SOX Semiconductors Daily Chart; Overbot; Rising Wedge; Negative Divergence Spankdown; Upper Band Violation; Chips Trying to Recover from 6-Month Cyclical Bear Market

SOX prints the top that Keystone called on 3/21/19 on this daily basis. The chips receive the neggie d spankdown (red lines). The overbot conditions and rising wedge pattern also create the bearishness. After the upper band is violated, the semiconductors retreat to the middle band.

The chips are a key component of the broad stock market and an important economic barometer. A chip goes into about every product made nowadays. The SOX bounces on Friday out of that green falling wedge, which is a bullish pattern. The stochastics remain weak and bleak and dip into bear territory below 50% hinting at more weakness ahead in this daily time frame.

The 150-day MA at 1278 is lining-out sideways testing the cyclical bear market that the chips have been mired in for the last 6 months. Note that the 150 is sneaking higher by a couple ticks of positive slope and is technically coming out of the cyclical bear into a cyclical bull. However, the big drop in Q4 will be factoring into the calculations for the 150-day MA which may keep the slope of the moving average line flat or negative. By definition, price would need to drop below 1278 to sustain a long-term bear market in the chips. Watch the 150 closely going forward. For now, the bulls are at the start of a cyclical bull market after a 6-month cyclical bear.

The Keybot the Quant algorithm, Keystone's proprietary trading robot, continually tracks the semiconductors due to their important imapct on stock market direction. Keybot identifes SOX 1340 (yellow bar) as the bull-bear line in the sand. Price retreated to 1365 last week but recovered and finished at 1396. If SOX remains above 1340, bulls will throw confetti as the stock market floats higher. If SOX drops below 1340 and trends sideways to sideways lower from there, the wheels will fall off the stock market for many months, even perhaps for a year or two.

The SOX weekly chart shows a long and strong MACD line so a jog move is likely as the chips top out, down one week, and then up again for another matching or higher high. At that time, the MACD should roll over with neggie d and the SOX should begin a multi-week descent. Keystone is not playing the chips right now but watches with interest. Chips may be setting up for a nice short in a week or two (as soon as the MACD goes neggie d on the weekly chart).

Looking at USD (do not confuse this with the US Dollar Index), the 2x semi long ETF, the chart is identical to SOX as would be expected. SSG is the 2x semi short ETF so this may be a potential long play, say, in a week or so. SSG is setting up with positive divergence as would be expected since USD and SOX are in negative divergence (mirror images). Both USD and SSG are thinly traded. 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 1:00 PM EST on Monday, 4/1/19: The SOX gaps higher up 31 big points, +2.2%, to 1426. Remember, the chips have some upside juice still available in the weekly time frame, so a potential multi-week top may occur for the semi's sometime this month.

XLF Financials ETF Daily Chart; V Bottom; Neggie D Spankdown; Gap; Potential Island Reversal and/or 2-Leg Bear Flag; Financials Remain Mired in Cyclical Bear Market for 6 Months

The banks receive the neggie d spankdown (red lines and arrow) since the chart indicators were out of gas. XLF, which also contains insurers and other financial companies, plummets from the upper band to the lower band and then receives a bounce from the lower band violation and oversold condition in the stochastics. 

The XLF came down and bounced off that blue horizontal price support line. That blue gap places the banks on an island above 25.0. If price collapses down through the gap to 24.7-ish and trends lower, that would be an island reversal pattern. Price may simply work lower and fill the gap.

The price support, oversold stoch's and lower band violation conspire to provide the bounce last week in the banks. Interestingly, the bounce occurs with not one sliver of positive divergence in play; you do not see that often. All indicators are weak and bleak in this time frame as price makes the lower low so lower lows in price would be expected going forward. Since the lower band was violated, however, the middle band at 26.04, and falling, is on the table. The 20-day MA is also 26.04 and dropping. Ditto the 150-day MA at 26.08 and falling. Note the negative slope of the 150-day (pink) which tells you the banks fell into a cyclical bear market in Q4 and remain there. The 50-day MA is at 26.01 and rising. So there is serious price resistance at the 25.90-26.10 area.

XLF is down -13% off the top one year ago mired in correction territory (-10%). At the end of last year and early this year, the XLF dropped more than -20% and down -26% off the top which is bear market territory by this metric (-20%).

The Keybot the Quant algorithm, Keystone's proprietary trading robot, is identifying the banks as the single most critical parameter influencing stock market direction currently. Keybot identifies XLF 25.86 (yellow bar) as the bull-bear line in the sand. Price tagged this level on Friday's opening bell but fell back and did not mount another attack for the rest of the day with XLF closing at 25.71. If XLF 25.86 is taken out to the upside, bulls will throw confetti as the stock market catapults higher. If XLF remains below 25.86, the stock market will start to fall apart to the downside.

The orange lines show the V bottom pattern that occurred round-tripping the banks from sorrow back to joy. The drop off the top and sideways stutter last week hint at a potential two-leg bear flag pattern which would target the 23.4-24.0 cluster area with the second leg down. So XLF may sneak up to tease that resistance gauntlet at 25.90-26.10, however, the chart is weak and hints at more selling ahead in this daily time frame. As long as the 150-day MA slopes lower indicating an ongoing cyclical bear market for the banks, the future appears bleak. 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 1:03 PM EST on Monday, 4/1/19: The XLF is up +2% to 26.23 well above the key 25.86 number called out by Keybot so the stock market jumps higher. The banks spring to life. Chips are also rallying more than +2% today. The bulls are throwing confetti and singing songs.

