again. Today, Wednesday, the FOMC Minutes are on tap at 2 PM EST and if the recorded words are dovish phrases of joy, the stock market will float higher again. Price has retraced 100% of the move down in December a textbook 'V' bottom. The ADX shows that the collapse in stocks in Q4 was a strong trend lower (purple box) but interestingly, this big near 2-month rally is not a strong trend higher. The overbot RSI and stochastics, and money flow, are agreeable to a pullback in price. The stochastics, money flow and historgram are neggie d wanting to see price sent lower. The RSI and MACD line, however, remain long and strong due to the never ending happy talk from President Trump concerning the US-China trade deal. All that happy talk on trade has boosted price over the last month or so. Granted, the Fed and other central banks have performed much of the heavy-lifting off the early January bottom. The US-China happy talk on trade likely leads to an outcome of 'sell the news' or at least makes this outcome more likely. The upper band was violated so the middle band at 2704 is in play as well as the lower band at 2617. The SPX has shot higher like a rocket look at how price has not back kissed the 20-day MA now at 2704 (it is the same as the middle standard deviation band) since the start of the year; that is a long time so price needs to come back to show respect to the 20. Considering all the above mumbo-jumbo, the SPX either tops right now in this daily time frame and collapses under its own weight, or, price drops today and then recovers tomorrow (Thursday) and that is the top. At that time you should see the RSI and MACD line display neggie d and with all indicators negatively diverged the top will be in for the daily time frame. Remember, the low CPC and CPCE put/call ratios have yet to be rectified, or the elevated NYMO, so it will be no surprise that 100 handles and more are shaved off the S&P 500. However, there are three factors at play; the daily happy talk on trade and central banker dovishness, the daily chart above, and the weekly chart. The SPX weekly chart shows the moonshot rally this year and indicators are long and strong wanting to see higher highs on the weekly basis. Thus, although a top is now at hand on the daily chart the weekly chart still has upside juice. The move lower due to the daily chart above may only be down to the 2700-2750 level and this would take place over a few days time. Then the SPX should come back up again for another matching or higher high in price to satisfy the long and strong weekly chart. It may take 2 to 4 weeks for the weekly chart to peak out with neggie d. So it is a question whether the low put/calls extract their vengeance in the very near term taking advantage of the weakness on the daily chart, or, if this malaise and sideways chop continues for the SPX for another couple-four weeks into March where the larger and more substantive drop will occur. Take the pain now or in March. Mixing it all together, the SPX may jog lower today, then higher tomorrow for another matching price high at 2780-ish, then drop like a rock for a few days. This drop may begin this afternoon with the Fed Minutes or this news release may be what creates a jog move for the next couple days as the SPX daily chart tops out this week. The SPX will come back up after a several-day drop, however, due to the long and strong indicators on the weekly chart. A more significant market top is likely to occur, say mid-March, and that will lead to several weeks of downside in the stock market. 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.
The SPX 2-hour chart is topping out again. Each time the stock market tops out, President Trump or the Fed or other central bankers step in to pump stocks higher. The happy talk with the US-China trade deal pumps equities higher today. A government shutdown is also averted and King Trump decrees an emergency to fund the southern border wall with Mexico.Stocks rally but the chart says down. Remember, the CPC and CPCE put/calls, and elevated NYMO, have yet to reconcile so stocks need to sell off significantly to shake out this ongoing euphoric joy in markets. Aunt Harriet took her life saving to the broker and told him to buy the market on the long side; she wants to own tech stocks. The neighbor, Carl, who drinks a lot of beer, told her she is missing the train leaving the station. He invested his life savings in Amazon yesterday. The RSI and stochastics are coming off the overbot levels agreeable to selling. The rising wedge is a bearish pattern. The indicators are all in negative divergence (red lines) wanting to see a smack down in price. The upper standard deviation band was violated so the middle band at 2744 is on the table as well as the lower band at 2704. The SPX daily chart needed to set up with neggie d to identify a sturdy near-term top, which it did, but again, the trade deal joy pushes stocks higher. The SPX daily chart is in neggie d except for the MACD line so watch that closely.Do not be surprised if stocks sell off this afternoon into the closing bell to end the week. This may allow the MACD line on the daily chart to register neggie d. In other words, a significant near-term top is likely at hand right now. Get shorty. 