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 S&P 500 prints a new all-time record high at 3514.77. It's the bear's turn now. The SPX 2-hour chart displays overbot RSI and stochastics, and money flow, agreeable to a pullback. The rising wedge pattern is bearish and the collapses from this pattern can be quite dramatic. The chart indicators are in neggie d (red lines) which will create the spankdown. The upper band is violated so the middle band at 3479 and lower band at 3427 are on the table. Price is extended needing a mean reversion lower. All of the above factors are bearish indicating the top is in. This is The End, at least for the hourly time frame. As price retreats, watch to see if the lower rail fails on the upward-sloping green channel. If so, that obviously means more trouble ahead. The Federal Reserve is not stupid. Their technicians likely told Powell and the gang about the problem at hand. Fed members are likely strategizing this evening, eating cold pizza in the Eccles Building conference room, figuring out some statement they can make to save the day. Ditto the Whitehouse. King Donnie Trump has called Mnuchin and Kudlow in on the Oval Office carpet and told them to have some type of hyped-up message ready for tomorrow morning before the stock market opens.The chart says down and that is all there is to it. The only thing that can save it is happy talk from the Fed, other central banks, President Trump, or happy vaccine talk. As a previous post explained, VIX 28.03-28.35 is a key bull-bear line in the sand. The stock market party can be sustained a little bit longer if the VIX remains below 28.03. If the VIX pops above 28.35, the stock market will be collapsing. Tuesday is the first day of trading for September and stocks typically receive buoyancy as new money is put to work. The monthly charts for August are cast in concrete today and the September price candlesticks begin tomorrow. The full moon peaks early Wednesday morning and stocks are usually bullish moving through the full moon. Labor Day holiday is Monday and stocks are usually bullish the 2 days in front of a 3-day weekend. A trifecta of joy for the bulls. The underlying current of the stock market is bullish as per the three factors but time will tell if the neggie d on the hourly and daily charts are strong enough to overcome these positive factors (which the neggie d would be expected to overrule everything else; neggie d is a powerful force). S&P futures are down -4 as the clock ticks towards 9 Pm EST on the US East Coast. 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 9:41 PM EST: USD drops to 92.08. Euro pops to 1.1959.S&P +1. Note Added Tuesday Morning, 9/1/20, at 4:30 AM EST: USD drops to 91.93; a 91-handle. The euro is pumped to 1.1980.S&P +13. VIX 25.61. Right on cue, AZN announces human trials for its vaccine. The CEO, however, is a Gloomy Gus saying the vaccine will likely not be ready by the end of the year and people will need to get used to living with the coronavirus. Gold 1990. Treasury yields are; 2-year 0.13%, 5-year 0.27%, 10-year 0.72%, 30-year 1.50%. Note Added Tuesday Morning, 9/1/20, at 7:25 AM EST: USD 91.86.Euro 1.1978.S&P +8. VIX 25.69. Note Added Tuesday Afternoon, 9/1/20, at 4:38 PM EST: Wheeeee! Whhooopie! This stuff is a hoot. The pumps arrive. AstraZeneca started off the fun with vaccine promises. Dr Fauci says vaccines look promising before year-end.Treasury Secretary Mnuchin was testifying on Capitol Hill promising a stimulus bill and no matter what President Trump plans to sign more fiscal measures via executive orders. What a mess. Whitehouse Chief of Staff Meadows promises a republican bill, that skinnied-down $500 billion package, in a couple days, and the Senate will vote and approve the bill next week and send it to the House. Pelosi will ignore it but none the less its progress on the stimulus front and stocks love it. Mnuchin does not want outdone so he then promises that he will speak with Pelosi to jump-start the stimulus talks. The SPX pops higher fueled by stimulus happy talk.Mnuchin says he is prepared to reach a deal with substantial stimulus. In other words, the republicans are willing to bring their overall dollar amount higher. Democrats are at $2.2 trillion, republicans at $1.0 trillion, so maybe both sides see the light and will make a crony capitalism deal at $1.5 or $1.6 something in there. Equities love the happy talk and explode higher into the closing bell. The S&P 500 prints a new all-time record high at 3528.03 and new all-time closing high at 3526.65. Note how the market makers bumped it a penny on the final print to avoid the 666. Happy Days. Whheeee! Whhooooopie!. Rockin' and rollin' all week long. Whoa, boy, all this partying can make a man dizzy. What do the charts look like since they have to adjust for the happy talk that did the goosing today? On the SPX 2-hour chart, today's bump is buptkis. The indicators remain neggie d. It is the same chart as above. The bulls may be able to keep price buoyant for an hour or two early hump day, but the SPX would be expected to receive its neggie d spankdown anytime. On the SPX daily chart, the indicators remain neggie d across the board. She remains topped-out. Typically, for a goosing, you would see at least one indicator bumping higher on the charts with extra fuel but there is nothing, nada, zilch; very weird. Bearish. Nothing has changed. Simply pretend tonight is last night. The SPX is topped out on the hourly and daily basis and expect it to receive a neggie d spankdown. The dollar recovered during the day but stocks remained buoyant. This is because the Fed jumped into action and placed its jackboots on the neck of volatility to keep it down and voila, stocks rise. It is a good thing that Charlie Evans shined the jackboots this past weekend so they were ready for use. VIX 26.12. The utilities remain key. Utes are trailing lower and that is an extremely bad stock market signal for the long-term. UTIL is sub 8 hundo to 794. UTIL must finish this week above 807 or the stock market is in serious trouble next week. Keybot the Quant was looking for 3493 today to flip short and price came down to 3494 and bounced.Take the flash crash and Black Wednesday, Black Thursday, or Black any day warnings seriously. It would not be surprising at all to see an intraday flash crash where the SPX drops 200 or 300 points in a heartbeat but instead of quickly spiking back up, it does not. Something nutso is about to happen; you can feel the vibe. Folks holding on to longs thinking there will be time to exit may be in for a surprise in the coming days. This is epic stock market activity occurring in real-time that will be talked about for decades to come. The SPX monthly candlestick begins a new month and the higher high may benefit the bears. Price makes its higher high and the indicators are in negative divergence. This is a long-term (months and perhaps years forward) stock market top that is occurring (in progress) and nobody understands it as yet. It is going to be an exciting Fall; a fall in Fall, when all the leaves are brown, and the sky is gray. Note Added Wednesday Morning, 9/2/20, at 3:30 AM EST: USD 92.56.Euro 1.1875. Time will tell if the euro longs and dollar shorts panic. S&P +17. VIX 26.02.Futures are happy on upbeat virus talk and stimulus promises. Comically, US stocks and futures go up regardless of whether the dollar is up or down.