CPC Put/Call Ratio Daily Chart

The uber low put/call ratios finally show some signs of life. The CPC pops to 1.03 and the CPCE jumps to 0.69. It's a start. The low put/calls, and low volatility, verifies ongoing market complacency. There are still many traders anxiously buying the dips. Some investment houses are jumping-in to the long side because they missed the move up from January. They are trying to play catch-up but may end up getting cut off at the knees.

As the put/call ratios move higher, that represents increasing fear. You always want to buy when there is blood in the streets as everyone swears they will never own a stock again as long as they live. Tradeable stock market bottoms occur when the CPC moves above 1.20-ish and the CPCE above 0.80-ish. So you can start to watch these charts to see if panic and fear will appear, if so, you can nibble on long plays (above the green line).

The expectation from the uber low put/calls and the ongoing complacency would be for further downside in the stock market. That is the only way to create panic and fear. When people lose money watching stock prices tumble lower, they become fearful and will panic especially if the SPX falls far enough.

The S&P 500 is at 2805. Serious market trouble will start if the SPX loses the 200 EMA on the SPX 60-minute chart at 2785. The stock market could drop into free fall if the SPX 12-month MA is lost at 2748. Stock market bulls are fine as long as the SPX remains above 2785. 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.

TNX 10-Year Treasury Note Yield 2-Hour Chart; Oversold; Falling Wedge; Positive Divergence; Lower Band Violation

The 10-year yield dominates the water cooler discussions today. Global investors are seeking perceived safety in US Treasuries driving bond and note prices higher and yields lower. There is a worldwide move to notes and bonds leaving inflationists scratching their heads. The  lower yields provide a deflationary and disinflationary vibe.

A couple days ago, it was all systems go for higher yields. The note and bond rally needed to take a rest. The TNX 10-year yield 2-hour chart above was displaying possie d so it was time to launch. Yields popped but it was short-lived. There was no reason for yield to come back down in this 2-hour time frame chart but the MACD line was flattish in nature. That was possie d and helped to bounce yield but that may be one reason that yield leaked lower again but that would only be expected to create a matching low say at 2.40%-ish and bounce quickly again.

Instead, the bottom falls out of the 10-year yield down to 2.356% the lowest since 2017. The 10-year recovers to 2.37%. The only thing that can override universal positive, or negative, divergence is new unknown news. The further drop in yields comes as President Trump's new recommendation for a Federal Reserve seat, Stephen Moore, says the FOMC should cut by 50 basis points right now. Oh my. Moore is one of the architects of the tax cut that made the wealthy filthy rich and increased the national debt that recently blew through $23 trillion. For the last two years, Moore, who would have to be confirmed by the Senate before serving on the Fed, said the economy was great and growing--it looks like he does not believe that anymore. The central bankers are the market.

On that news, and with continuing global angst, and weak economic data, yields retreat today. As the chart shows above, however, up, up, up, would be the forecast for the 10-year for the hours and few days ahead. The overbot conditions, falling wedge pattern and universal possie d will bounce yield. The 10-year should at least seek the middle band at 2.44%, and dropping, for starters. The potential island reversal pattern remains in play if yield gaps back up through the blue gap.

The 10-year yield tagged 2.63% on 3/19/19 only a week ago and today dropped to 2.36% a jaw-dropping 27 basis point collapse in yield. That qualifies for water cooler status. The 3-month yield to 10-year yield spread remains inverted for four consecutive days. The recession is coming; it is only a matter of when. The average time that the recession arrives after the 3-mo-10 inversion is 14 to 15 months ; thus May 2020, about a year from now; spring 2020. However, there are longer periods and shorter periods when recessions occurred. The recession may be at our doorstep in the weeks and months ahead as everyone whistles past the graveyard drinking Fed wine, singing songs of praise for the ECB and touting the wisdom of the BOJ and PBOC.

Interest-rate sensitive stocks such as utilities, staples, REIT's and telecoms will likely underperform the broad stock market in the days ahead if the above chart plays out as expected and yields bounce. Keystone does not hold any positions currently in this note and bond arena, however, as per the above, TLT is a short right now, and TBT would be a long play right now, say for a few hours and days ahead. Stay nimble. Keystone will play one of these tomorrow. Yields may start to climb overnight. Keystone is short utilities as previously mentioned. This information is for educational and entertainment purposes only. Do not invest based on anything you read or view here. Consult your financial advisor before making any investment decision.

Note Added 8:21 PM EST on Monday Evening, 4/1/19: Notes and bonds are sold off spiking yields higher as the positive divergence on the TNX chart forecasts. The 10-year yield pops to 2.50%. TLT drops from 126.50 to 124.20; -1.8%. TBT rallies from 32.15 to 33.30; +3.6%.

UTIL Utilities Daily Chart; Overbot; Rising Wedge; Negative Divergence; Upper Band Violation

Keystone has started to short utes the last few days and is getting beaten-up. The drop in Treasury yields send utilities to the moon. Utilities like low rates since they have to fund long-term projects worth billions of dollars. When rates climb, utes are whacked.

For the US stock market to roll over and die on a long-term basis, the utilities would be expected to lead lower or at least work lower coincidentally. The big recovery in utes is a big plus for the stock market bulls. When UTIL or XLU roll over and begin trending lower on a weekly basis, you will know that the broad stock market may be in serious trouble from zero to two months in the future. So you must keep an eye on the behavior in utilities.