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 3:00 PM EST: Minutes ago, the SPX prints 2771 at the intraday highs of the day at the 2772 palindrome. The stock market bulls are drunk as skunks from Trump champagne and Fed wine. Investors are partying like its 1999, before the closing bell, which may be a big mistake. Traders are care-free since the SPX is up a big 25 points. A trader yells, "Par-tay" as he buys six big blocks at the ask. Another trader is wearing a lampshade on his fat head celebrating daily stock gains that he says will never end. Note Added 3:09 PM EST: The SPX is at 2771. The bulls are laughing and singing songs. The band plays on. The Fed booze and Trump Vodka is flowing like water. Note Added 3:12 PM EST: Whooopsies, daisies. A wee bit of slippage with the SPX to 2768. One of the drunks on the trading floor falls down but laughs heartily, crawls to his knees and hand signals a buy of 5 more contracts at the ask. Note Added 3:18 PM EST: SPX 2767. Note Added 3:25 PM EST: The SPX is at 2768. Freddy Fafooshnik, floor manager at Shyster and Son brokerage, is stumbling around with a wine glass in his hand telling young traders to go ahead and buy since stocks will keep going up. Note Added 3:43 PM EST: The SPX is at the 2772 palindrome HOD. Traders are singing, "Happy Days Are Here Again." They sing "For He's a Jolly-Good Fellow" to King Trump and Emperor Powell praising these money God's that can make stocks go higher by simply turning their thumbs skyward. The TICK machine is only at +400. It pegged +1200 at the opening bell and +800 about a half-hour ago when the high in the SPX was printed; now another high on less enthusiasm. The VIX is down to 14.81. They are jamming volatility lower to print a nice finish for the bulls today. The SPX gains 28 points to 2774 the HOD. Note Added 3:47 PM EST: Jam it baby. VIX 14.79 LOD. SPX 2775 HOD. They want the happy finish for the weekend. Monday is a holiday, President's Day, so the stock market is closed which explains the buoyancy today. Equities usually trend higher before a three-day holiday weekend.Traders can also thank the president for the rally in front of President's Day. Note Added 4:20 PM EST: The S&P 500 ends the session and week with a big 30-point rally, +1.1%, to 2776 at the HOD. The VIX ends at 14.99 off the LOD at 14.79.
The weak Retail Sales dominated the headlines yesterday although the Jobless Claims are far more interesting. One of the key metrics that a recession is approaching, is a rise in unemployment claims. Any high school kid can figure this one out. People lose their jobs in a sick stagnant economy that is falling into or already in recession. Duh. It is a no-brainer. Typically a rise in claims for 5 or 6 months (trending higher) signals the start of a recession. This metric always occurs ahead of a recession although it can provide occasional false signals. Claims sometimes rise for 5 or 6 months but a recession does not occur and the claims resume a downward trend again. Of course, the Wall Street Einstein's unanimously proclaim that this is the current state of affairs right now and any softness in the claims data will improve going forward. We will find out who is swimming naked as the weeks play out. Claims bottomed in mid-September 2018. We are in mid-February 2019. That's 5 months. Interesting. Claims are rising for 5 or 6 months indicating that a recession is likely coming a lot faster than anyone expects. Perhaps the drastic drop in Retail Sales reinforces this trend forward? Claims are at multi-decade lows the lowest since the late 1960's and early 1970's. Back then, Keystone sported a tie-dye tee shirt with a peace symbol on it, long hair past the shoulders and grooved to the rock and roll sounds of Led Zeppelin. The 70's was the best decade in America's recent past far better than now. Back on point, companies do not lay off workers in strong economic times, hence, claims are low. However, the Federal Reserve and other central bankers have destroyed all price discovery over the last decade so no one knows what anything is worth anymore as well as the impact to years of economic data. The low claims numbers may actually reflect the ongoing weak economy, for years only propped up by central bankers that are protecting the wealthy that own large stock portfolios. Companies hang on with their bare-bones staff levels but as the business activity and sales remain soft, they finally give-up and close