SPX S&P 500 Daily Chart; Test of Upper Trendline of Sideways Channel at 3800-4150 with Fed on Tap

The stock market choppy slop continues. As per the last SPX charts, the thin black vertical line shows how price topped-out with the neggie d on the RSI, histo and stochastics and the overbot stochastics were also agreeable to a pullback (red lines). The MACD line and money flow, however, remained long and strong (green lines) so there was still fuel in the tank for more upside in price on the daily basis.

Price sags and then forms the Tweezer Bottom hinting at the recovery move higher but that only lasts one day as inflation data and Fed speak sends stocks sharply lower for 2 days then sharply higher for 2 days snaring a bear trap. The chop suey continues.

Price makes the higher high compared to the prior top so the indicators can be assessed for potential negative divergence. The dark maroon lines show universal negative divergence for all indicators as price makes the higher high so the SPX does not have any more upside oomph. There is momentum due to the 2-day upside orgy so that push higher may continue for a couple days.

May trading starts tomorrow so new money comes into the market which helps buoy stocks. The Fed is on tap this week so stocks are usually bullish the 2 days in front of the Fed announcement on Wednesday afternoon. The negatives are the First Republic failure which may occur this weekend. If the banks begin the week on a sour note, the stock market will follow the doom and gloom. If the stock market brushes off the First Republic problems, the positive factors may boost stocks into the Fed decision on hump day afternoon when Pope Powell brings the tablets down from On High and tells traders how to trade. Such is the crony capitalism system.

Price is near the upper standard deviation band at 4179 so that is an upside target. It would also match-up with the February top where the RSI, MACD and other indicators should maintain their neggie d. The multi-month sideways channel of chop at 3800-4150 remains in play with the SPX testing the upper trend line (purple). For the month of April, the sideways channel at 4075-4170 was in play with price teasing a breakout higher (blue) to begin May.

The chart is uninspiring and weak. Price is propped up on soundbites of inflation and Fed speak and the week ahead will be no different. Wednesday will obviously be the big pivot day as Powell speaks. Price may tag 4180 to snag the upper band as traders sit on their hands waiting for Wednesday. The banks will be the major focus. Another top on the daily basis is expected to occur in the days ahead. 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.

AMZN Amazon Weekly Chart; Wild Ride After Reporting Earnings; C&H

Scamazon reports last evening and the bulls were tripping over each other to buy the stock. AMZN popped +12% in an upside orgy so obscene it would make Caligula blush. Alas, minutes into the euphoria, weak guidance is provided and the stock tanks now down -3%. That is a 15 percentage-point move in the last few hours and AMZN has not yet traded in the regular session after the earnings.

The chart shows long and strong indicators except for the money flow. Thus, a few more weeks of upside would be expected until the neggie d forms to call the top on the weekly basis. The sogginess today may create negativity in a couple of the indicators to end this week but the MACD will probably still be long and strong wanting to see higher prices on the weekly basis.

The blue lines show a textbook C&H (cup and handle) pattern. You can fill it with coffee, tea, or booze if you are an alcoholic, and with the brim at 103.40 and bottom of the cup at 84.50 (difference of 18.90), the upside target is 122.30 if price moves above the brim at 103-104, and it did.

Price violated the upper standard deviation line at 111 so the middle band at 97 is in play. The middle band is rising sharply, and considering that there should be a back test of the breakout brim line, price may want to come down for the back test at 103-104 before moving higher again on the weekly basis.

The 50-wk MA is at 107.52 so look for a back kiss of this level as a given. Check that. Price is down to 106.33 in the pre-market down -3.3%. The 104 is not much further for the back kiss.

Remember, if you want to play a breakout from a C&H or inverted H&S (head and shoulders), you buy on the breakout, then you buy on the back kiss, then you buy when price moves higher overcoming the high from the initial breakout.

Amazon will be in focus today but the chart says today and maybe some of next week will likely be a back kiss of the C&H brim line, and then price should rally again on the weekly basis targeting the 122. The happy scenario will rot on the vine if price comes down for the back kiss and falls through 103-104 trending lower again but the indicators prefer up since they are long and strong with fuel in the tank.

Keystone does not own AMZN long or short currently but will look at the long side after the back kiss plays out for a few days and see if it looks good for an entry and potential run to 122. You can use the daily and 2-hour charts to time the bottom in the near-term when possie d forms (charts are negatively diverged now for a few days of down ahead). AMZN is likely not a long buy until the back end of next week or the following week. 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 4/30/23: AMZN ends the week at 105.45. LOD Friday was 104.33 a 104-handle. The 20-day MA that is also the middle standard deviation band at 103.34 is on the table. The brim of the cup of the C&H is 103.40 and needs a back kiss. The 50-week MA is at 107.43 right where Scamazon opened on Friday morning so this is a key level to watch over the coming days. It would be a big positive for AMZN when/if it moves back above 107.43.

NYA NYSE Composite Weekly Chart with 40-Week MA Cross; Bulls and Bears Battle at NYA 15155 to Determine Cyclical Market Control

It's been a little while since the NYA 40-week MA cross chart has been posted. The cross is an extremely important cyclical stock market indicator. The SPX 12-month MA cross is the most important cyclical indicator; it is currently in a cyclical bull with price at 4056 and the 12-mth MA at 3967.

The US stock market has been in a cyclical bear market for all of last year but the last couple-three months has been a transition zone with bulls and bears both battling for their lives. The nod has to still be given to the cyclical bear market pattern until a more convincing break from the sideways shuffle occurs.