It is like the night before the start of the Gettysburg battle. A lonely harmonica softly plays Shenandoah in the distance, the solemn sound echoes along the dark hollow and into frightened minds. The battleground is set for tomorrow at VIX 28.03-28.35.VIX is at 26.41 in bull territory pumping the stock market higher, however, it is only a buck and a half from danger.Danger, Will Robinson, Danger! The Keystone Speculator's VIX 200-Day MA Signal dictates a bull versus bear market in the short term. The bulls are winning right now with the VIX below the 200-day MA at 28.03. The Keybot the Quant algorithm remains long but is champing at the bit to go short for one day running. The quant is tracking VIX 28.35 as the key bull-bear line in the sand. Thus, the danger zone is 28.03-28.35 where the wheels fall off the stock market bus. If the VIX remains below 28.03 the bulls are whistling dixie as stocks remain elevated. If the VIX moves above 28.03, the wheels will fall off the stock market. You will visibly notice stocks dropping like rocks.If the VIX moves above 28.35, turn out the lights, the party's over. All good things must end as Willie says. Everyone is drinking too much party wine. This information is for educational and entertainment purposes only. Do not invest based on anything you read or view here. Consult your financial advisor before making any investment decision. Note Added Tuesday Morning, 9/1/20, at 5:52 AM EST: S&P +11.VIX 25.71. Note Added Tuesday Afternoon, 9/1/20, at 5:20 PM EST: SPX prints a record high at 3528.03. VIX 26.12. The battle continues.. Note Added Wednesday Morning, 9/2/20, at 3:30 AM EST: USD 92.56.Euro 1.1875. Time will tell if the euro longs and dollar shorts panic. S&P +17. VIX 26.02.Futures are happy on upbeat virus talk and stimulus promises. Comically, US stocks and futures go up regardless of whether the dollar is up or down. Note Added Friday Morning, 9/4/20, at 4:48 AM EST: Yesterday, the SPX drops 126 points, -3.5%, to 3455. The VIX jumps to 35.94 and settles at 33.60. VIX is currently trading at 32.41. Bulls will not be able to stop the selling unless the VIX drops below 28.666 (as per the Keybot the Quant algorithm).
A dollar pop will surprise everyone considering that 99.9% of Wall Street and Main Street are short the buck. The cable repair guy says he took an entire two paychecks and went short the dollar. He declares that everyone knows the dollar is guaranteed to move lower. A few days ago, Keystone showed you the pop in the dollar from the possie d on the daily chart above. A few-day rally was expected, however, price was then expected to come back down for a matching low due to a weak and bleak MACD line on the weekly chart. The weekly chart can be commented on below but first let's stick with the daily that is setting up to bounce. Just think, once the shorts start panicking, the dollar will explode higher like a rocket ship and harpoon the US stock market a la March redux. Interestingly, the standard deviation bands are squeezing in tight so a huge move is coming for the US dollar. Tight bands (pink arrows) forecast a huge move but do not predict direction. USD, or DXY, dixie, is at 92.16. This is a lower low so the chart indicators can be checked for positive divergence. All indicators are possie d (green lines) so the dollar is on the launch pad and fueled up in the daily time frame. Beads of sweat are forming on the dollar shorts' foreheads. Price is extended below the moving average ribbon so a mean reversion higher is on the table. The lower band violation places the middle band at 93.10 and upper band at 93.83 on the table. The ADX continues to indicate that the move lower in the dollar the last few months is a strong trend lower but is a weaker trend lower over the last three weeks. The Aroon red line is moving down off overbot levels and the green line sits in the oversold spot both indicators are bullish going forward. Look for the potential positive Aroon cross. The tight bands do not forecast direction but the possie d does and it says up. It will be interesting to see how much the shorts panic once the dollar starts moving. So the dollar daily chart is set up to move higher; tomorrow will be interesting. On the dollar weekly chart, all indicators are positively diverged except the MACD line that is weak and bleak like a week and two ago. The possie d on both charts will conspire to pop the dollar higher in the daily time frame. The weak MACD line on the weekly hints that the dollar will then once again want to come back down for another matching low after a few-day rally. However, if the dollar takes off like a moonshot right now, with shorts covering like madmen, the candlestick price shape on the weekly chart will change as well as the MACD which may actually show a bottoming and the automatic start of the multi-week rally for the dollar. Thus, the dollar should bounce now at least for a few days and then roll back over again maintaining that August pattern. At that time, say a week or two out, the MACD line will be possie d on the weekly chart and the dollar will be launching into a multi-week up move. Obviously, dollar shorts will be covering and running for their lives. The other outcome, as mentioned, is simply a rocket ride from here. Look at March. USD pops from 95 to 104 in a heartbeat nearly 10 big figures. Oh my. Keystone has to take a chair and dissolve a glycerin tablet under the tongue after such shocking news. If the dollar repeats the March move, as the shorts panic, the dollar would pop from 92 to 101 in a heartbeat. What a sight that would be. 