the doors. If they cut any more employees, the business cannot function. Perhaps we are seeing the end game where business owners say to H*ll with it all and permanently close the doors. Claims rise. The green downward-sloping channels show economic and market joy. Claims are falling during this period representing economic positivity. The wine is flowing like water and everyone that wants a job can typically find work, although it may be for a big cut in pay. The economy and markets are boosted over the last decade by the Federal Reserve and other global central bankers, all acting in collusion, to keep the stock market party going to reward and protect the wealthy elite class. The red upward-sloping channels show the trend change ongoing. Five months ago, claims bottomed and have been moving higher ever since (there is the one bleep lower at the end of last year). This upward move in claims creates the rising 4-week moving average. Generally, the economy and markets are great when the 4-wk MA is dropping but sad when it is rising. The 4-wk MA on the claims chart has a H&S (head and shoulders) pattern vibe to it. A head at 208K and neckline at 228 would boost the 4-wk MA to 248K-250K should the H&S play out. That would get everyone's attention. The claims numbers just went from a laissez-faire who-cares weekly data release to an extremely critical and key employment data point each week. Watch the numbers closely and note the progress of the charts above. Claims are released every Thursday morning at 8:30 AM EST. Be there or be square as we said in the 70's. This information is for educational and entertainment purposes only. Do not invest based on anything you read or view here. Consult your financial advisor before making any investment decision. Note: The FRED chart is from the St Louis Fed that provides a lot of useful data and charts to the public. The Claims and 4-Wk MA chart is provided by Econoday, a great site to view the economic calendars, and they work in conjunction with Haver Analytics.
As would be expected after today's upside stock market rally, the put/call ratios retreat lower deeper into complacency and fearlessness signaling a near-term top at hand. As the famous scholar Alfred E Neuman says, "What? Me Worry?" The central banker dovishness around the world creates a planet awash in liquidity. Traders are singing songs while buying stocks at the ask. Investors are drinking Fed wine and ECB champagne throwing money at equities without worry or concern about price. Timmy Trader, high on the BOJ crack, is telling everyone to "buy, buy, buy" before the train leaves the station. The complacency is rampant in the stock market. Traders are convinced that stocks will keep moving higher, after all, the SPX crossed above the 200-day MA at 2743 today closing at 2744. Investors that do not know a moving average from shinola are touting this feat as unequivocal proof that stocks will rally higher indefinitely. Pie-eyed traders, woozy from too much PBOC rice wine, are telling senior citizens to invest their life savings in the stock market. You know what happens when everyone is on one side of the boat partying like its 1999, as Prince would say. If the stock market tanks, what will global investors think of the central banks? For over a decade all faith and confidence is wrapped up in these corrupt institutions that perform the bidding of the wealthy class. Central bankers maintain dovishness to pump stocks higher which rewards the wealthy elite that own large stock portfolios. When Fed members leave their positions and return to private life they are rewarded with lucrative speaking engagements at the investment banks. This is how the crony capitalism system operates in America. One hand washes the other for the top 20 million people in America's elite class; they are the new Gilded Age riding roughshot over the 300 million huddled masses. The drop should be about 40 to 100 handles on the SPX when it begins the retreat any hour any day ahead.If the selling becomes nasty and equities drop like stones, will confidence be shaken in the central banks? Will global investors realize these mere mortals have no idea what they are doing? The Fed and others are simply making it up as they go along. The game is over if confidence is lost in the central bankers. If the SPX comes down to test the 2350 low, and fails, would that super panic the central banks? And super panic investors? The Federal Reserve, ECB, BOJ, PBOC and others begin the year with dovishness out the wazoo; how would it be viewed if stocks fall despite this central banker largess? It would signal that the end game is here. Do you think this scenario will happen during the weeks and months ahead? A tradeable bottom in the stock market will not occur until the CPC moves above 1.20. 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.
