The stock market has finally come off of its Federal Reserve-induced perch. Two key SPX metrics are at play that have been out of the picture for a while; the 10-month MA and 12-mth MA. The 10 is watched by old-timer's and is programmed into many algorithms. The 12-month MA is important because if you were only allowed to look at one indicator to gauge stock market direction over many months or a few years time, it would be the 12-month MA on the S&P 500 (the S&P 500 Index, SPX, is the United States stock market). The 12 is programmed into Keybot the Quant.
The 10-mth MA is at 4423 and since price is below at 4383, the moving average will nudge higher if price elevates, thus, use 4423-4430 as key resistance. The 12-mth MA is at the 4334 palindrome, but this would nudge lower if price drops, so call it 4330-4334 as key support. This is the story for the stock market and all you need to know.
Bulls win big if the SPX pops above the 4423-4430 overhead resistance heading higher. Bears win big if the SPX drops below the 4330-4334 support heading lower.
If the bulls win, watch NYA 16,700. If stocks are rallying, the bulls will have to prove it is a real relief rally by pushing NYA above 16,700. If stocks are rallying and the NYA moves higher, but stalls at or before16,700, and rolls back over to the downside, that would be extremely ominous and prices would be expected to take out the SPX 10 and12-mth MA's and the market likely collapse.
If the SPX price drops from here, right now, today, and takes out the 12-mth MA support at 4330-4334, it will be lights out for the stock market. The SPX 12-mth MA was ruptured already but the bulls managed a stick save. If the SPX fails at 4334-ish again, the Grim Reaper will likely appear.
The chart above shows universal neggie d in play and the Aroon at maximum bullishness; both of these set-ups are extremely bearish. Since the chart is a monthly chart, it is forecasting long-term sh*tty stock prices for the coming months and even year or two.
January's candlestick thus far is also an outside reversal edging higher in price this month but likely finishing below last month's low. Sometimes the chart will go into choppy slop after this candlestick formation but it is ultimately negative. Thus, the stock market continues its negative bias from here forward, or, the monthly chart chops sideways for 2 or 3 months, going nowhere in price, and then the SPX collapses into a multi-month negative bias. Plan accordingly.
In the near term, stocks will be massacred if SPX 4334 fails. Bulls will stage a relief rally if SPX 4423 occurs but the NYA will then have to overtake 16700. If NYA fails at 16700, stocks will reverse and fall apart and likely come down extremely hard and fast. The SPX is at 4383. 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 12:52 PM EST: Whoopsies daisies. SPX drops to a LOD at 4340 only 6 points from disaster. The bears are pushing for victory with the knives out. Can they do it? The selling is machine-driven from noon to 12:45 PM, orderly and a straight line lower for 45 minutes. The stage is set and there is 3 hours of trading remaining in the session. A bounce occurs because the fourth 65-minute trading segment starts at 12:45 PM and the robots receive new directions. Next pivot is 1:50 PM and then 2:55 PM EST. Price may reverse or accelerate in the same direction at these times give or take a few minutes. There may be excitement on tap today. The Pointer Sisters are excited and they can't hide it. A bloodbath may be on tap if SPX 4330-4334 fails. The bulls are creating buoyancy in the stock market with copper today. Watch CPER 26.90 with price at 27.00 only a dime above. If CPER fails at 26.90, the SPX will definitely slice down through the 12-mth mA at 4334, and the bloody carnage will serve as the bear's dinner.
Note Added 1:05 PM EST: Whoopsies daisies. The SPX is taking out the 4340 LOD.
Note Added 1:09 PM EST: Whoosh. The SPX drops to a new LOD at 4332 on top of the 12-mth MA at 4331-4334. This is it, folks. Do you want it bears? You have it on a silver platter. All you have to do is take it.
Note Added 1:10 PM EST: SPX 4337. Copper and stocks are moving hand and hand. CPER is sticky at 27.00 that is why the SPX did not fail at the 12-mth as yet. Bears need CPER to go sub 26.90 since it will take down the whole house of cards. The drama continues. The tension builds. Do the bears have the strength or will they fold like a cheap suit? Whoa. Check that. Air pocket. CPER drops to 26.95 heading lower.
Note Added 1:10 PM EST: The SPX drops to 4331. The 12-mth MA at 4331 is giving way..... Bears, it is time to sh*t or get off the pot. Quit goofing around. Do you want it or don't you? CPER 26.96.
Note Added 1:26 PM EST: The SPX collapses through the 12-mth MA at 4331 tumbling to 4317. Failure. CPER is at 26.96 so bears need copper to fail 6 more pennies to kick in the bigtime carnage. CPER just touched 26.92. Come on, bears. You sliced down through SPX 4331, now take out CPER 26.90, and victory will be yours. Don't you love the smell of napalm in the afternoon? The big guns are coming in now, boys, take copper out and a bloodbath begins. Some day this stock market is going to end.