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 9:40 PM EST: USD drops to 92.08. Euro pops to 1.1959. Germany is a huge car exporter and needs a cheaper euro. Note Added Tuesday Morning, 9/1/20, at 4:30 AM EST: USD drops to 91.93; a 91-handle. LOD 91.75. The euro is pumped to 1.1980.S&P +13. VIX 25.61. Note Added Tuesday Morning, 9/1/20, at 5:46 AM EST: USD drops to 91.89. The euro is pumped to 1.1980.S&P +12. VIX 25.70. Analysts say Germany and Europe as a whole will not begin complaining and worrying about the euro unless it climbs to 1.25-1.30. The DAX is trading soggy sideways as the euro moves higher over the last couple weeks so it looks like Germany's key index is stalling now as the euro climbs. DAX is up +0.6% currently. Recapping, the dollar is expected to bounce again in the daily time frame and rally for a few days. At that juncture, there are two paths forward. The MACD line is weak and bleak on the weekly chart so the dollar would be expected to roll back over lower after the few-day rally, print a matching low, the MACD will turn possie d, and that will begin a multi-week rally for the dollar, or, the shorts panic and the dollar spikes vertically with the stock market and gold collapsing a la March. Choose your poison. The multi-week rally in the dollar will not begin until the MACD line on the weekly chart turns possie d which will likely be anytime over the coming week or two. If shorts panic, all bets are off and the dollar will spike wildly vertical and the weekly rally will begin. The dollar is bumping along sideways currently at the low numbers (91.80-92.00) for the last seven-plus hours (trying to stabilize sideways right now). Note Added Tuesday Morning, 9/1/20, at 6:37 AM EST: USD 91.84. The euro is pumped towards 1.1990.S&P +11. VIX 25.63. The dollar is moving flat as the euro climbs higher. Note Added Tuesday Morning, 9/1/20, at 7:25 AM EST: USD 91.86.Euro 1.1978.S&P +8. VIX 25.69. Note Added Tuesday Afternoon, 9/1/20, at 5:01 PM EST: USD 92.30.Euro 1.1916. The euro tagged 1.20 and pulled back.SPX prints a new all-time high at 3528.03 despite the dollar moving higher. Note Added Wednesday Morning, 9/2/20, at 3:30 AM EST: USD 92.56.Euro 1.1875.S&P +17. VIX 26.02. The dollar is moving higher but futures are up. Time will tell if the euro longs and dollar shorts panic. Futures are pumped higher on happy vaccine talk and stimulus promises. Note Added Thursday Morning, 9/3/20, at 4:05 AM EST: USD 92.91. The dollar prints above 93 at 93.07 as the euro drops. Euro is at 1.1826 but printed a 1.17 handle a short time ago.S&P +2. VIX 26.14. The dollar is receiving the possie d pop on the daily chart. Look at the USD, or DXY, weekly chart. The MACD line over the last two weeks, as price made another lower low, is flatter than a newlywed's souffle. That is positive divergence. It s very likely the dollar is putting its low in on the weekly chart now rather than in a week or two. If the dollar shorts and euro longs begin panicking, it may be quite a sight; a February-March redux. Note Added Saturday Morning, 9/5/20: USD 92.97.Euro 1.1838.
Look at all the lollipops. The CPC and CPCE CBOE put/call ratios remain at uber lows; record multi-year lows. This signals rampant complacency and fearlessness in the stock market and a significant top at hand. Everyday is a par-tay with traders and investors drinking Fed booze, telling each other how smart they are, buying stocks with reckless abandon and ignoring due diligence. Young investors, with time on their hands due to the coronavirus (COVID-19) pandemic, have jumped into the stock market thinking this is their path to great riches. They will lose their shirts. The robots are simply following the trend that marches higher and higher, until it doesn't. The low put/calls verify the euphoric bullishness in the stock market. The taxi cab driver, who quit and is now an Uber driver, took his entire paycheck last week and bot AAPL stock. The shoeshine boy is bragging that he owns AMZN stock and plans to buy more. Aunt Betty, that was always known for her frugality, threw caution to the wind and gave her entire life savings to the broker in town, who has the office between the thrift store and the laundromat, and told him to place it all in tech and chip stocks. Frank Chisler, the broker, suggested that Betty diversify, and she agreed, so she bot some TSLA stock, too. It's the silly season. The red circles show the significant stock market tops over the last decade. The green circles show the significant stock market bottoms when panic and fear is rampant.You want to buy when people are screaming bloody murder running for their livesand sell when people are partying like its 1999. The May 2015 top was the last legitimate top in the stock market. The stock market was toast with 1400 in its sights. That is why the Federal Reserve rode in on its pale green steed to save the day creating that Tweezer Bottom in early 2016. The intervention into global markets by the four central banker horsemen of the financial apocalypse, the Fed (US), BOJ (Japan), ECB (Europe) and PBOC (China), over the last decade-plus has created dislocations and oddities in the stock market, especially since the obscene 2016 bottom. These biblical anti-Christ's have destroyed all price discovery in global financial markets. The low put/calls called the top at the end of last year into early this year and voila, the February-March crash occurs; the fastest crash in stock market history. You can see the Tweezer Top formation on the SPX monthly above at the start of this year. Comically, the stock market is above the February highs pumped by unprecedented Fed monetary stimulus and US government fiscal stimulus. Ditto the rest of the world. The planet is awash in liquidity. Money is laying all over the ground everywhere dropped from heaven, like manna, from the sacred and worshiped central bankers. Traders and investors pick up the money and buy stuff like stocks, bonds, real estate, vineyards, art, collectibles, antique cars, gold, diamonds, etc...; rich people stuff. All asset classes are pumped into bubbles. No one truly knows what anything is worth anymore due to the 11-plus-years of central banker intervention. In other words, the pricing is phony baloney and the day of reckoning always arrives. The move higher from 1800 to over 3500 is fantasyland; it is the best stock market rally that global central banker money can buy. Do not be surprised if the S&P 500 is back at 1800 over the next year or two. That should scare the Hell out of you. If you invest money now, you will likely only have one-half of your capital remaining in a year or so. That 1800-2200 range is easily doable. When the stock market is down there, and people are opining about their loss of their retirement funds and so forth, Keep in mind that one-half of America will be laughing at the wealthy class that lose money in their stock portfolios. There will be no pity shown on their part. One-half of Americans do not own a single share of stock; their response to the stock market falling will be 'good, f*#& them (the rich)'. In that 1800-2200 range, folks will be praying it does not fall to 1400 but that will be a bridge that has to be crossed in a year or so. The multi-year record lows in the put/calls signal substantial trouble coming for the stock market. Plan accordingly. Do you think we are on the Eve of Destruction? Take a look around you, boy, its bound to scare you, boy. 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.