On the daily chart, price comes up into the rising wedge, has overbot conditions, negative divergence across all indicators and has violated the upper band. UTIL just checked all the negative boxes. Price should receive a spankdown in this daily time frame beginning anytime. UTIL will likely seek the middle band at 771 as a downside target. On the 2-hour chart, it looks like today is the top so if you want to short utes, get off the pot and consider the position.

It will be tricky, however, since the weekly chart has a long and strong RSI and MACD still yet, so after a few days or week or so of down, UTIL should come back up again for a matching or higher high. At that point, the RSI and MACD will likely go neggie d on the weekly chart and identify a significant top likely in April that will then lead to multiple weeks of downside (read the second paragraph again).

So, if you are nimble, short utes now and that should work out in the coming days. You could then cover that short or let it ride on a longer term basis (for several weeks or a few months). UTIL is making a top now, will drop, and then will likely come up to this same level say in three weeks (April) for a double-top, and that will likely be all she's got. That point in time will allow for a nice short entry.

Since utes are expected to move lower due to the sad daily chart above, the possie d on the TNX chart should continue and yields would be expected to 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 Added 8:11 PM EST on Monday Evening, 4/1/19: UTIL slips away from the neggie d dropping from 790+ to below 770 (-2.5%) then closing today at 774 (-2%). SDP, the thinly traded 2x inverse ETF for utes rallies more than +3% over the last four days.

TNX 10-Year Treasury Note Yield 2-Hour Chart; Oversold; Falling Wedge; Positive Divergence; Lower Band Violation

The Treasury and global yields have been falling like stones as investors worry about an economic slowdown and seek perceived safety. As traders gobble-up notes and bonds, the prices rise and yields drop as the 2-hour chart for the 10-year shows above. The tight bands (pink arrows) squeeze out a big move and this one is lower creating the collapse in yields over the last week.

Yield gapped-down through the blue lines so the 10-year is currently on an island below 2.47%. If yield comes up to 2.47%, then immediately gaps-up jumping to 2.50% and higher, that would be an island reversal pattern. Otherwise, yield may simply meander higher and fill the gap at 2.47%-2.50%.

The purple lines show the falling wedge, oversold conditions and positive divergence all conspiring to bounce the yield higher (remember prices move opposite so lower prices and higher yields are expected). And voila, the orange dot shows the 10-year yield at 2.453% as this is typed at 8:24 AM EST Tuesday, 3/26/19. Whoops. Check that. The screen shows 2.444% now.

So yield will likely run up to the 2.70% and then pause and decide whether it wants to jump the gap higher, fill the gap, or receive a smackdown. Yield will want to seek that middle band, also the 20 MA, at 2.52% and dropping. The middle band may come down to form a confluence at 2.70% just as yield comes up to the same number; and then yield decides to bounce, or die. This information is for educational and entertainment purposes only. Do not invest based on anything you read or view here. Consult your financial advisor before making any investment decision.

Note Added 8:31 AM EST: The 10-year yield is at 2.44% after the Housing Starts data and Permits lay an egg. Starts collapse more than -8.7%; and this is springtime! S&P +13. VIX 15.65. USD 96.58. Euro 1.1296. Treasury yields are; 3-month 2.47%, 2-year 2.28%, 5-year 2.22%, 10-year 2.44%, 30-year 2.90%. The 2-10 spread is 16.1 basis points. The 3-month-10 spread is inverted at negative -2 bips. The 3-mth-2 spread is inverted at -19 bips. The 3-mth-5 is inverted at -25 bips. The 2-5 spread is inverted at -6 bips. The 5-30 spread is 68 bips. All yields are under 3% and nearly under 2.90%. Lower yields and lower stock prices are a deflationary and disinflationary vibe. Higher yields and higher stock prices are an inflationary vibe.

NFLX Netflix Monthly Chart; Negative Divergence Developing

Netflix is a darling of investors. NFLX is traveling from the bottom left to the top right of the chart which is what a Netflix bull wants to see. Netflix, however, is printing its swan song. Perhaps Netflix can film a pay-per-view series of their coming demise as it unfolds. Last summer, the NFLX euphoria was at a peak. Their movies and shows, the original content, is popular, so investors trip over each other to buy the stock expecting the joy to continue forever.

A Tweezer Top prints last summer during the bull party phase (blue circle). The matching price high comes with negative divergence on the chart indicators (red lines) except for the MACD line that remains long and strong wanting another price high after any pull back in this monthly time frame. The red rising wedge pattern is bearish and the RSI, stochastics and money flow were overbot agreeable to a pull back.

Since the upper band was violated, the middle band (now at 292) was the initial downside target which was achieved. The 20-mnth MA has held as support the last few years. When it breaks, look out Nellie. Price then bounces off the 20 MA to begin the year with traders buying with both fists afraid of missing out on the Netflix upside bandwagon. Price recovers higher due to the remaining strength in the MACD.

Thus, price should want to keep floating higher to that brown line reflecting the prior highs; let's just call it 4 hundo. When that matching high in price occurs, the chart indicators will be in full-on neggie d wanting to see a serious spankdown. In fact, look at all the indicators. Even if price rockets higher it is hard to see the indicators taking out the prior highs so the neggie d should remain. Price needs to bump higher for the matching high and as long as the indicators then remain below those thin red lines in the margin, it is over for Netflix, or ovah, as they say in Brooklyn.

The purple box shows that NFLX finally moved above 50 to be in a STRONG trend higher late 2017, all of last year and into early this year. The ADX is dropping, however, and about to go sub 50 which would verify that the strong trend higher is over.