Both the SPX 12-mth MA cross and NYA 40-wk MA cross display cyclical bull signals but it is the subject of this post to show you where the rubber meets the road. 

NYA price is at 15229 and the critical 40-wk MA is at 15155 only 74 points away. The moving average is so important that with price this close, surely it has to make a test and touch in the days ahead if not today or tomorrow. It is for all the marbles.

If NYA loses 15155, you will see carnage and blood flowing on Wall Street; the Eve of Destruction as Barry sings. Long stock holders will be crying in their beer opining about why they did not sell as they lose their shirts. It would be a major market failure. Bigtime.

If the NYA bounces from current levels, or drops to the 15155-ish and bounces, that tells you a new stock market rally is starting and stocks will remain buoyant for a while longer. Watch the NYA 40-wk MA cross closely since it will tell you a lot about the direction of the US stock market going forward through the year.

If NYA 15155 fails, next watch the SPX 3967 level mentioned above. If SPX 3967 is then lost, there is no longer any hope. It will be over for the US 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 Friday Morning, 4.28.23, at 7:30 AM EST: NYA took off like a banshee to the upside yesterday to 15432 as part of the big orgy rally. The above analysis remains in play. There is likely a date with the 40-wk MA ahead still yet. The Fed is on tap next week so stocks will likely chop sideways until Pope Powell brings the tablets down from On High on hump day and tells traders how to trade.

UTIL Utilities Weekly Chart; Utes Fail Again Placing the US Stock Market Back into a Crash Profile

You know the drill since the utes chart has been posted many times in recent weeks. The closing price 15 weeks ago and the 50-week MA at 961.34 are two key metrics. The 15-week lookback dictates whether the utilities are in a weekly uptrend or downtrend and thereby dictate the path of the US stock market. When both metrics fail, a trap-door opens for the stock market and a major substantive down move can occur starting at anytime forward.

If you count back 15 weeks, it is the blue circle at 988. With price at 955, it is a formidable task to get above 988 before week-end. In addition, yesterday, UTIL fails at the 50-wk MA at 961.34 ushering in doom and gloom for the stock market should this dire warning continue.

For next week, the week of 5/1/23, the 988 number becomes worthless and is replaced by the purple circle at 960.60. For the week of 5/8/23, the 960.60 becomes meaningless and is replaced by the brown circle 15-wk lookback comparison number at 967.82.

Are you following this or are your eyes glazing over? Since 960.60 is the key number for next week, of course along with 961.34, you will have a heads-up on next week at 4 PM EST tomorrow. You know UTIL must be above 960.60 by 4 PM Friday when the stock market closes for the week to give the bulls a chance next week.

If UTIL ends this week below 960.60, that tells you that next week is going to start and/or maintain a sour mood. It gets easier for next week. The 960.60 is close to the 50-wk at 961.34. Therefore, take a big purple crayon, because they taste the best, and draw a line through 960-962.

For next week, UTIL must be above 960-962 for the bulls to stop the selling in the broad market. If UTIL is below 960 next week and trending lower, there will be Hell to pay in the US stock market going forward. You can check this week's closing price tomorrow afternoon for UTIL and have a heads-up on next week (since price begins Monday at that 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.

Note Added Friday Morning, 4/28/23, at 7:24 AM EST: UTIL stages a late-day rally nudging higher to 963.39 so the crash profile for stocks is back off the table (this whipsaw behavior never occurs but is reflective of the stock market chop suey this year). The 960-962 bull/bear line in the sand is in play for all of next week and at 4 PM EST today you can find out if the bulls, or the bears, have the upper edge.

Note Added Saturday, 4/29/23: UTIL ends the week at 959.61 below the critical 960-962 bull/bear line in the sand that is in effect through next week, so the crash profile for the broad stock market is back on the table going forward. Fun times. The Fed circus comes to town Tuesday and Wednesday so hump day afternoon is when the story will be told by Pope Powell.

VIX Volatility and SPX S&P 500 Daily Charts; Traders Most Complacent and Fearless Since US Stock Market Topped-Out 16 Months Ago

The business media is all a flutter about the VIX, the so-called "fear gauge," losing its luster as a stock market indicator. The rise of zero-days-to-expire options is taking some of the money that used to buy and sell the VIX. Traders choose to gamble on 0-DTE instead of the VIX. Less interest in the VIX causes prices to drop and analysts and pundits to proclaim that the VIX is dead and there is a new 0-DTE sheriff in town that will tell you when to be happy and when to worry.

Data sets will still exhibit the same trend even with less data provided. Of course you cannot take an extremely small sample size but at these volumes, there is nothing wrong with the VIX. Keystone ran into this when writing the 3-year Coronavirus Chronology when pundits proclaimed that less data, in this case COVID-19 cases, hospitalizations, deaths, etc..., prohibited anyone from forecasting trends. The idiots were wrong. The trends were still there (Keystone forecasted the developing COVID-19 infection waves around the world during the pandemic and warned governments to prepare for the pending outbreaks) and they will be there with the VIX.

VIX drops to a 16-handle not seen since the US stock market topped-out 16 months ago. Sweet 16.

The chart shows that all the tops since late 2021 come with the VIX at 19-ish or lower. Conversely, all the market tops occur when volatility spiked above 31-ish. A high VIX represents volatile markets which is a watered-down way of telling clients that are long stocks that they are losing their shirts.