Wheeee! Whoopie! The euphoric bull party refuses to end.Fed Chairman Powell staggers over to the punch bowl and adds more easy money juice. The crowd goes wild guzzling down Fed punch and buying stocks enthusiastically. The SPX prints a new all-time high at 3509.23 and new all-time closing high at 3508.01 both on Friday, 8/21/20. This is wild stuff right now. Truly historic and few seem to realize it. The US dollar drop a couple weeks ago to present is what has fueled much of the upside in stocks. On Friday, the euro jumps above 1.19 as the dollar dropped like a rock pumping US stocks higher. The Federal Reserve announcement about maintaining easy money for as far as the eye can see is a green light for equities. The wealthy class dance with glee as Powell performs their bidding. One-half of Americans do not own a single share of stock. Price tags that upper standard deviation band without coming back to the middle band after the last high touch early in the month. The middle band at 3386 and lower band at 3274 are on the table. Powell may want a do-over since the only indicator that received joy was the RSI. Even the RSI, however, is negatively diverged over the 2-1/2 year period. All other indicators are neggie d and the RSI and stochatics are overbot. The money flow is coming off overbot levels. After all that Fed pumping last week, the RSI would like to see a jog move in the SPX (down-up) which would likely turn it neggie d. A top would be in on Tuesday or Wednesday in this scenario, or, as has been the case for a month, at anytime. The red rising wedge remains extremely ominous. The Aroon lines are a sight; you do not see that often. The green line pegged at max one hundo while the red line is at the lowest possible zero level. The stock market cannot get anymore euphorically bullish. The meters are pegged. The bulls are 100% sure that stocks will go up and the bears are 100% sure that stocks will go up. Price is extended above the moving averages requiring a mean reversion lower. The ADX pushes into a strong trend above 30 (pink box). The Fed goosing creates the strong uptrend after the easy money forever announcement last week. The last strong trend was the downtrend during March. The chart remains topped-out despite the Powell Rally joy. When a month is all in one direction, like August all up, the last few days usually finish down. But tomorrow (Monday) is the last day, 8/31/20. Powell has a lot to do with the pump higher. The expectation would surely be for a down day on Monday. Humorously, the S&P futures have ramped steadily higher up +19 points from 6 PM EST to now, at 8:40 PM EST. Wheee! Whhooopie! Keystone's 80/20 Rule says 8's lead to 2's so 3480 leads to 3520. The 3508 leads to 3512. The 3518 would lead to 3522. The bulls are likely gunning for the SPX 3520's, or at least giving that impression currently. It would not be surprising to see the stock market fall apart at anytime and collapse big. A flash crash or Black Monday, Tuesday, etc.. remain on the table and become more likely the higher this parabolic puppy moves. The full moon peaks on Wednesday at 1:22 AM EST before the US stock market opens. Stocks are usually bullish through the full moon. The Labor Day holiday is Monday, 9/7. Stocks are typically bullish the two days in front of a three-day weekend which would be Thursday and Friday. Thus, the bears have the background current of the markets in their favor early in the week but from Wednesday to Friday the bulls have more wind at their backs. The US Monthly Jobs Report is released on Friday morning. Markets could fall into a sideways chop until those numbers are revealed. As the previous post explains, watch the utilities closely. UTIL must be above 807 by Friday at 4 PM EST, otherwise there will be Hell to pay.The ongoing multi-year record lows in the CPC and CPCE put/calls continue signaling off-the-charts bullishness and a serious correction on tap. The Keybot the Quant algorithm remains bullish but is champing at the bit to go short.If the S&P 500 drops below 3484 moving lower, Keybot the Quant will likely flip short. So this week may be when the bell tolls. S&P futures are up +20. Wheeee! Whhoooopie! With the help of the Fed, the bulls are Stayin' Alive, ahh, ahh, ahh, ahh, stayin' aliiiiiiiiiive. 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 9:02 PM EST: S&P +19. Dow +169. Nazzy +89. Commodities are higher including oil, gold at 1971, silver, copper, aluminum, platinum, etc..US Treasury yields are; 2-year 0.13%, 5-year 0.28%, 10-year 0.73%, 30-year 1.51%. The 2-10 spread is 60 bips. The 5-30 spread is out to 123 bips.Watch the banks. The XLF ETF includes insurance companies and other financial tickers in addition to the large money-center banks. The KRE ETF is the regional banks that would benefit more from a steeper yield curve since lending is how they make their money. The large investment banks have floors of professional traders making lots of money for those institutions via trading. Thus, KRE would be expected to receive more joy but that was not the case last week. See if this disconnect continues, or not. Note Added 9:08 PM EST:China Mfg PMI misses the 51.2 estimate at 51.0 but the Non-Mfg PMI beats the 54.2 estimate with 55.2. You can never trust the numbers from the filthy communists. S&P +16. Euro 1.1901. USD, or DXY, 92.33. Dollar/yen 105.53. Note Added Monday Morning, 8/31/20, at 5:55 AM EST: S&P +11. Dow +80. Nazzy +47. Russell +8. VIX 24.02. Futures and volatility are higher so one of them is wrong. Euro is pumped to 1.1915.US dollar 92.34. The dollar is not any weaker since last evening but the euro is higher. Dollar/yen 105.91. Oil is up over +1%. Gold flat. Ohter metals are higher. Soft commodities mixed. Treasury yields are; 2-year 0.13%, 5-year 0.27%, 10-year 0.72%, 30-year 1.49%. The 2-10 spread is 58.5 bips. The 5-30 spread is at 122 bips. Note Added Monday Morning, 8/31/20, at 6:18 AM EST: S&P +7. VIX 24.17. Note Added Monday Morning, 8/31/20, at 8:16 AM EST: S&P +4. VIX 24.44. Euro 1.1937. USD 92.20. The euro is jammed higher and dollar lower but futures are soggy. Volatility moves up so futures move down.