What does it all mean? It means you should walk to the exits at the Netflix movie house. NFLX can likely be shorted above 380 and simply build shorts from there forward. Price may run to 400 and higher as the last of the MACD bull juice is used-up; that would be great for confirming the universal negative divergence with the chart and locking in the doom scenario for the future. NFLX may also seek that upper standard deviation band at 432. It would likely depend if there is any positive news with Netflix. That is the only thing that could derail its fate and breathe more life into the aging beauty.

So NFLX is an all-out short play at 380 and higher going forward. NFLX will likely peak this week or in April and then it's over. Netflix would be expected to then travel sideways to sideways lower for the weeks, months, perhaps a few years forward. If you made a lot of money in NFLX, start implementing your exit strategy. Do not go long NFLX even though it may yet have life to 380-432 (red circle; this is where entering short is wiser). You would be picking up nickels in front of a bulldozer.

Keystone has NFLX on the short watch list but does not own a position now. At 380, it will be tempting to initiate a short position. With the above chart playing out as described, the 400 level and higher will be guaranteed short city. After Netflix tops-out in April, it will trail lower for the foreseeable future (unless a news event extends its life). 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.

NKE Nike Monthly Chart; Overbot; Negative Divergence

NKE takes the pipe on Friday down -6.61%. In the final minutes of trading, the market makers made sure the ominous -6.66% did not print. NKE lost -5.3% last week. Europe is fining the shoe king and at-leisure sportswear provider and its earnings report was not inspiring. Nike's monthly chart is in full negative divergence across all indicators on the last price peak. There is no more gas in the tank. NKE is making a long-term multi-month, that could easily stretch into a multi-year, top right now.

Price is extended above the moving average lines needing a mean reversion. The RSI and stochastics are overbot agreeable to a LT pullback. It is an ugly chart. Neggie d on a long-term monthly basis is an ugly prognosis. If long, sell it. As Nike's slogan says, "Just do it." That's right, sell it, just do it. There is no future in Nike going forward. Keytone deoes not have a position in NKE right now but will look for short plays in Nike 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.

WTW Weight Watchers Daily Chart; Positive Divergence; Descending Triangle

Keystone continues watching WTW with interest. Weight Watchers is losing value rather than pounds. It experienced the big -30% crash to begin the month. Oprah is a major shareholder. She is losing weight from worrying about the drop in the stock price rather than from the actual Weight Watchers program.

WTW catapulted higher when Oprah initially got involved with the stock. She appeared on commercials and the stock caught a buzz and of course most of the ladies worship at Oprah's altar. If she told them to jump off a bridge they would leap from the rail like lemmings. Therefore, it is logical to assume that Oprah will rally the troops again. Keystone previously mentioned this play but has not entered any trade as yet. A sub 19 entry is wanted and it did not materialize.

However, those jumping in quick a couple weeks ago at that time made a quick +8% as price jumped from 19 to 20.5. Then price retraces lower now at 19.38 remaining a hair above 19. You can see these matching lows occurring and the green lines show universal positive divergence. A bounce would be expected, however, that blue descending triangle is ugly. Also the money flow has lost a bit of mojo. This is a tricky call.

On the weekly chart, the money flow slips to a new low. All the other indicators are positively diverged wanting to see price rally for several weeks. The low in the money flow will want to see a jog move occur, up for a week or so, then back down for another matching or lower low for a week or so and that is likely a firm multi-week bottom.

Price needs to show respect to the middle band at 21.06 so a near-term pop may bounce price there. However, that weekly chart wants to chop for a couple weeks or so. Keystone is going to keep watching with interest. WTW is likely a great buy at 17-19. Oprah is probably filming new commercials right now that will appear on television soon to pump the stock higher. It is fun to watch. Keystone wants to buy in the 17-19 range but may wait two weeks regardless when that money flow on the weekly chart will be set up with possie d. 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.

BDI Baltic Dry Index Weekly Chart

The Baltic Dry Index, BDI, is navigating choppy waters. It is amazing to see the BDI languish at 695. The BDI is an excellent measure of the health of the global economy. The Baltic is a conglomeration of prices to ship dry goods such as iron ore, steel, cement, coal, powders, tires, recycling materials, grains, etc..., compiled daily.

Raw materials are the key building blocks of a strong global economy. If steel, platinum and palladium demand weaken, the auto sector is likely weakening. Ditto if the rubber and tire industries are slowing. This means less autos and machinery are being sold. Less resins and powders indicates low demand for plastics. Less lumber indicates a slowing housing industry. Less cement means construction projects are slow.

In a healthy economy, the raw materials shipments are increasing and prices climbing higher. Look at that big-time peak in the data, a double-top, or M top, exactly peaking at the October 2007 stock market high and then the second peak is the summer of 2008 just before the stock market began crashing in earnest.

Baltic Dry Index prices remain soft in a multi-decade lower trend indicating that the global economy is not as strong as many tout. Global economies are contracting. The slow demand in raw materials hints that the world muddles through a slow, stagnant, lackluster economy. The shame of it all is that this is what we have after one-decade of obscene Keynesian spending by global central bankers that only served to make the wealthy elite class more filthy rich. Sadly, the faux free markets and crony capitalism financial system are on full display daily. 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 60-Minute Chart; 200 EMA Cross; Potential Island Reversal Pattern

One of Keystone's important short-term trading signals is the 200 EMA cross on the SPX 60-minute chart now at 2781 with price above at 2800 currently indicating a near-term bull market. The bears tried to create negativity earlier in the month with a failure of the 200 EMA but the bulls quickly recovered.