Bullish traders are tripping over each other today buying stocks with reckless abandon. In these final minutes it wold be wise to bring on some index shorts. The chart was already in complete negative divergence (maroon lines) so there was no reason for price to come back up but the happy talk news bites take precedence. The chart adjusts higher to the potential agreement by Congress that will avert a government shutdown and President Trump is talking-up the US-China trade talks. The indicators are in neggie d again (red lines) with the higher high in price and the stochastics and RSI are/were overbot also agreeable to a pullback. The SPX is at 2742 trying to break up through the 2743-2747 resistance zone.HOD 2748.19. The 10-month MA is 2747. The 200-day MA is 2743. The 100-day MA is 2699. The SPX is above the key 12-month MA at 2730,so the stock market is now in a cyclical bull market pattern (give this a few days or week or two to see if it sticks). The 50-week MA is 2731 so the SPX may want to come down to back kiss this critical 2730-2731 level again and make a bounce or die decision at this pivot point. It is the decider of whether equities are in a cyclical bull or cyclical bear market; as of today a cyclical bull. The SPX did not quite tag the upper standard deviation band at 2753 so that must be respected. Regardless, the middle band, also the 20 MA, is in play at 2716. Also, there is the tiniest sliver of bull juice remaining with the MACD line and money flow. These fumes may provide a last hurrah for the SPX after tomorrow's (Wednesday) opening bell where price may tag that upper band. Stocks are usually bullish from Tuesday into Wednesday during OpEx week. The low CPC and CPCE put/call ratios and elevated NYMO have yet to reconcile so a drop of from 40 to 100 handles in the S&P 500 looms near. This pending spankdown in the 2-hour chart above should provide the start of the downside and then the negativity may feed on itself. The SPX should top out now in this 2-hour time frame.The only thing that can change the game is happy talk from President Trump, the Federal Reserve or other global central bankers. The central bankers are the market. Conversely, if negative news occurs, such as a failure in the US-China trade talks, that would be a catalyst that would immediately spank the pending downside into high gear. 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.
Thwack. Smack. Slap. Thwap. The bulls and bears battle at the key 12-month MA at 2730 which determines whether the stock market is in a cyclical bull or cyclical bear market pattern.Price is at ..... wait for it...... wait a little bit longer for it ......... 2730. The S&P 500 is coming up from the underside for a back kiss of the 12. Stocks will bounce or die from this pivot point and dictate the direction ahead for weeks and months to come. This week is OpEx week so the professional traders are playing the Tuesday to Wednesday buoyancy in stock prices that typically occurs. Stocks usually move from a Tuesday low to a Wednesday high during OpEx week. The HOD is 2739. Price is now printing 2733 at 10:44 AM EST on Tuesday, 2/12/19. This price action at the 12-month MA is for all the marbles. The 50-week MA is 2731 creating a strong resistance gauntlet today at 2730-2731. If the stock market bulls win today, and create the start of a new cyclical bull market above the 12-month MA at 2730, the bears would have one last chance to stop the upside joy at the 2743-2747 resistance level. The 10-month MA is 2747. The 200-day MA is 2743. The 100-day MA is 2699. This information is for educational and entertainment purposes only. Do not invest based on anything you read or view here. Consult your financial advisor before making any investment decision. Note Added 11:03 AM EST:The SPX is at 2740.33 pushing the stock market into a cyclical bull market pattern (of course you have to give it a few days or couple weeks to see if the signal sticks). The HOD prints a couple minutes ago at 2741.02. The stock market bulls are singing "Happy Days Are Here Again" while drinking Fed champagne and buying stocks with reckless abandon. The bulls proclaim that there is nothing but upside ahead and they say they cannot be stopped. The buoyancy is more due to happy trade talk, a potential agreement on the government shutdown and the expected Tuesday to Wednesday OpEx buoyancy. Note that the big euphoric jump in stocks is met with a more subtle slump in volatility. The VIX maintains a 15-handle at 15.38 briefly printing 14.95 earlier. Considering the huge upside and market joy, the VIX would instead be expected to be well into the 14's moving toward a 13-handle. The drama continues. Note Added 11:15 AM EST: The SPX punches out another HOD at 2742.30, however, the VIX is at 15.35 perhaps hesitant to move lower. The bulls are looking at that 2743-2747 resistance and know if they get up through that it is smooth sailing. The bears are overturning tables and chairs and setting up a strong barricade of resistance at 2743-2747. The battle continues. Note Added 12:44 PM EST: The bulls are singin' songs and carryin' on. The SPX prints a HOD at 2745 puncturing the 2743-2747 resistance gauntlet. The S&P 500 trades through 2740-2745 for the last