The trading day is separated into six 65-minute trading segments; 9:30 AM EST to 10:35 AM EST 10:35 AM to 11:40 AM 11:40 AM to 12:45 PM 12:45 PM to 1:50 PM 1:50 PM to 2:55 PM 2:55 PM to 4:00 PM The robots are buying blocks of shares at the start of each interval as shown by the green boxes; pop, pop, pop, pop, pop, pop. The robots are following the trend. Uptrend, click, buy, uptrend, click, buy, uptrend, click, buy, etc... Watch these pivot points throughout the day especially that 2:55 PM changeover that sets the course for the last hour of trading. 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 S&P 500 is at all-time record highs above 3.5K on Friday, having only passed 3.4K on Monday.Federal Reserve Chairman Powell is pumping like a madman promising to maintain easy money policies for years forward. It is sick. As this topping-out drama takes place, the utilities are the most important sector impacting both the short-term (hours, days a few weeks) and intermediate term (weeks and months into year-end). All the major and minor sectors are running joyfully higher as the stock market prints record highs except for one; utes (UTIL or DJU; you can monitor the utility sector with XLU). Utilities are extremely important but when is the last time you heard a talking head on television or some bonehead on the internet mention utilities? Utilities print the three black crows candlestick formation. That's not good. UTIL enjoyed a six-week rally through July but the for the last three weeks, down, down, down. For the candlesticks, the opening price is above the previous low and then finishes lower. Three down candlesticks are three black crows that signal a trend change from bullish to bearish (confirmation). Two key metrics are in play for utes which are a useful tool for forecasting a stock market selloff and the intensity of a drop. As long as utilities are in a weekly uptrend, based on the closing price 15 weeks ago, and above the 50-week MA, now at 834, all's right with the stock market and an uptrend is the direction for stocks. When either parameter turns bearish, a sogginess appears in the stock market. If both parameters are negative, there is trouble ahead for the stock market that will last through the intermediate term. UTIL begins the week at 801 so the bulls have their work cut out for them to push price above 834. Considering the new all-time highs for the stock market, UTIL should be at 840, 850 and higher, but oddly, it's not. This tells you that something may be wrong under the surface. Utilities typically peak and roll over either two months in front of a major selloff in the stock market or coincidentally with the stock market or anywhere in between (a zero to 8-week heads-up signal that the stock market is about to go down hard). The three black crows are three weeks now that utes are heading down. This behavior is currently telling you that the stock market may be in trouble and quickly running out of time. The 50-week MA parameter is bearish for stocks but it does not seem to matter these days with Pope Powell pumping equities. The 15-week lookback is extremely interesting. The weekly trend comparison number for this week is 763.93 (purple circle) so price is 36 points above and the bulls feel good about that. For the start of this week, UTIL is at 801 with happy bulls wanting 834 and happy bears wanting 764. Utilities will pivot in one direction or the other and that in itself will be important. It is a safe bet that UTIL likely remains above 764 this week. However, the following week, after the Labor Day holiday when markets are closed, 9/8 thru 9/11, the lookback comparison number is 806.92 (the brown circle; the 764 number will no longer matter). Thus, the bulls must push UTIL above 807 this week by Friday at 4 PM EST, otherwise, there will be Hell to pay in the stock market come 9/8. The chart shows that sideways symmetrical triangle pattern. The indicators are lined out sideways like the moving average so everyone is standing around waiting to see which way she breaks. Price is directly at the apex of that blue triangle and must decide which way to go. The vertical side of the triangle is from 7 hundo to 9 hundo so the difference is 2 hundo. Thus, if bulls win, price breaks out from 820 and targets 1020. If bears win, price breaks down from 790 and targets 590. If UTIL rallies this week, remaining above 800 and overtaking 807 and finishing the week above 807, the bulls and the broad stock market are fine and will continue along in an elevated manner.If UTIL slips below 8 hundo and remains below, you should become very concerned. If UTIL falls below 764 this week it is lights-out for the stock market. If UTIL loses 807 the following week (Labor Day week), the stock market will be selling off and in trouble. If UTIL falls below 750 this week or next, or at anytime over the next 6 weeks, there is a high likelihood that the broad stock market will crash or at a minimum trail significantly lower into year-end. Watch the utes closely this week. They will tell you a lot. 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 scenic Laurel Highlands in southwestern Pennsylvania was hit with severe storms and winds Thursday evening taking down cable and communications lines. All systems are operational again.
The big day has arrived. If you listen closely, you can here the calliope music in the background. The parade is coming down Wall Street, screw Main Street, and Prince Powell is the master of ceremonies. The global trading and investing community expect Powell to ride in on a brand new shiny pony promising easy money forever. Nobody expects otherwise. So Powell better deliver that brand new shiny pony; if he tries to sell a donkey with a sullen back instead, he may end up looking like a horse's arse. The stock market continues printing all-time record highs. The tech stocks have jumped the rails with parabolic (straight vertical) moves higher. No one cares about technicals or fundamentals; all that matters is the momentum like the dotcom bubble. AAPL has a PE above 38. AMZN is over 132. FB 39. NFLX 97. GOOGL is above 36. MSFT over 38. TSLA's PE is a whopping 1,108. That is hilarious. Pause for laughter. Yesterday was a goofy day in markets. Prices are all over the place, up, down, sideways. Relationships between indexes and signals are haphazard. Pricing is erratic and unstable. The SPX prints a new all-time record high at 3481.07 and new all-time closing high at 3478.73 on Wednesday, 8/26/20. The Nazzy indexes print new all-time highs with the FAANG stocks and others such as Mr Softy and Tesla pumping the equity markets higher. The RUT small caps end negative on the day. As the stock indexes ran higher, so did volatility; the VIX is above 23. Stocks are up and investors are so happy and comfortable that they are buying gold at the same time. While these oddities occur, the 10-year yield bumps along sideways not knowing which direction to turn. The stock market is reminiscent of the dotcom bubble top. Larry Wachtel was a character back then. The bullish euphoria was off the charts. Any of you that can remember the late 1990's remember the party in tech stocks and the 'new' internet stocks. Pets.com and Webvan were