The SPX collapses to 2800 which is exactly where price gapped-up to a couple weeks ago. The gap is at 2795-2800. Thus, price may simply drop to fill the gap, or, price may collapse back down through the gap creating an island reversal pattern. The SPX sits on an island above 2800 after that gap-up move. S&P futures are down -13 five hours before the opening bell for the US regular Monday trading session. VIX 17.57. European trading is soggy.

President Trump is exonerated on the Russia collusion investigation as was expected. Everyone knew Trump was not colluding with the Ruskies or Putin during the 2016 election; it was simply a political game the Democrat and Republican Tribes play the last two years. The ongoing headache for Trump is that FBI Special Counsel Mueller could not reach a conclusion on the Obstruction of Justice matters.

The DOJ decides on the weekend, after looking at the materials for a day, that Obstruction cases will not be pursued. Congress and the American people will want to know the details of the Obstruction matters but the DOJ will not yet release further information. The president creates further confusion proclaiming he is completely and totally exonerated which is not correct (Trump is completely exonerated from wrongdoing with Russia collusion but not from the Obstruction of Justice issues). Thus, the drama with America's rigged crony capitalism and political systems continues.

Last evening in the States, when US futures opened after the Mueller announcement, futures popped +5 then were up +8 and more. 15 minutes into the open, however, S&P futures were back down to the flat line and slipping. From there, the futures eroded lower and remain lower overnight. Obviously, global traders are not impressed with the Mueller outcome. The Russia collusion conclusion was expected. The confusing Obstruction of Justice matters, however, create ongoing angst. Watch the 200 EMA on the SPX 60-minute at 2781 since it tells you if the bulls or bears will win for the hours and days ahead; currently the bulls are driving the bus. This information is for educational and entertainment purposes only. Do not invest based on anything you read or view here. Consult your financial advisor before making any investment decision.

Note Added 9:38 AM EST: A few minutes into trading in the regular Monday session, beginning the new week of trading, the SPX is up 6 points at 2807. Price came down to fill that gap and print a LOD thus far at 2794, still remaining 13 points above the critical 2781. For now, the bulls are relieved, but they know the bears are likely plotting another push lower. The 20-day MA is 2799-2800 so obviously bulls win above 2800 and bears win below 2800.

Note Added 9:49 AM EST: Whoopsies, daisies. The SPX drops 10 points, -0.4%, to 2791 only 10 points from the critical 2781. Markets are nervous assessing the Mueller investigation results and thinking about the ongoing trade wars. Copper is a hair positive supporting equities.

The Keystone Speculator Blog Tags 3 Million Views

The Keystone Speculator blog logs its 3 millionth view so about 1% of the United States has enjoyed the charts, technical analysis and market commentary thus far. This total does not even include the Keybot the Quant and Keystone the Scribe blog sites. The blogs only continue as per the support received. Thanks to all of you that want the information to continue; you others need to get with the program; any support is welcome. Novice and professional traders, and market followers and enthusiasts, must realize that these are epic and historic times for the global economy and world markets. Stay tuned.

BA Boeing Daily Chart; BA Nosedives -19% After Horrific 737 Airplane Crashes; Boeing Takes 600 Points off the Dow Jones Industrials Index

BA has lost -19% of its value off the price top after the two airplane tragedies; Indonesia and Ethiopia, on the verge of a bear market. Apparently, faulty Boeing software during takeoffs and landings and/or lack of pilot training, are causing the mishaps. The tragedies should not be occurring for a brand new 737 airplane that was supposed to basically fly itself. Well, twice it flew itself into the ground.

Off the top, BA drops from 446 to 362, nosediving 84 points, -19%. Using a multiplier of 7 as a rule of thumb for points in the Dow Jones Industrials Index, Boeing has created about 600 down points in the Dirty Thirty this month. BA created about -2.5% of the drop in the Dow Jones Industrials this month all by itself. The Ides of March are not kind to Boeing.

As typically happens in these scandals and problems, emails will likely surface showing that the company executives were aware of the problems but swept the trouble under the rug. Whistleblowers will likely come out of the woodwork humming negative tunes. No one should be surprised. This is standard practice for a crony capitalism system where profits always take precedence over human lives.

Price is in the neighborhood of the 200-day MA at 356 so a kiss would be in order. BA will probably test the 200 and bounce for a few days. However, the weakness for weeks ahead, through the intermediate term, will likely continue. Keystone has no position in BA and will probably not play it. There is likely an opportunity this week for a quickie long say buy mid-week and hold BA for only a few days say into the following week, the first week of April, but you would have to remain nimble. 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.

KRE Regional Banks Weekly Chart; Regional Banks Bludgeoned -10% the Week of 3/18/19 Crashing Into Bear Market Territory; Downward-Sloping Channels

Last week, the regional banks, KRE, are bludgeoned -10% and now down -23.4% off the top last summer firmly in bear market territory. The XLF, reflective of larger banks, insurance companies and other financial companies, crashes -5%, and is down -14% off its top now in correction territory. Comically, the Wall Street pundits have been hyping the banks for over a year's time; all they did was lose money for anyone that jumped on their rickety bandwagon.

The candlesticks show three down weeks out of the last four with a bigtime collapse to the 200-week MA at 49.24. Price will bounce or die from this level and as the banks go, so goes the stock market. The brown line also shows that this level is strong price support. Bounce or die. ZION is kneeling saying prayers.