couple hours and is now printing 2741. Interestingly, as the SPX is pumped higher by ecstatic joyous bulls, the VIX moves sideways and now moves higher to 15.62. Volatility should be moving lower intraday, considering the big ramp higher in equities, not higher. Note Added 4:13 PM EST: The bulls win the day with the SPX closing at 2742 above the 12-month MA at 2730 so the stock market is in a cyclical bull market pattern going forward (give this a few days or week or two to make sure it sticks). No sooner was that last message posted at 12:44 PM EST than the Fed and/or other nefarious individuals jammed volatility lower. This coincides with the start of the fourth 65-minute trading segment on the day (each US trading session is divided into six (6) 65-minute sessions. At the start of the fourth segment which is from 12:45 PM EST to 1:50 PM EST, the robots came in jamming volatility lower like gangbusters. Obviously, the Fed, and/or other thieves, are placing their jackboots on the throat of volatility to pump stocks higher. They know if they can get up through the intense moving average resistance gauntlet discussed today than it is all-clear for big upside gains ahead. The VIX plummets from 15.65 to 15.10 in 45 minutes time. Boiinnnngg. The stock market pops higher. Fancy that. Another day at the crooked casino. Even with the nefarious intervention in markets, the VIX dropped today to 14.95 but was never able to take out that low (as equities rallied higher). The VIX moves sideways today finishing at 15.32 as the SPX launched higher. The VIX should have a 14-handle and perhaps a 13-handle so something is amuck. Either the VIX should drop like a rock when it begins trading at 3 AM EST 11 hours from now to prove that the stock market should go up and squeeze a bit more juice out, or, the VIX will maintain a 15-handle and keep hinting at buoyancy ahead, like trying to keep a beach ball underwater, which would kick in the selling that is expected by the neggie d on the 2-hour chart.
The 200 EMA on the SPX 60-minute chart is a key ST (short-term) market indicator. The 200 EMA on the 60-minute is at 2654 with price at 2710 so the bulls are winning. The S&P 500 was below the 200 EMA during the Q4 crash for the most part. You see where the SPX popped above the 200 EMA at joyous Thanksgiving time but that was short-lived. Perhaps all the great turkey and fixings lulled the bulls into more complacency. Equities then fell apart in December. The SPX moves above the 200 EMA during the second week of January which provided the all-clear signal for the long side. The bulls are steering the ship in this one-hour time frame. Bears got nothing unless they can push the SPX below 2654, if so, the bottom may fall out in the stock market. Note the C&H (cup and handle) in orange or inverted H&S (head and shoulders) in blue if you prefer, marking the bottom as the new year began. The head, or bottom of the cup, is at 2350 and the neckline, or brim of the cup, is at 2520-ish, so that is 170 points difference. The upside target is 2690 (2520+170) which was achieved satisfying the patterns. Price is now hinting at a potential H&S top (purple). S&P futures are strongly higher so that right shoulder will grow a little bit higher. The H&S is in play unless the SPX moves above 2740; this breakout higher would nullify the H&S. Watch to see if the 2685-2690 neckline breaks, if so, with the head at 2740, that will target 2630-2640 which guarantees a test of the critical 2654 decider level. If 2654 fails, price will likely print the H&S lower target in very quick order and likely be falling like a rock. Bulls continue to win above 2654. There is a big gap at 2640-2652 which will need filled at some point. 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.
The low CPC and CPCE put/call ratios continue.The stock market is pumped higher on the central banker happy talk. The Fed, ECB, BOJ, PBOC and others are flapping dovish wings promising easy money forever so stocks move higher and complacency festers. Typically, stocks would have pulled back in the near-term already due to the low put/calls but the joyous central banker pumping overrides all. The central bankers are the market. S&P futures are up +16 points and the VIX sports a 15-handle about 6 hours before the regular US trading session on Tuesday. Congress may have reached a deal on the government shutdown situation and President Trump keeps boasting of trade talk progress and a potential meeting with President Xi. The rally will provide a nice place to bring on shorts and add to existing shorts. If the stock market pops as the futures show, the CPC may dip down to the 0.80-ish level again further into complacency. The last tradeable bottom in the stock market was when the blood was in the streets in late December. The prior SPX weekly chart hints at another high in price and the S&P 500 may be trying to come up for that top now. The low put/call ratios and NYMO remaining elevated tells you that another wash-out in stocks is likely coming in the days ahead. A pull back of 40 to 100 points in the SPX would be expected.Of course the news flow and central bankers will continue sending stocks to and fro. 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.