The choppy slop in the stock market is ongoing since the tail-end of last year. As the 0-DTE options take hold, you can see the choppy sideways slop in the VIX. Nonetheless, volatility drops to below 17 by a hair in February marking a top in the stock market (complacency) and the 31 in the VIX in March identified the bottom in the market as traders and investors sold stocks worried about the end of times (panic).

The VIX drops to the 16-month low and it will signal a top again it is only a question of where the SPX peaks. The fractal from August-December may repeat for February-April (blue boxes). The VIX drops lower in December but note that the SPX was not higher (the VIX and SPX move inversely more than 90% of the time). The December swoon quickly followed.

The same fractal repeats now with the VIX dropping below February's low but the SPX is not above the February high. Will there be a May swoon like December? The old Wall Street adage says, "Sell in May and go away."

The VIX will remain a useful stock market indicator. The spikes up and down may become more sharp but the trends and forecasting insight should remain as the chart displays above. Earnings are important this week with one-third of the S&P 500 stocks and nearly one-half of the Dow stocks reporting. 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 Daily Chart; Topping Process at Top Trendline of Multi-Month Sideways Channel at 3800-4150 Continues

The topping-out drama on the SPX daily chart continues. The negative divergence on the SPX 2-hour chart along with the neggie d (only the RSI, histo, stoch's) on the daily conspire to create the sogginess during the tail-end of the week of course ushered in by the peak of the new moon.

But the price action remains messy. April is chop suey directionless markets as evidenced by the four sideways moving averages. This year is choppy slop. The shorter term 20-day MA is ramping higher following price but the 50-day MA remains flatter than a newlywed's souffle.

The SPX 2-hour chart receives its neggie d pullback but the drop is unimpressive and minor in nature. The 2-hour chart is staggering sideways like a drunk in Times Square last night. The 2-hr chart may be waiting for something (a potential nudge higher in price).

The daily chart above shows the multi-month major sideways range at 3800-4150 with the thick purple lines. Keystone likes purple crayons since they taste the best. Let's pick apart the topping action to see what is going on.

Tuesday is the high candlestick that reversed intraday, thus the black body. That top-tick in price is 4169. Since price made this higher high at 4169, you can look at the chart indicators to assess potential negative divergence to figure out when the top is in. That top tick in price corresponds to the red and green lines for the indicators but one day back from the thin black vertical line.

Thus, as price made the high, the RSI was neggie d (sloping down although it is sideways), ditto the histogram and stochastics. In addition, the stochastics are overbot agreeable to a pullback. The RSI is not overbot. So the neggie d conspires with the universal neggie d on the 2-hour chart to create the sogginess in the US stock market in the back half of last week.

Note that when price top-ticked, the MACD is still moving higher ditto the money flow. Both still have some upside fuel in the tank. The day after the top, price comes up to suggest a matching high but just does not have the oomph or gravitas to reach the 4163-4169 again. If you do say that price has made a matching high again, and it is close enough for government work, follow the thin black line down and you see that the indicators are all neggie d except for the MACD line.

Since the MACD line still has some fuel vapor in the tank to help price move higher again, even on the day after the actual peak in price, it is a moot point to be concerned if the day after's price is a matching high or not. What does all this mumbo jumbo mean? It means that you are working in a lumberyard instead of an advanced physics laboratory. It means that price may want to come up one more time for a look at 4163-4169. Universal negative divergence is not yet in place in the daily time frame.

The blue circle shows a potential Tweezer Bottom pattern that should excite the bulls and help price nudge higher to tease last week's top again at 4163-4169. The higher MACD wants another price high and when the SPX comes back up, the MACD will then likely go neggie d to call the top in the daily timeframe.

The RSI has to be watched, however, since waiting for the indicators to all line-up is sometimes like herding kittens. The RSI will need to stay neggie d. If it ventures higher to touch the overbot territory, it will add a few days of life to the topping process.

The SPX violated the upper standard deviation line so the middle band, which is also the 20-day MA at 4092, is in play as well as the lower band at 3974 moving higher. The SPX made it down to 4113 last week only 21 points from the middle band. Thus, price may sneak lower to touch the middle band then run higher again on the remaining MACD fuel, or simply rally as the week begins and then roll over as the days move forward down to the middle band and lower. Any pullback will have the flat 50-day MA at 4034 in its sights.

The sideways stuff continues but she is close to topping-out in the daily time frame which will kick-in the negativity and allow the put/call ratios to spike higher filling minds with fear and panic. The Keybot the Quant robot is short right now and tracking chips and banks with interest so these two parameters are controlling the show. 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 4/26/23: SPX LOD 4049.

Keybot the Quant Turns Bearish

Keystone's trading robot, Keybot the Quant, flips bearish yesterday afternoon at SPX 4118. Utes, copper, commodities, chips and banks are all that matter these days.

Keybot the Quant

SPX S&P 500 Daily and 2-Hour Charts; Assessing Short-Term Top Likely At Hand

It has been interesting following the SPX looking for the top since the put/call ratios and other metrics indicate ongoing complacency. Utilities dip back into failure mode placing a significant pullback (crash) on the table going forward. The stock market stumbles sideways like a drunk in Times Square last evening with the 2-hour and daily charts setting up with negative divergence. The top is not in until you see the neggie d.