The selling volume last week is huge. Many investors said they are done waiting for banks to rally and are cutting bait. The blue lines show downward-sloping channels in play. Price is testing support at the confluence of the blue trend line, the brown price support line and the 200-week. Bounce, or die.

ZION loses -11.2% last week. RF -14%. PNC -8.2%. STI -10%. STT -7.3%. That is carnage. The banksters are wearing bandages around their heads to stop the bleeding from the severe beatings. 

The weakness in the banks created much of the weakness in the broad stock market late last week. Keystone does not own any bank trades long or short right now. 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.

XLF Financials ETF Weekly Chart; Banks Hammered -5% the Week of 3/18/19 Collapsing Into Correction Territory; Expansion (Megaphone) Pattern

The banks are puking their guts out blowing two chunks over the last three weeks. Last week, XLF, reflective of large banks, insurance companies and other financial companies, crashes -5% and is now down -14% off its peak in correction territory. KRE, the regional banks, crashes -10% and is down -23.4% off its top now in bear market territory! Comically, the Wall Street pundits have been hyping the banks for over a year's time; all they did was lose money for anyone that jumped on their broken bandwagon.

That red candlestick from last week is an outside reversal. Price made a higher high than the prior week and then ended up closing below the low of that prior week. This portends weakness for the weeks and months ahead, however, sometimes another near-term spurt occurs to log a higher high, say a few weeks out, and then roll over again for the intermediate term (IT). The red lines show how price made a higher high last week but all the indicators negatively diverged showing that the move higher was out of gas, and a smackdown occurs.

The 50-week MA ceiling at 26.46 spanked price lower to the 20-week MA at 25.47. Thus, the 25.47 pivot tells you a lot going forward. The selling volume for the two sell weeks over the last three weeks is large. Many investors said they are done waiting for banks to rally and are cutting bait.

The purple lines show the expansion pattern occurring this year and the blue lines show the expansion pattern, or megaphone pattern, over the last 14 months. If you extrapolate out for later this year into next year, the lower rail of that megaphone is at 17-19. This will likely occur as the US drops into and wallows in economic recession. XLF likely has a lot of sideways chop ahead with an overall slow downward bias. The 22 level is key long-term support. If that fails, look out below. Keystone's 80/20 rule says 8's lead to 2's and 2's lead to 8's, so a failure at 22 will open the door to 18 which jives with the lower target of that IT and LT megaphone.

JPM loses -6.4% last week. CEO Jamie Dimon is crying in his cafe latte. GS -4.7%. BAC is down -7.8% last week so they are keeping the kitchen knives away from Warren Buffett. The Oracle of Omaha sure is great at losing money. C -6.5%. WFC -4.6%. The Wells Fargo stagecoach just ran over Buffett's wingtip. Thump, thump. USB -7.3%. BK -2.7%.

The weakness in the banks created much of the weakness in the broad stock market late last week. Keystone does not own any bank trades long or short right now. 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.

XOP Oil & Gas Exploration ETF Daily Chart; C&H

Strong call option activity is seen in XOP last week. Traders are betting on upside ahead for the oil and gas exploration ETF. The daily chart displays a C&H pattern with two handles for the cup. The 31.21-ish level is key. A break-out above 31.21 will open the door for the cup and handle pattern to send price to 38.42 (bottom of cup at 24).

The green lines in the margin show how a break-out from a C&H is typically bot. When price breaks out above the cup brim, in this case 31.21, that would be a buy point, then price will usually place a quick high and come back for a back test, that is another potential entry point, and, if successful for the bulls, price will ramp higher again, and the point at which price overtakes the initial spike high, that would be another potential entry point.

Bears will win going forward if they can sink price below the support at 28. If that fails, 22-24 is likely. Keystone is not in XOP currently but watching it with interest for a potential long 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.

BPSPX S&P 500 Bullish Percent Index Daily Chart

The six percentage-point reversals in the BPSPX are key signals as well as the 70% and 30% levels. The stock market was on a double-whammy buy signal as March began. The BPSPX topped out at 73.6-73.8. Thus, the bears would need a move below 67.6-67.8 for a sell signal. Since 70% is in between, that would issue the first sell signal for stocks and the 67.6 would be the double-whammy sell signal, which occurs.

The BPSPX remains on a double-whammy sell signal since 3/8/19. The BPSPX places a bottom at 67.4 so a six percentage-point reversal to the upside is 73.4. Thus, the bulls need the BPSPX to poke above 70% for an initial buy signal and then above 73.4 for the double-whammy buy and to continue the march to new all-time stock market highs.

Price came up to 70% so the bulls started throwing confetti and singing songs but alas, the bears push the bulls down the steps last Wednesday and Friday. The BPSPX remains on the double-whammy sell signal for the broad stock market and this continues unless price can move above the 70% 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.

YC3MO and YC2YR Yield Curve Daily Charts; 3-Month to 10-Year Yield Spread Inverts First time Since October 2007; 2-Year to 10-Year Yield Spread at 12 Bips a Whisker from Inversion

The 3-month to 10-year yield spread goes negative at -0.02 bips for the first times since October 2007 when the stock market printed a multi-year top. The 3-month note yield is at 2.46% and the 10-year note is at 2.44%.

The 2-10 spread is at 12 to 13 bips with the 2-year yield at 2.32%. The 2-10 spread dropped to 9 bips in December a hair from inversion at the zero line. Analysts watch the inversions occurring in the various yield curve derivatives since they forecast an economic recession in the months ahead. A pullback in the stock market accompanies a recession.

