SPX S&P 500 Monthly Chart with 12 MA Cross; Bulls and Bears Battle for Cyclical Stock Market Control

Perhaps Keystone's most important stock market signal, if one had to be picked, would be the SPX 12-month cross that dictates whether the stock market is in a cyclical (weeks and months) bull or cyclical bear market pattern. The SPX came all the way down to close at 3002 only 1 point away from the 3001 cliff-edge. Despite the robust selling, it's never enough. Price actually stabbed down through the 3001 to 2999 but only for a minute then recovered. The SPX is above the 200 EMA at 3001 so the stock market is in a cyclical bull market pattern.

The SPX lost the 12-mth MA in February signaling the cyclical bear market ahead but the bulls keep buying all dips since the Federal Reserve and other global central bankers continue printing money like madmen. The world remains awash in liquidity. The central banks are the market. In May, the S&P 500 overtakes the 12-mth MA to signal a cyclical bull market back in play the bear only lasting about 10 or 11 weeks, say 3 months.

The bears are growling again and trying to scare the bulls over the cliff-edge for good this time. A drop below 3001 will result in carnage. All hope would be lost. Stocks will collapse and potentially crash. S&P futures are up +60 points as this is written about 90 minutes before the opening bell for the US Friday regular trading session so the bulls look set to receive a temporary reprieve from certain death below 3001. Keep an eye on the 10-mth MA at 3011 which is an important level for algorithms and old-timer's.

The CPC and CPCE put/call ratios that were uber low signaling complacency and a near-term top have only spiked moderately. Both need to move higher to signal panic and fear and a tradeable stock market bottom. Neither are there as yet. The CPC is at 1.01 and would need to pop above 1.20, and the CPCE is at 0.70 and would need to pop above 0.80, to begin thinking about a tradeable stock market bottom.

Despite the robust selloff, the universal thinking is to buy the dip and happy times are still ahead. The bulls believe in the Federal Reserve and other global central bankers that are behind the curtain turning the wheels and pulling the levers that control the faux free market crony capitalism system.

The 3001-3015 support level is a deciding line for bulls versus bears for the remainder of the year. If the SPX moves above and remains above 3015, the bulls will be cheerful and happy for the weeks and months ahead. The bears will leave town and give up all hope that stocks will ever go down again. If the SPX drops below 3001, it is over for the stock market. Mayhem, misery and carnage will be the only three words that traders will use to describe stocks for the remainder of the year.

20-day MA = 3038
200 EMA on the 60-minute = 3015
200-day MA = 3013
10-month MA = 3011
50-week MA = 3008
SPX begins Friday, 6/12/20, at 3002
12-month MA = 3001 (the cliff-edge; it is over for the stock market if it fails)
 50-day MA 2892

The 3001-3015 support gauntlet holds the key to the stock market for this year. The SPX price begins Friday from 3002. It is reasonable to expect price to come up to back kiss the 20-day MA at 3038 so watch that moving average to see if price remains above or below. If price back tests the 3038 and is spanked back down, that likely indicates that the 3001-3015 support zone will be tested again. 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 Monday Morning, 6/15/20, at 2:50 AM EST: S&P futures are collapsing -95 points. The SPX popped 39 points on Friday, after the near 200 point mini-crash on Thursday. The SPX is at 3041 with the 20-day MA at 3048. The bulls were unable to close price above 3048 so the back test appears successful for bears and price may collapse lower. The 3001-3016 gauntlet of support remains in play. The 200 EMA on the SPX 60-minute chart is at 3016. If 3001 ruptures, there will be Hell to pay. If futures hold for the next 6-1/2 hours, all those moving averages above are toast except for the 50-day MA support at 2903 which would become the downside target.