On the 2-hour, you see the rising wedge pattern (bearish), overbot stochastics and universal neggie d across all indicators (red lines). Therefore, price needs spanked-down, and sogginess enters stocks on Friday. Late day, the last candlestick shows price coming back up to back kiss the lower trend line so a bounce or die decision is being made.

The SPX may want to bounce and return inside the wedge but that will likely only lead to another top in the hours or day or so ahead. Note the 4 tests of the RSI on the 2-hour chart. It will be a big deal if the RSI slips into bear territory below 50% (you will know that the rout is on). Ditto with the stoch's. The 2-hour chart is content with topping-out now or any day forward.

On the daily chart, the two thick purple lines show the ongoing multi-month sideways channel at 3800-4150 chewing up bulls and bears alike. Keystone likes purple crayons because they taste the best. Obviously, it is a big deal if price broke out above 4150 (bulls would cheer), or conversely, if price collapses from 3800 (bears would cheer). The bell will toll some day forward, will it toll for thee?

The red rising wedge is bearish. Price is teasing the multi-month sideways channel top trend line at 4150 deciding to bounce, or die. The February high was 4175-ish and price came all the way up from the bottom of the channel at 3800 so you would think price would at least knock on the 4175 door to say hello (thin red line). Negative divergence cannot be assessed until price makes a higher high. Thus, even though the MACD line is below where it was at in February, it is not neggie d over that 2-month time period. However, should price tag 4175-ish, the MACD line would be immediately negatively diverged across the last couple months creating moire negativity going forward.

Over the last few days on the daily chart, price rallies and the red lines clearly show neggie d for the RSI, histogram and stochastics. It is weak that the RSI could not at least get into overbot territory. If there is good news from the Fed or elsewhere, since the markets are news-driven and emotional these days, the RSI may seek the overbot territory but right now, the RSI is weak considering the rally.

The MACD and money flow remain long and strong wanting to see another high in price (perhaps 4175-ish). So a jog move may be needed such as up on Monday, down Tuesday, up Wednesday for the top. It is OpEx week so stocks would be expected to rally from a Tuesday low into a Wednesday high. That may be the last hurrah when all the indicators on the daily chart go neggie d, and you will know the top is in on the daily basis.

Price has violated the upper band (yellow) so the middle band at 4044 and lower band at 3894 are on the table. Note how the moving averages are lining out sideways on the daily chart reflecting the sideways price action the last few months. Chop suey. The slope of the 150-day MA indicates if stocks are in a cyclical bear or bull but has been oscillating in each camp since January. By definition, price will need to go sub 3925 to guarantee that the 150-day MA rolls over lower to continue the over one-year bear market. Other metrics, such as the SPX 12-month MA cross and NYA 40-week MA cross are indicating a cyclical bull market currently but we are in a transition period where the jury remains out.

The Aroon and CPC and CPCE put/call ratios are simpatico. The green bullish line is 100% at maximum euphoria with bulls believing higher prices and a big rally is ahead. Ditto the bears. The red bearish line is down near zero so all the bears have left town and agree that the bulls are right and stocks have nowhere to go but higher. These are contrarian indicators. The Aroon and put/calls indicate complacency and fearlessness with buying stocks despite all the waxing of worry and fear you hear on television and the internet. Traders and analysts are talking fear and then 10 minutes later buying 5 blocks of Apple.

The blue fractal may repeat for the Aroon; she may be topping-out just like the February top. The ADX indicates that despite this huge upside rally, it is NOT a strong trend higher. The ADX treats the recent rally as more of the same with price likely rolling over again going forward. If the rally had lots of legs, the ADX would be over 20, maybe over 25, on its way to 30. It has barely mustered enough strength to pull itself back up to the high in March at 16. Short-covering has fueled much of the upside rally.

The CPC and CPCE put/calls say a stock market top is at hand any day forward. The utilities broke down again on Friday placing the stock market into a crash profile again. The SPX daily chart is topped-out now, or will likely top-out early to mid-week, of course depending on any news from the Fed that controls the stock market in the crony capitalism system.

There is lots of excitement coming. The politicians will begin playing more games with the debt ceiling drama going forward creating market angst. For the last few days, the bump higher in prices was met with shorts panicking and covering adding more bull fuel. Most of the weak shorts are likely gone as the Aroon suggests so now we see who has the conviction to buy the bloated turd.

You can feel it in the air. Exciting times are ahead. The universal neggie d on the daily chart will begin the downside party. You have to wait until you see the whites of their eyes. 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 Wednesday Morning, 4/19/23, at 8:30 AM EST: The SPX 2-hour chart is topped-out with negative divergence. This weakness in the hourly time frame is reflected by the soft S&P futures. Utilities remain in failure mode with chips and copper weakening. The SPX daily chart printed a HOD at 4169 yesterday near the prior highs at the 4175-ish area. The daily chart indicators are neggie d except for the MACD line over the last few days that remains long and strong. Ditto money flow. The MACD is negatively diverged over the last couple months (if you consider the 4169 high to be a matching high compared to the 4175-ish on the last peak). S&P futures are down -25 points with the opening bell an hour away but another jog move may be needed to top-out in the daily time frame. Usually, stocks rally from a Tuesday low to a Wednesday high during OpEx but today is also the new moon peaking for the month when stocks are typically soggy so the two create the jumpy choppy slop. You will have to look at the MACD and money flow after the day gets rolling and a new daily candlestick begins on the daily chart. She's close to topping but you may have to be skeptical for another day or two and see if 4175-ish is in the cards. Keybot the Quant is long but hinting that a flip short may occur today. If so, the negativity in the robot would add a lot of street cred to the move lower and likely seal the fate for the start of the move lower for the stock market.