The majority of Wall Street Einstein's say a recession is nowhere in sight and at least 18 months to 2 years into the future if it occurs then. Their thought processes may be impaired from the copious amounts of Fed wine. The recession is likely a lot closer and coming a lot faster than anyone realizes.

For context, the last four inversions predicted the last three recessions, so there was one false reading. The average time that the recession begins after the inversion is 15 months (this is why the Wall Street analysts say a recession is nowhere in sight even with the inversion above). One of the recessions came in 9 months after the inversion while another took 2 years. A big difference compared to the past is that the global central bankers have been pumping all asset prices higher for the last decade. There is no textbook that tells you how this obscene central banker financial experiment ends or how fast it ends. 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

The stock market saga continues with bulls marching higher goose-stepping over the bear's hopes and dreams. The left red arrow shows the prior top in this VST time frame, as previously discussed, brought on by the overbot conditions, rising wedge and negative divergence. Price would have been expected to retreat further, however, the Federal Reserve was at play this week. Chairman Powell rode into the press conference on a white horse, releasing white doves into the sky and throwing money out to the adoring journalists and lucky bystanders. Powell turned from dovish to uber dovish so the expectation would be for a 30-point pop in the SPX (this is the typical bounce occurring over the last decade each time Bernanke, Yellen or Powell flaps their dovish wings).

However, on Wednesday afternoon that did not happen. Stocks did not know which direction to move. The rally was a delayed reaction taking place on Thursday the S&P 500 gaining 33 points. Stocks are typically bullish moving through the full moon each month which peaked Wednesday evening.

So equities receive the neggie d spankdown but the Fed sends price skyward again for another high. Price violates the upper standard deviation band, printing the higher high in price, with universal neggie d across all indicators remaining in play. Ditto overbot conditions and the red rising wedge. All these parameters are/remain bearish. The expectation is for the SPX to trend lower for a few hours and days ahead. The middle band at 2834 is on the table as well as lower band at 2811.

Remember, the uber low CPC and CPCE put/call ratios have not yet extracted their pound of bull flesh and are foaming at the mouth to do so. This information is for educational and entertainment purposes only. Do not invest based on anything you read or view here. Consult your financial advisor before making any investment decision.

Note Added 10:03 AM EST: Whoopsies, daisies. The S&P 500 drops 27 points, -0.9%, to 2827. LOD 2825.85. So price quickly tagged the middle band. VIX 15.28. Yesterday, the SPX printed new highs but instead of the VIX sporting a 12-handle and lower, it was at 13 and now runs above 15. That divergence may have been telling with the stock market making new highs but volatility not making new lows. The XLF is taken to the shed out back and beaten severely down -2.3% to 25.46 below the critical 25.95 bull-bear level called out by Keybot the Quant. This behavior creates negativity in the broad stock market. The SOX is down -1.6%. So the banks and chips that took stocks higher yesterday take it away today. Watch copper closely. If it keeps falling, that will place the stock market into a firm bearish pattern. CPER is at 17.97; trouble would begin at 17.77.

Note Added 12:00 Noon EST: The SPX is puking 49 points, -1.7%, to 2806. The uber low put/call ratios signal complacency which begin claiming their pound of bull flesh. Price drops out of the red rising wedge; the collapses from rising wedges can be quite dramatic. Traders were far too optimistic and joyful. The VIX is at 17.00. The US 10-year note yield is at 2.42% down a dozen basis points since the Fed circus on Wednesday afternoon. The 2-10 spread is 11.4 bips. The 3-month-10 spread inverts for the first time in over a decade warning that a recession is on tap in the months ahead. The German bund goes negative to -0.03%. After the weak PMI data across the pond this morning, European investors flock to German bunds for perceived safety driving prices higher and yields lower. The euro is at 1.1282. 

Note Added Saturday Morning, 3/23/19: After the Friday selloff, the SPX drops 54 big points, -1.9%, to 2800, sitting on the 20-day MA support at 2799. LOD 2800.47. Bulls held the 2800 psychological level by 47 cents. The S&P 500 will bounce or die from this pivot point on Monday. More downside would be expected due to the neggie d on the 2-hour and daily charts. The 200 EMA on the SPX 60-minute chart is 2781 (this is a key short-term market signal which is now bullish; big trouble for the stock market begins with a failure at 2781). The 10-month MA is 2762 (this is used by many algorithms and old-timer's and would be a last chance level to stop the slide lower; if 2762 fails, stocks are going to continue substantially lower). The 200-day MA is 2755. The 12-month MA is 2748 (this is The Keystone Speculator's SPX 12-Month MA Cross Cyclical Market Signal which currently indicates a cyclical bull market going forward; if 2748 fails, it is over for the stock market). The 150-day MA is 2744 (watch the slope of this line since it dictates the cyclical market pattern; the 150 is flat to sloping lower signaling a cyclical bear market but bears will need price to go sub 2744 to maintain this negative signal going forward). The 50-week MA is 2743. The 50-day MA is 2734. The 20-month MA is 2701. The 100-day MA is 2686. The 200-week MA is 2683 (which needs back-kissed). The 100-week MA is 2654. Thus, the bulls have a chance to save the day and stop the retreat in stocks if they can hold support at SPX 2762-2781. If that fails, the market is in bigtime trouble. If the 2734-2748 support fails, the stock market will likely collapse and bulls will be grabbing at straws praying that the 2683-2701 support will hold. Humorously, you need sunglasses to read the paragraphs above.

