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

One of Keystone's favorite short-term market signals is the 200 EMA cross on the SPX 60-minute chart. The 200 EMA on the SPX 60-minute is 2952 with the S&P 500 at 2966 so the stock market is short-term bullish. Bears got nothing unless they push the SPX below 2952 which will likely usher in a serious drop. Bulls are singing songs and carryin' on as long as the S&P 500 remains above 2952.

Note that price is on an island now above 2964 so a potential island reversal pattern may occur if price drops back down through the gap from 2964 to 2950. Otherwise, price may simply retreat and fill that gap. For now, the bulls are on easy street and if price punches up through the blue resistance line at 2990, it is off to the races higher.

The full moon peaked on Sunday afternoon so it was difficult for the bears to flex their muscles yesterday. Stocks are typically buoyant through the full moon each month. During the Monday session, volatility trends steadily lower. The Fed maintains its jackboots on the throat of the VIX to make sure stocks do not fall that far in the session. VIX has a 14-handle making for happy bulls and if a 13-handle prints, the bulls will be in Heaven. The Keybot the Quant algorithm is long and tracking VIX 15.85 as the key bull-bear line in the sand so bears need 15.85-plus to create market mayhem. The VIX is at 14.27 with S&P futures up +11.

Friday is OpEx so a Tuesday low typically leads to a Wednesday high during OpEx week. The professional traders are jumping the gun anxious to play a quickie long over the next day. So the bulls have the wind at their backs today if they choose to use it. The Empire State data is another read on manufacturing which is released this morning. Tomorrow is Retail Sales, Business Inventories and Beige Book. Thursday is Housing Starts, Philly Fed and Industrial Production. The Housing Starts are key especially since Keystone has called the start of the housing recession on 7/17/19. Retail Sales are key since the consumer is carrying the economy. The bank earnings this week are important.

Trading volume will be robust at the Friday morning open and at the closing bell due to OpEx. Interestingly, Keystone's obscure Eclipse Indicator, that identifies certain time periods where significant stock market selloffs may begin, signals that 10/11/19, give or take a couple weeks, and 12/7/19, give or take a couple weeks, are prime candidates. 10/11/19 was last Friday so we are directly in an eclipse window right now. If a significant stock market selloff does not begin over the next 8 trading days, equities are likely okay until the late-November to early-and-mid-December eclipse window. So if the bears want to growl, they had better get their act together quick over the coming days.

A short time ago China changed the goal posts on the potential trade deal. The communists want the tariffs lifted before agreeing to buy $50 billion in ag products. Xi is stuffing Trump. Foreign leaders are following the President Trump playbook; make agreements and smile for the cameras and then the next day change the deal. Futures drop on the news but then recover on the happy JPM earnings.

Showman Donny throws around the $50 billion number but China does not acknowledge this figure. The number is odd since the peak of Chinese ag imports was $25 billion in 2017 and lower ever since. Trump's braggadocio number is twice this amount. Donny knows how to string the crowd along since he does not tell you the time frame. He allows you to think it is one year but in reality it is likely 2 or 3 years and barely gets back to the import levels from 3 years ago. This is the way the game is played. This information is for educational and entertainment purposes only. Do not invest based on anything you read or view here. Consult your financial advisor before making any investment decision.

Note Added Thursday Evening, 10/17/19, at 4:45 PM EST: The SPX rallies today on happy Brexit and trade talk. The SPX prints above 3K to 3008 but closes at 2998. Traders are singing, "Happy Days Are Here Again." Retail Sales disappoint. No one cares since they are too busy buying stocks. Housing Starts disappoint. Who cares? No time to pay attention to data since there are stocks to chase higher. Remember the low CPCE print and the CPC is down to 0.92 a new one-month low. The bulls are singing songs and carryin' on since the Fed and other central banks, and especially King Donny, will goose the stock market higher into the presidential election next year. Investors and traders are relaxed, complacent and not worried about stocks ever pulling back to any great extent, like Alfred E. Neuman, they all ask, "What? Me Worry?"