Keystone mentioned GBTC the other day wanting to snag a sub-4 price which worked out fine. The possie d (green lines) set price up for a rocket launch higher which occurs. GBTC pops +15% on Monday. Keystone is out of the trade that fast and will look to reenter. The big gap left behind makes the play tricky but GBTC should continue higher in the days and weeks ahead. As previously shown on the bitcoin chart, NYXBT, the weekly chart exhibits buoyancy although the MACD line on the monthly chart remains weak and bleak. Bitcoin should travel sideways to sideways higher going through the year. Since the monthly chart would like another look at the recent lows a firm bottom in bitcoin will likely be placed in the March-June time frame. From there, bitcoin should steadily increase, and positive news should increase as well for the bludgeoned digital darling, through the remainder of the year. 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.
The SPX topped out in late September just as Keystone forecasted. The red lines show the negative divergence across all indicators, the overbot conditions and the ominous rising wedge pattern that create the smackdown. Keystone had warned of the pending doom since the SPX monthly chart was set up the exact same way. Any analyst or money manager touting rainbows and blue skies ahead back then, which are many, are dolts since all they had to do is look at the weekly and monthly charts and they would have never steered their clients into a ditch like they did. The SPX crashed -20% into the start of this year. The blue megaphone, or expansion, pattern remains in play. It was shown on the daily charts but here is a look on the weekly. The megaphone handle is added to complete the effect. If price collapses from this vicinity, the lower target is 2000-2100. That would get everyone's attention. Last week, the S&P 500 prints a doji candlestick which typically indicates a trend change. You will have to wait and see if it does over the next week or two. Note the doji top in early June that did mark a top back then. Price fell like a stone in December. Santa Claus slipped on the sidewalk and hurt his back. The elves were saddened after looking at their 401k's, that are now 201k's. The MACD line and money flow indicators were weak and bleak clearly wanting another low on the monthly basis, after any rally would occur for a month or so. The Federal Reserve and other global central bankers would have none of that. Price went down to test the 200-week MA at 2350 back then and bounced (pink circle).The central bankers did not want to risk a retest of the 2350 since if it failed, the global stock markets may slide into free fall. The 1/3/19 selloff triggered panic between Powell (Fed), Draghi (ECB), Carney (BOE), Kuroda (BOJ) and even Yi (PBOC). The PBOC immediately cut the triple R's which will increase lending and stimulate the economy. Powell and other Fed members, even hawkish ones, started flapping dovish wings. Draghi is open to more easy money ahead. The BOJ does not plan to change their accomodative monetary policy. Other global central bankers join the dovish party. The world is awash in liquidity. Life is a party for the wealthy class constantly reaping the benefits of central banker largess in this new and corrupt Gilded Age. Always remember, the central bankers are the market. The SPX begins the multi-week recovery rally in January purely off of central banker dovishness and US-China rosy trade talk. Last week, price prints the higher high while the RSI and money flow languish. The MACD line and stochastics, however, remain long and strong wanting to see price print another high. Thus, a near-term top on this weekly basis may be a week or so away. Price may want to chop sideways and keep teasing that 50-week MA at 2730. The critical 12-month MA at 2728 verifies that the stock market is in a cyclical bear market right now. The importance of the 2728-2730 resistance is big-time; it is for all the marbles. The ADX purple box shows that the long rally in stocks was a strong trend higher until July 4th of last year. The multi-month and year rally fizzled with the last of the fireworks. Stocks continued higher in July, August and until the end of September but the ADX already told you the strong trend higher was over. Keystone highlighted that back then and it was another tool indicating that the major stock market top was at hand. As stock sold off in the Q4 crash, the trend just started to develop into a strong trend lower as the new year began, but, as explained with the central banker largess above, stocks rocket-launched higher on easy money. The bulls need price to continue higher and for the ADX to turn around to the upside and move above 30 and higher to prove that the upside trend is strong. Otherwise, it is not. The bears need to push the SPX lower in price pronto and curl the ADX higher above 30 moving higher to prove that the price trend lower is a strong trend; the bears may need a few weeks to pull this off (fighting back against the central bankers is not easy; resistance may be futile). Interestingly, the Aroon has not yet displayed a positive cross. That is surprising considering the strength of the multi-week rally. You would think that was a given. The Aroon still shows the bears in control since late October. 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.