Germany 10-Year Bund Yield Intraday Chart; German Bund Turns Negative First Time Since October 2016

Boom. Germany's 10-year bund yield turns negative for the first time since October 2016. The German bund yield is at -0.008%. The LOD is -0.01%. European PMI's are very weak. Traders are worried about a recession in Germany this year. Global investors are gladly willing to pay money for the privilege of parking their money in Germany. Traders are seeking safety around the globe as the world's economy begins to wobble. Central bankers plan to maintain low rates forever fueling asset prices that make the wealthy elite class filthy rich. The central bankers are the market. These modern-day money God's are sick pups. 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: Chart is provided by www.cnbc.com and annotated by Keystone.

Note Added Saturday Morning, 3/23/19: The German bund drops to -0.03% yesterday and then recovers to the positive side at +0.006%. What have the sick global central bankers done to the world's financial systems?

SOX Semiconductors ETF Daily Chart; Chips a Whisker Away from a New All-Time Record High; Overbot; Rising Wedge; Negative Divergence; Upper Band Violation

The chips lead the broad stock market higher on Thursday, 3/21/19. MU +9.6%. AVGO +2%. INTC +1.5%. QCOM +1.1%. NVDA +5.5%. XSD +3%. SMH +3.5%. AMD and XLNX are also notable chip stocks. The SOX gains +3.5% and is up +3.6% this week. The central banks have truly blessed us with happy days forever. The SOX closes at 1441.83, the 1441 palindrome, 4 points shy of the all-time closing high at 1445.90 from 3/12/18 (one year ago). The SOX prints a HOD at 1450.76 only 15 points from the all-time high at 1464.61 on 3/13/18. Watch the semi's closely to see if the SOX takes out the all-time highs, or, if the chips crumble.

The tight standard deviation lines (pink arrows) squeeze out a big upside move for the chips this month. The tight bands in late September early October sent the SOX sharply south exacerbating the Q4 collapse in the broad stock market. Interestingly, note how SOX had topped out last March well ahead of the broad market. Recall that Keystone was explaining the sideways symmetrical triangle as it evolved,and resolved lower.

Chips bounce off the possie d bottom to begin the year (green lines). It's a rocket launch with traders tripping over each other to buy semiconductor stocks at the ask. A stutter-step occurs in February but the party continues this month. The indicators show negative divergence which will want to send the chips lower for several days forward. The upper band is violated so the middle band at 1366, and rising, is on the table.

If the SOX can squeeze out a new all-time record high, that may excite the robots enough to extend the top for a few more days, otherwise, a reversal in SOX will likely occur on this daily basis and price may seek that middle band for starters.

The daily chart above hints at a top for the SOX anytime over the next one to three days, then down for a few days, but a recovery then occurs back up to matching and higher highs, perhaps a new all-time high. SOX should come up again because of the long and strong RSI and MACD line on the SOX weekly chart.

However, other indicators such as the stochastics are overbot and negatively diverged on the weekly chart. With this current matching price high compared to a year ago (close enough for government work), the chart indicators on the weekly chart are all neggie d for that time period. Thus, there is near-term momentum but the chips may be running out of gas. A guess would be that SOX tops out on a weekly basis in April say early to mid-April. This may be extended if the new all-time highs occur. Once the chips top out in April, they should trend lower for many weeks forward (it will be a high on a weekly basis). This year is hinting that the "Sell in May and Go Away" philosophy for the chips and the stock market may hold water. Keystone does not currently hold any chip positions long or short. 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 on Saturday Morning, 3/23/19: On Friday, the chips are down. The SOX retreats 41 points, -2.9%, to 1400. The new all-time highs will have to wait.

FDX FedEx and UPS United Parcel Service Weekly Charts; 20/50-MA Crosses

FedEx took the pipe yesterday collapsing -3.5%. That beating will leave a mark. FDX provided a gloomy forecast for the global economy sinking its ship as well as UPS that puked -2.2% in sympathy. These global shipping behemoths are key indicators of the world's economy.

The Keystone Speculator's UPS 20/50-Week MA Cross Indicator is an important decider of a cyclical bull market versus a cyclical bear. The 20-week MA is below the 50-week MA for UPS so the overall broad stock market remains in a cyclical bear market pattern. Keystone uses UPS for this signal and not FDX although they are two peas in a pod. UPS provides a bit more diversified look at the economy via the products it ships. The Philly Fed data is important this morning as another indicator of economic strength, or weakness.

Note how the 20/50-wk MA cross for FDX occurred back in late September exactly when the Q4 stock market bloodbath began. The 20/50 crosses for UPS are more choppy and unstable in nature. Each time the economy/market weakens, the Fed and other central bankers step in to keep things pumped. The 20-week MA is curling upwards so the bulls are trying to stage a turnaround for the cyclical signal. Market bears need to push price below 104.60 since that will curl the 20-week back down.

The FDX news and FDX and UPS charts above paint a stagnant sick picture for the shipping industry going forward which indicates that the economy may not be as strong as thought. This information is for educational and entertainment purposes only. Do not invest based on anything you read or view here. Consult your financial advisor before making any investment decision.

Note Added 8:42 AM EST: The Philadelphia Fed Business Outlook Survey is 13.7 above the 5.5 expected and on the positive side again after last month's -4.1. A weak economy heading into recession will become apparent as PMI and other manufacturing data weakens (if the data weakens).