Note Added 4/26/23: SPX LOD 4049.

UTIL Utilities Weekly Chart; Utilities Fail Placing US Stock Market Back into Major Crash Profile

Keystone has posted the utilities chart many times so all of yinz must know the routine by now. The closing price 15 weeks ago with utilities dictates if the utes are in a weekly uptrend or downtrend and this directly forecasts overall market direction. In addition, the 50-week MA is key and also dictates the direction of the US stock market going forward.

The 50-week MA failed in January and then the weekly trend turned negative so there was Hell to pay, and it occurred. However, utes stage a comeback rally as the drama around rate hikes continues. Utilities are susceptible to interest rates since they fund major projects worth billions over long periods of time.

If you count backwards 15 weeks you see the blue circle which is 981.27. Bulls got a lot of work to do to get price above 981.27 but if it occurs, it tells you a huge upside rally will be in play. This is not expected but anything goes nowadays.

The 50-week MA is 962.85-962.90 and price is at 956 clearly failing both key metrics. The trap-door for the US stock market flies open again. The stock market is back into a major crash profile.

The CPC and CPCE put/call ratios remain uber low verifying ongoing stock market complacency. Pundit after pundit wax worry and fear but every one of those a-holes are buying stocks 10 minutes later. In other words, you ain't seen fear yet, but you will. The CPC and CPCE will spike wildly vertical to show that the a-holes are actually experiencing fear and panic and that is when you can think about longs, but not now. NO ONE IS WORRIED ABOUT A MAJOR DROP OCCURRING IN STOCKS RIGHT NOW, but you should be (watch where their money is going not what their pie-holes are saying).

Bulls need UTIL above 962.90 immediately after Monday's opening bell, otherwise, the US stock market is in serious trouble going forward with a major drop (crash) in play. 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 Banking ETF Daily and Weekly Charts

The weekly chart shows the collapse out of the H&S (head and shoulders) pattern that Keystone previously pointed-out. The head of the H&S is 76 and the neckline is at 57 so that is a difference of 19 so the downside target is 38 if the 57 fails. It failed in a big way when the Silicon Valley Bank and others collapsed. Stupid rich kids, from wealthy families that took advantage of the US rigged crony capitalism system to become filthy rich over the last five decades, think they are smart, but they're not. They are stupid rich kids.

The KRE daily chart is ready to run higher on the daily basis due to the bullish falling wedge and the universal positive divergence across all chart indicators (green lines). The bottom standard deviation band was violated so the middle band at 44.06 and dropping sharply is on the table (this may drop to 43.50-44.00 as price comes up to meet it).

The KRE weekly chart, however, remains bearish. The RSI and stochastics are oversold wanting to see a bounce on the weekly basis. Ditto the possie d displayed by the RSI, stochastics and money flow. These positive metrics will combine with the happy possie d on the daily chart to create the rally on the daily basis.

However, after the regionals rally for a few days, they should slump back over due to the weak and bleak MACD and histogram in the weekly timeframe. Remember, the downside target for the H&S at 38 is not yet attained. 

KRE should pop this week on the daily basis but on the weekly basis, price would be expected to roll back over to the downside to 37-39 where a bottom can be placed on the weekly basis (a multi-week rally would then begin). Lots of drama is on tap this week.

Bank earnings are released this week so all eyes will be focused on the financials. Obviously, earnings and other news bites may impact the analysis above but simply modify the forecast, if necessary, depending on the chart adjustments that occur after news hits the wires. Keystone does not have a position long or short in KRE and is not trading the banks or its derivatives currently. 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 Friday Morning, 4/14/23, at 6:18 AM EST: Bank earnings are imminent. The regional banks behave themselves this week waiting for the earnings numbers over the coming days. KRE sits at 43.15 up +1% on the week call it flat. The stochastics on the weekly chart still want to see a lower low in price in the weekly time frame. Keystone's 80/20 Rule says 2's lead to 8's on the way down, so a loss of 42 opens the door to 38. The KRE daily chart shows long and strong RSI, histo, MACD and stochastics so some higher highs in price are expected in the daily time frame.

UTIL Utilities Weekly Chart; Bulls Recover Key Utility Levels

The bears sent the utilities into Hades during February but the bulls stage a major comeback. Both the weekly uptrend in utes (based on the closing price 15 weeks ago; purple circle) and the 50-week MA at 963.72 are taken out to the upside. The 50-wk MA blue line is a trap-door for the stock market so it is a big win for bulls that they climbed back up the gallows and managed to latch the trap-door shut again.

Counting 15 weeks back, UTIL 967.40 is the bull/bear line in the sand for the week of 4/10/23 that determines if utes are in an uptrend or downtrend and this trend impacts the overall direction and trend for the US stock market. Price is at 970.79 when the opening bell will ring on corrupt Wall Street on Monday morning so the bulls are waving flags and throwing confetti all weekend long celebrating their good fortune.

For the week of 4/17/23, the UTIL 967.40 number becomes meaningless and is replaced with 981.27 (blue circle). Thus, several scenarios emerge and each day will further expose the true path forward.