cheered as the future of America. In offices, employees mentioned stocks daily and how their retirement funds are looking fantastic. Keystone worked with a bunch of jackasses that were buying Enron stock. They proclaimed that only a fool would not put entire paychecks into that hot stock. Enron went bankrupt in December 2001. Against that euphoric backdrop in markets, where every 10 minutes on business television another talking head would say, "buy, buy, buy," kind of like now, Wachtel was one of the extremely few voices of reason. He would shake his head back and forth and say that this party was going to end in tears and folks need to prepare. Of course everyone thought he was a wet blanket and simply did not know how to have fun. After all, everyone is long the market so everyone cannot be wrong. That is when the dotcom crash began. In the dotcom bubble, the tech stocks did not have much earnings. That is a key difference compared to now where the tech stocks pumped into bubble territory actually have solid earnings. Perhaps their projections are the problem. As the US languishes in recession and the layoffs increase going forward, the sales projections are likely way off the mark. If you travel back farther into the 1970's, the days of the Nifty 50, the hottest blue-chip US stocks, everyone thought they could do no wrong. It was easy to simply buy them and forget about them since stocks go up forever. Boom. Investors realized how stocks can drop like rocks and languish flat for years on end. This is how the current market feels more like that topping behavior. Powell is busy stuffing doughnuts into his piehole at the free buffet set up in his kitchen. An attendant is cleaning a jelly stain from his necktie. Powell has hiked to the mountain top and now has possession of the tablets from on high. Powell will decree how global traders should trade once he begins speaking. He is like Julius Caesar of ancient Rome. In a short time he will extend his right arm and provide a thumb's up, or thumb's down, on the stock market. What power Pope Powell holds! Kneel and worship such divine energy! The central bankers are the market. The stock market floats higher this week into the Fed statement as well as happy vaccine and covid treatment talk and promises of stimulus money. The rubber meets the road today. Considering the ongoing rampant multi-year record-setting complacency in play,and negativity in the SPX charts, and high valuations, you would think that the stock market would collapse from here no matter what Powell says. Keybot the Quant remains long and is identifying financials as the key parameter most impacting stock market direction currently.Bears need XLF below 24.20 (red bar) to create stock market havoc. Thus, if you see negativity develop in the stock market today, and the XLF loses 24.20, equities are in trouble and the top is likely in. If stocks sell off but XLF remains above 24.20, the bears got nothing and bulls will eventually recover. If stocks rally, but the XLF tracks lower and loses 24.20, the stock market will then roll over and die. The sideways symmetrical triangle patterns are in play. Bulls obviously win if price moves above the upper rails while the bears win if price moves below the lower rails. That light blue line is at 24.70-ish which is strong price support. If 24.70 fails, a test of 24.20 is likely. Today may be an interesting, even watershed, day in 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. Note Added Saturday, 8/29/20: Pope Powell pumps the parabolic price party. The Fed concedes that stagnant wage growth will not create inflation. That has been the problem of the grand 11-plus-year Keynesian financial experiment that has yet to completely play out. With years of dovishness, the Fed is still unable to create inflation but now they say they can and they will tolerate an overshoot above 2%. The yield on the 30-year tags 1.5% and the 5-30 spread pops to 119 bips. The Fed is telling investors that higher inflation is desired and will be tolerated which results in selling on the long end. The yield curve steepens and traders trip over each other to buy the banks.XLF catapults +4.3% higher last week.Of course it does.KRE gains +4.1% which is odd since the regionals should be happier than the money center banks since lending is their bag. Chalk it up to another disconnect during this epic stock market topping activity. Powell is concerned about persistent low inflation (a la Japan) and the theory is that if inflation remains low for a long time, it becomes engrained into people's thinking which breeds more disinflation and low inflation. It develops into a quagmire that is difficult to exit. In addition, the Fed cannot maintain a ZIRP policy forever since it needs higher rates so they can be cut for the next economic downturn. Right now, the Fed is talking a big game puffing out their chest about the new inflation averaging schtick, but they have little ammunition available if the economy rolls over. The obscene Keynesian experiment began under Fed Chairman Bernanke in March 2009 with QE 1. The Federal Reserve stepped in to save the stock market to protect America's wealthy class. And thus began this sick path to the present day with the country mired in debt and 20 million people out of work. In 2012, if memory serves and it may not, Bernanke started the inflation goal talk of +2% and that was cast in stone. But the central banker magicians need some more phony smoke and mirrors stuff to keep the party going. Thus, inflation averaging is now born. Instead of the +2% as a ceiling where Fed tightening would be expected to begin, Powell says inflation should be allowed to overshoot the same relative amount of time as undershoot so a +2% average inflation is achieved. Since inflation has ran below the +2% target for many years, the Fed is saying they plan on keeping rates low and pumping the markets for several more years. A tightening path is so far out in the future you cannot see it. These people are sicko's. The crony capitalism system is a joke. Obviously, the concern would be that as the Fed allows inflation to run hot at some point in the future, does it get away from them? The answer is probably yes since the US likely has hyperinflation in its future say 2 to 5 years down the road when the velocity of money kicks in like crazy. Stocks rally on the happy Powell news;he promised a bright new shiny pony and he delivered that gift to the markets. Theeuro was jammed above 1.19so the dollar collapsed to 92.20 pumping stocks to the stratosphere. Cheers erupt at the Eccles Building. The S&P 500 prints a new all-time high at 3509.23 and new all-time closing high at 3508.01. The SPX went above 3400 on Monday and 3500 on Friday. Wow. Kneel and Worship at the Feet of the Central Banker Money Gods! They are All Powerful! The central bankers are the market. The upper trend lines are at about 24.95. XLF prints a HOD Friday at 25.46 and closes at 25.36. The bank bulls are happy about the steeper yield curve.Bears would need to move price below 24.90 pronto, say on Monday and Tuesday, otherwise, the bulls appear in good shape. It would be an extremely negative development if XLF loses 24.90 early next week.