Note Added 2:21 PM EST: CPER continues to play around at the 26.90 bull/bear line in the sand now at 26.91. The bears need 2 more copper pennies.. The SPX rallies to 4350 regaining the 12-mth MA at 4331, but then collapses again, and now sits smack-dab on top of the 4331 line in the sand. Bulls win if SPX pivots higher while bears win on the pivot lower. The S&P 500 is hesitant right now because it is waiting for copper to decide what it wants to do. The SPX pivots higher from the 1:50 PM switchover into the fifth 65-minute trading segment of the day. There may be a price pivot at 2:55 PM as the sixth and final 65-minute trading segment begins give or take a few minutes. CPER fails through 26.90, then bounces, then fails again, now at 26.89. CPER 26.90 is for all the marbles. Bears need to seize the day and get the job done. Can they? It's a battle. Both sides will be raging between 2:50 PM and 3:00 PM minutes away. It depends if the robots arrive with buy, or sell, orders.
Note Added 2:44 PM EST: CPER is 26.90 sitting on top of the key 26.90 pivot. SPX is at 4336 above the 12-mth MA at 4331. If the bears do not want it, the bulls will take it. The transition to segment six begins.
Note Added 5:21 PM EST: SPX ends the session at 4327 a bear victory with the S&P 500 closing below the 12-month MA at 4331. It is a very negative development. CPER ends the day at 26.92 only 2 copper pennies above the 26.90 bull/bear line in the sand. The bulls and bears agree to a truce for a few hours. Bears win big if copper futures trade lower overnight because CPER will then tank during the regular session and stock market carnage will follow. If copper futures trade higher, that is a hint that the bulls plan to rally stocks into the weekend. SPX begins the Friday session (tomorrow) at 4327 and CPER at 26.92. Use CPER 26.90, SPX 4331, SPX4423, and NYA 16700 to gauge the market. These 4 parameters will tell you market direction and magnitude over the coming days. The SPX and NYA are in failure and bearish. CPER (copper) is bullish by a hair. THE FAILURE OF THE 12-MTH MA AT 4331 IS A BIGTIME NEGATIVE FOR THE STOCK MARKET. Each hour the S&P 500 remains below 4331, is another long-term nail in the bull's coffin.
Note Added Friday Morning, 1/28/22, at 8:13 AM EST: Copper futures are lower overnight down -1.6% but off the lows. Thus, S&P futures are tanking -40. It may be an interesting day in the stock market; a Black Friday? Willie, can you lead us in a rendition of The Party's Over? The wealthy class (30 million Americans) drank too much Fed wine over the last 12 years making money effortlessly while the rest of the country (300 million Americans) was screwed. That's the way it goes. The stock market will move in correlation to how prices cross the following key levels; CPER 26.90, SPX 4331, SPX 4423 and NYA 16700. Also watch utilities. Almost forgot to tell you. If UTIL loses 907 (now at 930), the US stock market will seriously deteriorate and if UTIL loses the 9 hundo level a historic stock market crash will be in progress. It will be interesting to see if the Fed can save the day, again.
Note Added Saturday Morning, 1/29/22, at 8:40 AM EST: Wheee! Whoopie! The dip buyers trip over each other buying stocks with reckless abandon each worried that they missed the bottom. Copper failed overnight into Friday morning so you knew there was trouble afoot. Stocks drop but the dip-buying crowd is still there willing to take a flyer. As the overall stock market devolves into a multi-month and/or multi-year bear market, the upside rallies inside a bear market will knock your socks off. When a month is down basically the whole time, like January, the last few days typically finish higher. EOM is Monday. Stocks are usually higher moving through the full mon which peaked overnight into Friday and the rally occurs. The internals of the market are cooked, crispy-fried. Note how the bulls ran the SPX up to the 200-day MA at 4435 price closing at 4432 (thus, the 200 continues serving as overhead resistance). But you know the two numbers that actually matter; the 10-mth MA at 4427-4428 and 12-mth MA at 4331-4339. The S&P 500 overtook the 12-mth MA at 4431 and then the bulls put the pedal to the metal into the closing bell overtaking the key 10-mth MA at 4428 by 4 points. The SPX is parked at 4432 for the weekend. The only parameters in the bull camp are utilities and commodities. Watch copper futures again overnight Sunday into Monday morning. A rally will likely only continue if copper rallies. As the top of this windbag post explains, now that the SPX overtook the 10-mth MA at 4428, the NYA must overtake 16700 (now at 16400) to prove that the rally has legs. If the NYA blows through 16700, the markets are in full-on rally mode and people, and robots, will be piling in on the long side. If the NYA stalls before 16700, and rolls back over to the downside, the SPX will likely re-lose the support at the 10 and 12-mth MA's and a bloodbath and significant stock market crash is likely on tap. The bulls need higher copper.
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