If UTIL remains above 967.40 and 963.72 this week, the bulls are on easy street and the path forward will appear rosy and wonderful for higher stock prices. However, come Friday at 4 PM EST, UTIL needs to end the week above 981.27 to prove that the bulls got game going forward. If UTIL finishes the week ahead below 981, that tells you the week of 4/17/23 will not be rosy. If UTIL finishes the week ahead above 981, the bulls will be celebrating a wild stock market orgy to the upside that will be so obscene it would make Caligula blush.

If UTIL loses 967.40 but then stutters sideways and does not give up 963.72, that tells you the downside does not have much oomph. Utes and stocks will probably recover and UTIL may move back above 967.40. The 967 and 963 numbers are so close to each other that a loss of 963 would be expected if 967 is lost.

If UTIL loses 967.40 and 963.72, major trouble is on tap again since the trap-door reopens. The US stock market will once again be in a major crash profile and worse, the successful back kiss (for utility bears) would confirm that down is the direction ahead sealing the fate of the overall stock market. Thus, within the first 10 minutes of trading on Monday morning, you will know a lot about the stock market.

If UTIL remains buoyant, the bulls will be happy and focus their sights on pumping UTIL over 981 by Friday to create more upside euphoria.

If UTIL loses 967.40 and 963.72, there will be Hell to pay. For now, it is time to enjoy the Easter weekend and play and sing for the cute bunnies At The Hop where the cats and chicks can get their kicks. 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 Friday Morning, 4/14/23, at 6:23 AM EST: UTIL is at 969 after a HOD at 977 yesterday. The 967.40 bull/bear line in the sand number expires today and is replaced with 981.27 for all of next week. UTIL must rally today and end the week above 981 to signal stock market happiness next week. If UTIL finishes today below 981, negativity will be created for the stock market next week.

SPX S&P 500 Daily and Weekly Charts; Assessing Near-Term Top Developing

The week plays out as would be expected. The neggie d spankdown occurs on the 2-hour chart but then the bulls show-up at the tail-end of the holiday-shortened trading week. Stocks float higher to end the week with the new Q2 money at their back as well as the full moon buoyancy and the expected pre holiday weekend joy. Markets will begin showing their hand next week as traders and investors return from the Easter/Passover holiday.

The utilities stage a huge rally over the last two weeks bringing UTIL back above its 50-day MA a major development. This nullifies the Armageddon scenario ahead for stocks. However, the CPC and CPCE put/calls remain subdued indicating complacency and a stock market top at hand which should begin in the coming days. The utility failure over the last few weeks pointed to a terrible scenario ahead for stocks but the recovery in utes indicates that the coming pull back will likely be more of a garden variety pullback of 200 to 400 SPX points from wherever it tops out at.

The major collapse and crash in US stocks may have to wait for a few more weeks or months. Watch UTIL closely because if its good fortune quickly deteriorates next week and the week after, and price loses the 963 level, then the Armageddon scenario for the US stock market will be right back on the table.

The SPX 2-hour chart shows the top occurring and price receiving the negative divergence smackdown (red lines). Price tagged the upper standard deviation band so the middle band at 4098 was on tap and occurs. The SPX hugs the middle band which is also the 20 MA. Note those bands squeezing in tight (gold arrows). A huge move is coming in the 2-hour time frame but the tight bands do not tell you direction.

The 2-hour chart bottoms on Friday but note that the pop is due to only partial positive divergence (green lines). The MACD and money flow remain weak and bleak wanting to see another lower low in price (below 4075). You will have to wait for the 2-hour chart to set up with possie or neggie d again to determine the direction forward in the hourly timeframe.

On the SPX daily chart, price violates the upper standard deviation band so the middle band at 3989 is on the table as well as the lower band at 3824. As price printed the higher high, the RSI, histogram, stochastics and money flow are neggie d conspiring with the universal negative divergence on the 2-hour chart to create the weakness in stocks last week. Note, however, the MACD line remained long and strong so the pullback would be expected to be shallow followed by another matching or higher price high for the SPX since the MACD still has fuel in the tank in the daily time frame.

As traders joyously bot stocks into the holiday weekend, the money flow pops higher for a higher high creating additional bull fuel for price over the next couple-few days. All the chart indicators must be negatively diverged to call a top in a time frame. A textbook example above is the 2-hour chart with its neggie d so you knew a quickie short trade would work in this time frame if you are a day trader. The daily chart is not yet topped-out.

The SPX likely needs to come up to 4125-ish for another matching price high, even if it is only an intraday print, and at that time you can assess the chart indicators to see if all are neggie d including money flow and the MACD. If so, you can call the top in the daily time frame.

The tight bands on the 2-hour chart, that warn of a big price move coming in the hourly time frame, may shoot price up to 4175-ish to match the prior February highs, or, crush price, and begin the downside targeting 3989.

The slope of the 150-day MA is a cyclical stock market indicator. The 150-day MA is starting to curl higher indicating a cyclical bull market ahead. Price is above the 150 for the last 13 days pulling the critical moving average higher. The SPX 12-mth MA cross and NYA 40-wk MA cross are both bullish now indicating a cyclical bull market and the 150-day MA is finally starting to join the bull party drifting higher. The jury remains out for the ongoing 1-year cyclical bear market. April will tell the story and the bulls are gaining ground.

If the 150 continues sloping higher for the next couple weeks, the call will have to be made that the stock market is moving into a new cyclical bull market pattern (weeks and months ahead). If however, the negativity kicks-in, especially due to the ongoing trader complacency, the three metrics can easily roll over and continue verifying the cyclical bear. The next 2 weeks of trading are critically important and will likely tell you the cyclical story ahead for the US stock market.