Here is another look at the US dollar daily chart. USD, or DXY, the dixie, is at 93.13. A few days ago, the dollar daily chart was set up with possie d and a bounce was forecasted, despite everyone saying down was the direction ahead, and the bounce occurs due to the positive divergence. The RSI and stochastics are coming off oversold levels which is bullish. The falling wedge pattern is bullish. As price makes matching and higher highs the last three days, the MACD line and stochastics are long and strong wanting another high in the daily time frame but the RSI is negatively diverging wanting price to relax which it did yesterday. Of course, the dollar, like bonds, stocks and all other trades around the world, are waiting to here the wisdom of Pope Powell on Thursday from the virtual Jackson Hole Symposium. Markets are on idle until Powell brings the tablets down from on high and tells global traders how to trade tomorrow. As posted a few days ago, the dollar is poised to recover not only on the daily basis but also on the weekly chart. The only thing that can sink the dollar is Powell. Markets are generally expecting lots of dovish talk about inflation averaging, and overshooting the +2% inflation goal, and more easy money accomodation and so forth, which would send the dollar lower. So expectations are high that Powell will make a grand appearance on the computer tomorrow shown flying along the halls of the Eccles Building on the back of a large white dove tossing dollars into the air that were just printed in the basement. If Powell falls short of these dovish expectations in any way, that may be the catalyst that launches the dollar skyward. Everybody and his brother are short the dollar. The Uber driver and shoeshine boy both said they took entire paychecks and shorted the dollar since it is the easiest trade available. Massive shorts are in the dollar with everyone on Wall Street proclaiming that the US dollar will only travel lower. You know what usually happens when the boat is fully loaded to one side. On the left side of the chart, you see the Feb-Mar stock market crash. Stocks were collapsing in late February and early March as the dollar fell. As the coronavirus (COVID-19) pandemic news intensified, the dollar catapulted higher which sent equities down the rabbit hole creating the fastest market crash in history. The green line shows where Prince of Darkness Powell rode in on his pale green horse and promised to print money forever. The dollar tanks and that created the recovery rally in stocks from late March to present. The lower dollar pumps commodities, gold, silver, oil and metals higher and their associated industries, which pumps the broad stock market higher. Note that as the dollar made the last low, lower than early August, the ADX line moves lower. The ADX is way up at 46 continuing to indicate that the trend lower in the dollar is a strong trend (pink box), however, as the dollar made new lows, the strong trend lower is diminishing. The Aroon red line is pegged in the overbot zone and the green line down at zero both will move in a bullish direction for the dollar going forward. If Powell was not on tap, the expectation would be for the dollar to keep moving higher on the daily and weekly basis and when the shorts begin to panic, the move higher may be like a rocket ship a la March that crashed the stock market, gold and silver. Charts can only build in information up to the minute. If news occurs, the charts have to absorb that news. This is the story for the dollar. Powell determines its fate but what is interesting it is a pay me now or pay me later deal. If Powell succeeds in tanking the dollar, which will help US manufacturers and exporters, it will likely only be a few days or week or so slump. The charts will readjust and set up with possie d again so the dollar would be expected to then bottom say a week or two out rather than continuing its move higher now. The lower band was violated so the middle band at 93.17 was on tap which occurred. The upper band at 93.84 is in play. Since Pope Powell is on tap, the lower band at 92.51 is also in play. The dollar is going to make a huge move out of that tight band squeeze (purple arrows). Tight bands tell you a big move is coming but does not predict direction. The prior two band squeezes were down. Will this third squeeze be down too, or, is it time for a big up thrust to occur? Considering the bubble territory of the stock market, as well as all other asset classes, ongoing rampant complacency, over-valuations, and now the rising dollar, a serious stock market pullback, or crash, is likely at the doorstep. It may happen right now due to a Powell misstep, or, even if the Fed chairman succeeds in pushing the dollar lower to keep the wolf at the door, the dollar daily and weekly charts will likely reset with positive divergence in the subsequent days and the dollar would likely bounce from those lower levels and begin moving higher again. The dollar is ready for a multi-week rally higher despite 99.9% of Wall Street saying the dollar is going to keep trailing lower for the remainder of the year. The most likely scenario is the dollar jumping strongly higher especially as shorts panic, and stocks and gold tanking. A -10% correction in stocks now through September is easily doable if not more. Right now, it is a question as to whether the stock market collapse begins with a Powell mistake, or, if he succeeds in trashing the dollar for a few more days which will only lead to the pullback in stocks, and rise in the dollar, beginning a week or so 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. Note Added 3:25 AM EST: USD 93.17. Euro 1.1809.US stock futures flat. VIX 22.12. The SPX begins the day at the all-time closing high at the 3443 palindrome. The S&P 500 is at an all-time record high printing at 3444.21 yesterday; the highest number in US stock market history. Note Added 5:16 AM EST: USD 93.13. Euro 1.1808. Note Added 5:25 AM EST: USD 93.17. Euro 1.1802. Euro is about to lose the 1.18 level but it is jammed higher. The dollar must remain low to protect America's wealthy class. Note Added 5:50 AM EST: USD 93.07. Euro 1.1816. Note Added 6:20 AM EST: USD 93.06. Euro 1.1819.
With the stock market poised to roll over, the utilities are a useful gauge to assess whether the move lower will be substantive and longer term, or not. The chart above looks like a bowl of spaghetti. It reminds Keystone of mathematics class, or maybe geometry. Perhaps a new art form that is also functional. Anyhoo, UTIL begins the week with a +1% pop to the 818 palindrome. Utes are battling for their life at the 50-week MA at 834. The two key metrics used to assess the utes, as highlighted by Norman Fosback decades ago in Stock Market Logic, are the 50-week MA and the weekly trend which is measured as an uptrend or downtrend depending on the closing weekly price from 15 weeks ago. Humorously, Is that clear as mud? UTIL is at 818 below the 50-week MA at 834 which is an ongoing negative indicator for the stock market despite its euphoric bullish joy. The "SPX 3.4K" hats were handed out yesterday on trading floors but the upside records will not continue unless UTIL moves above 834. The purple circles show the 15-week lookbacks in play now and for the next 3 weeks. If you count backwards 15 weeks, you arrive at the lower purple circle when UTIL closed that week at 744. UTIL is handily above that at 818 so the stock market bulls are walking around with their chests puffed out proclaiming that stocks will run higher. The bulls are correct with the 15-week lookback but cannot do any bragging unless price takes out the 50-week to the upside. The 744 is an easy beat. Next week, the 15-week lookback number moves higher to 764 so the plot will thicken. For the week of 9/8/20 (US markets are closed 9/7/20 for Labor Day), the lookback number to determine the weekly trend in utes is up to 807. Whew, doggie, as Jed Clampett would say. That is around where price is now. For the week of 9/14/20, the lookback number is 827 above current levels. If this was in play now, UTIL would slip into a weekly downtrend. For now, however, and likely the next week, UTIL will probably remain in the weekly uptrend. Things are going to become dicey very fast, however, especially after Labor Day. When UTIL is in a weekly uptrend and above the 50-week MA, that is great news for the stock market as it rallies higher and higher. If one of the parameters fail, stocks will tend to favor more of a sideways move.If UTIL falls into a weekly downtrend, and then price loses the 50-week MA, it is typically lights-out for the stock market for the intermediate term and this failure will usually create a 30-point drop or more in the SPX immediately. The situation now is a bit different. The 50-week MA trap-door is already opened and price has failed. The weekly uptrend is what is holding up the utes like a lamppost holding up the town drunk. Watch the price behavior closely. If UTIL loses 744 this week, it is lights-out for the stock market into year-end. Next week, if UTIL loses 764, the stock market is toast into year-end. For the week of 9/8/20, if UTIL loses 807, the stock market will sink like a stone into year-end. For the week of 9/15/20, if UTIL loses 827, which price is currently under, it is over for the stock market into 2021.At anytime over the next 4 weeks, if UTIL moves above 834, it is party time for the stock market that will go straight parabolic printing record highs that no one would think possible. The chart is not tipping its hand as to which way it wants to go. Just as there is a fine line between love and hate in life, in charting, there is sometimes a fine line between an ascending triangle (green) and a rising wedge (red). The ascending triangle is a bullish pattern. It has a vertical side at, say, 170 points so if price breaks out above the upper base line at 830-ish, that would target 1,000. The rising wedge is a bearish pattern and the collapses can be epic and dramatic (look at all the current stock index charts). You may blink and UTIL will be sub 750 plummeting lower. The blue lines show the ongoing sideways channel in play with price playing around at the top rail for the last 7 weeks. The channel favors a move lower in price to the bottom rail at 750-ish. The chart indicators are not providing any predictive value currently. Everything is lining out sideways, including the 50-week moving average that has been dead flat at 834-835 the last few weeks. Trading volume is slumping off. The brown circles show the distribution weeks occurring since the Feb-Mar crash. That's the smart money handing off shares to the dumb money. Utilities will move lower before, or coincidentally with, the broad stock market. Utes are trending down for the last 3 weeks. Typically, utes will roll over and move lower from zero to 2 months before the broad stock market peaks and rolls over. We are in this window now and the expectation would be for stocks to begin rolling over. As the selling intensifies, watch the utes closely. As equities are thrown out the window, if UTIL stops moving lower, stabilizes and begins to show an upward bias, that tells you the market selloff will not be too bad. Even if it is a correction (a -10% or more collapse), stocks should recover again. If stocks are dropping and the utes travel to Hades with the broad market moving lower and lower, that is immensely problematic for the stock market and hints that the drop in stocks will linger on for many months and perhaps years forward. Utilities will play a key role going forward especially in September. 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 8:30 PM EST:UTIL 810.
The Keystone Speculator's BPSPX Indicator remains on the double-whammy buy signal, however, the bears are pushing hard behind the scenes to finally top the stock market off and send it lower. The six percentage-point reversals are key for the indicator and since we are at elevated numbers, the 70% level is also important. The bulls had reversed the BPSPX by 6 points to the upside and then the BPSPX ran above the 70 level to issue the double-whammy buy signal that remains in progress (two green arrows). The top tick is 80.2. Keystone likes to use the closing numbers; you can see the upper shadow of the one candlestick poking up to 80.4. Taking away 6 from 80.2 is 74.2. The BPSPX drops to 75.4 only a whisker away from a sell signal but the bulls fight off the negativity with the price now sitting at 75.6. The battle continues. The bears need a point and one-half lower to start wreaking havoc in the stock market. If the BPSPX remains above 74.2, the bulls will be fine and the stock market will keep finding a way to bob along at these elevated levels.If the BPSPX drops below 74.2, the stock market is in a sell signal. You will see equities selling off and weakening.If the BPSPX then drops under 70, that is a double-whammy sell signal and the stock market will be falling apart and dropping in earnest perhaps with a dramatic collapse on tap. 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.
Whheeee! Whooopie! Take another swig of Fed wine. Mainline some ECB heroin. Here's some BOJ crack that will really make you fly. Whoopie! Traders become whacked out on central banker easy money booze and drugs and buy any stock with a heatbeat.The SPX prints a new all-time high at 3426.00, on the dot, today, Monday, 8/24/20. Here is a look at the SPX 2-hour chart a new candlestick has just started at 10 AM EST. The next ones will begin at noon, then 2 PM. Despite the euphoric pop this morning, the 2-hour is not impressed. The RSI and stochastics are overbot. The red rising wedge pattern is bearish. The red lines show universal negative divergence despite the new all-time record high minutes ago. There is a tiny bit of juice with the MACD line but clearly the chart is cooked. Price has popped above the upper band, a moon shot, so a return to the middle band at 3390 and lower band at 3366 is on the table.The rampant stock market complacency continues for the last month and a half. It is epic stock market price action.The SPX is a drunkard dancing along the side of the cliff. He laughs and jokes as small rocks fall out from below his feet and fall 600 feet (200 m) below. The stock market says it can do no wrong; it is invincible. The S&P 500 says even if I jump off this cliff the Fed will save me. Moral hazard has arrived. The SPX dances with glee and asks for another swig of PBOC rice wine and another ECB funny cigarette but as he does he loses his balance.....aahhhhh...whoa......aahh..... The SPX is ready to drop. It is long overdue considering the rampant complacency and euphoric bullishness. Stocks should top out anytime over the coming hours, the MACD line may help equities hold on to these current elevated levels, say, into munch time. 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 10:20 AM EST: Woo-hoo!. The SPX prints a new all-time record high at 3426.99 now exactly topping at the 99-cent print. VIX 22.56. The VIX is up marginally but nonetheless both stocks and volatility are higher so one of them is wrong. Note Added 7:38 PM EST: Whoopie! Wheeee! Woo-hoo. Fed Chair Powell jumps on top of the stock market pumping his way to glory. Yee-haw! Powell plans to lay out plans Thursday to pump inflation higher which means perpetual easy money. Stocks jump higher. The SPX prints a new all-time high at 3432.09 and new all-time closing high at 3431.28. Financials explode higher. XLF +2.4%. The VIX ends down at 22.37 (so volatility was wrong today and the stock market was correct) but this is well above the lows over the last dozen days. In other words, the stock market is making new highs day after day after day into and through today but the VIX is no longer making lower lows. That divergence should be respected and monitored. The euphoric bull party continues long into the evening. The Fed is spiking the punchbowl again. Hourly and daily charts remain in neggie d; bulls are trying to keep it all afloat into the Jackson Hole meeting and Powell's comments on Thursday. The complacency is out of control signaling a significant top in the stock market.A Black Tuesday, Wednesday or any day is on the table as well as an intraday flash crash; everyone's playing at the deep end of the pool right now. Are you going to sink or swim? There is going to be some crazy chit going down beginning at anytime. Now through September may be historic and talked about for decades. Don't be surprised if the stock market reverses tomorrow and gives back today's gain plus some. Watch the US dollar. Dixie is heading higher holding above 93 and the daily chart is agreeable to a bit more up. If the massive dollar shorts begin panicking, March redux occurs, the dollar would skyrocket higher, stocks collapse, gold and silver collapse. The dollar is key.Keystone is the only bear remaining on Wall Street (individual positions; the Keybot the Quant robot remains long). As a trader, sometimes it's good to be Alone.