So what does all this mumbo-jumbo mean? The utes recovering the 50-wk MA (trap-door) is bigtime for the bulls. It takes the major crash scenario off the table, for now. The low put/calls, however, continue hinting at a top to occur any day ahead and a likely 200 to 400 point drop in the SPX on tap. Talking heads may be speaking worry and fear but 10 minutes later they are buying stocks. Watch what people do not what they say; typically the greedy humans will lie.

The US stock market may top-out any day forward due to ongoing complacency and experience a 200 to 400-point retreat in the S&P 500. The daily chart says price needs another 2 or 3 days to come back up for a matching price high and for the MACD and money flow to go neggie d so the top can be called in the daily time frame.

The bulls can create several more days of upside if they can boost the RSI to a new high as price comes back up. The RSI is not overbot on the daily chart as yet so that is something that still may occur. If the bulls are joyous after the holiday, it should only be a few-day event that will further set-up a top due to complacency. The put/calls have been languishing lower so the stock market top is likely close at hand maybe on tap for Wednesday or Thursday. Simply watch the charts as described and you will be able to call the top yourself. 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 Friday Morning, 4/14/23, at 6:09 AM EST: Softness occurs but the bulls stage a big rally yesterday bringing price ever higher. You have to wait for the neggie d to know the top is in. If you bring up the 2-hour chart, you see the negative divergence so that is a top in the hourly time frame and S&P futures are lower this morning. Bank earnings are on tap that may create drama. If you bring up the SPX daily chart, the RSI is flat but does hint at momentum higher. The MACD and money flow remain long and strong. The histogram and stochastics are neggie d. Thus, a couple jog moves will top price out on the daily chart that likely wants to see that matching high at 4175-ish. Down, up, down, up would set the top in the daily time frame with universal neggie d so the top for the stock market in the daily time frame is next week. CPC and CPCE put/calls drop further verifying the ongoing complacency. Once the SPX starts dropping, there is likely 200 to 400 points of downside ahead if not more perhaps testing and even falling through 3800 which is the lower trend line of the multi-month sideways channel at 3800-4200.

CPCE Put/Call Ratio and SPX S&P 500 Daily Charts; Assessing Arrival of Substantive Top

SPX Daily Chart

The CPC and CPCE put/call ratios have been indicating ongoing complacency and fearlessness in the stock market despite analysts and pundits feigning worry and fear on television, the internet and in print. They wax worry but 10 minutes later are buying stocks.

The put/calls indicate a stock market top at hand. The failure in the utilities (scroll back to look at previous charts) is a bigtime warning signal for stocks. Despite this ominous backdrop, stocks rally for 3 weeks on the Fed talk, inflation and job data, and other drama creating choppy confusion.

The charts show a bunch of little circles. They look like tiny bubbles, in the wine, as Don would sing. You have the warnings from the put/calls and utes that a world of hurt is on tap for stocks. The next step is waiting for the negative divergence to set up on the SPX daily and 2-hour charts so you can call the top.

First, let's take a quick look at the signals. The green circles indicate panic and fear so that is the time to buy stocks or at least nibble on longs. You want to run toward the burning stock market as everyone else is running away with their hair on fire. You can take their shares off their hands as they swear they will never own a stock again. Of course, the panic and fear abates, and stocks then rally nicely, and more sucka's are born. There's one born every minute, you know.

Conversely, the red circles show complacency and fearlessness about owning stocks. The Federal Reserve saves the day all the time so 'what, me worry?', as Portugal The Man sings? The dip-buyers are worried they are missing the next rally. Short-covering has popped stocks over the last 3 days. Late Friday, you can tell some short players were holding-on all day waiting for stocks to reverse but they did not. These traders started covering into the close unwilling to hold the shorts over the weekend and whammo, the indexes went vertical as others panicked about the shorts they were holding and ran for their lives.

As February started, you see the complete relaxed attitude about owning stocks. The CPCE was below 0.50 with everyone throwing darts at the stock pages to buy stocks after the robust January rally. They concluded that every stock goes up. Everything was expected to continue higher but, as the CPCE chart showed, the euphoria was overextended and the day of reckoning occurs with the collapse in stocks starting with February.

Another panic bottom occurs as March begins so that is time to buy and a strong 3-day rally occurs. However, price reverses hard as traders rush to short the market no longer believing in the January joy. The complacency did not reappear in early March and stocks were driven lower for the March low.

Note that when the market top occurred as February started, the neggie d (red lines) was in play also ready to smack price lower. The MACD line had a hair more fuel in the tank, however, and that is why the SPX price comes back up over the last 3 weeks.

The mirror image occurs in March. Price comes down for the two lows, and positive divergence (green lines) is in play ready to launch price higher, but note that the MACD remains weak and bleak and wants to see a lower low in price on the daily basis going forward.

The low in the CPCE on 3/20/23 identifies a substantive top but after only a one-day pullback of about 70 points, stocks were off to the races higher again on the Fed drama and data daily drama. The CPCE only made it up to 0.76 so the buying of stocks did not involve panic and fear. It was mainly dip-buyers afraid of missing out on the rally and then shorts covering adding rocket fuel to the rise in prices.

The CPCE comes down again to 0.59 since everyone is fat, dumb and happy about owning stocks not worried about any collapse of any great significance. This brings us back to the statement above that to call the top we need to see the neggie d on the daily and 2-hour charts.

Looking at the SPX daily chart indicators you see green lines showing higher sloping lines that are long and strong. The sole red line is the stochastics that are overbot and agreeable to a pullback in the daily time frame. The others are gun-ho for higher prices. It is likely that a few days are needed to jog a top into place. 

The blue rising wedge points to an equal top coming at 4175. It would not take much to get there. Another short-covering rally would do it. If price slumps for a day or so, then up again for a day or two, then the indicators may start to position with neggie d, then down for a day or two, then back up for a day or two when the MACD will likely be last to go neggie d and call the top in the daily time frame. So adding those days together are about 8 days of jogging topping action. This puts a top in the daily time frame late in the week ahead or in the following week say 4/6/23 through 4/14/23 as a guestimate. The charts will tell you the exact timing as it occurs in real-time.

The SPX 2-hour chart works in a faster time frame obviously so it will likely top-out Monday or Tuesday and then experience fits and starts until it tops out in sync with the daily probably about a week out.

The SPX has violated the upper band so the middle band at 3965 is on the table and lower band at 3840. Despite the sharp rally for 3 weeks, the ADX remains flat or lower at 12 indicating that the upside move in stocks is NOT a strong trend higher. The ADX needs to move above the high-20's and 30 to indicate that an up, or down, trend is strong. The stock market chops sideways the last few months indicating that no strong trend exists. This is correct, stocks are choppy sloppy sideways. Directionless chop suey.

The retreat in February and early March due to the stock market complacency and neggie d was a loss of about 400 SPX points over 6 weeks time. Once she begins rolling down hill again, this drop should be matched and bested since utes have gone to Hell.

Since news and emotion rules the day and has helped generate the bull rally, this can work in the opposite direction as well. A top in the US stock market should occur any day forward (on negative news) or within a 5 to 10 trading day time frame when the daily chart sets up with neggie d (and you will know this occurs by simply watching the chart develop).

On a side note, the slope of the SPX 150-day MA is a critical cyclical market signal and you can see it continuing to slope flat or negative (purple box). The call has to remain a cyclical bear market for now but with prices running above the 150, by definition, the moving average will curl higher. The two other major cyclical signals, the SPX 12-mth MA cross and NYA 40-wk MA cross, are both in cyclical bull market territory so the 150-day is the straggler. All 3 need to agree to chart the new road ahead which is starting to look like a cyclical bull market but not so fast.

The jury remains out and as explained with all this windbag mumbo-jumbo, there is drama ahead. With the utilities in a major failure which is a bigtime negative for the US stock market going forward, and the put/calls showing complacency, and many of the shorts getting washed-out over the last few days unwilling to short again, and the SPX daily chart setting up with neggie d over the coming days, the cyclical bear may begin growling very loudly. The SPX would need to drop below 3960 to prove the bears got game.

Take it day by day going forward and watch for the neggie d to develop on the SPX daily chart. Do not be surprised if markets top out any day forward and a drop of over 400 SPX points will occur going forward. If the neggie d is allowed to set up first over the coming days, say by Good Friday or Easter Monday or Tuesday, and then bad news hits, that will be double-whammy tanking stocks far lower. The holiday now adds another layer of drama in the market.

Speaking of Good Friday, which was actually bad for Jesus that day, US markets are closed. Stocks tend to float higher into a holiday weekend so the bulls smile. The full moon is Wednesday and stocks are typically bullish through the full moon so the bulls smile again. Passover begins Thursday so trading will probably be thin as the week plays out.

If the timing ends up right, the Easter Bunny is going to lay a big brown egg on the New York Stock Exchange. 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, 4/4/23, at 5:36 AM EST: The bull orgy continues with commodities and copper providing further buoyancy in the stock market. Oil pops on OPEC news about cutting production. New money typically flows into the stock market to begin a new quarter which creates buoyancy in stocks. Bring up the SPX daily chart so you can note the top-forming process. Price makes a higher high. The RSI is only up a hair but you still call it long and strong. Ditto the histogram and MACD line. The stochastics, however, are cooked in overbot territory and negatively diverged. Money flow is also negatively diverging against price. So money flow and stoch's say the top is in for the daily time frame but the RSI, histo and MACD say not so fast; a few more days are needed. Bring up the SPX 2-hour chart. Price makes the higher high. The indicators are all neggie d except for the MACD line which is typically always the last indicator kitten that needs herded to make a call. Thus, a jog move is needed on the 2-hour (down-up in price) to turn the MACD neggie d. This negativity on the 2-hour will then conspire with the negative stochastics and money flow on the daily chart to send stocks lower. The 2-hour predicts the top in two candlesticks which is 4 hours so this afternoon stocks should top out. Stocks would be expected to drop for a day or two due to the neggie d but the long and strong RSI, histo and MACD on the daily will bring price back up in the daily time frame so another high in the SPX is ahead say 2 or 3 days out or so, once the 2-hour chart's negativity plays out. Stocks are usually happy through the full moon and before a holiday weekend so that jives with stocks recovering, say, Wednesday afternoon or Thursday into the holiday (Good Friday). Thus, the top in the daily chart, that will kick-in the put/call and ute negativity, is likely on tap next week. If you are a nimble day trader, you can take a short flyer once you see the MACD going neggie d on the 2-hour chart which may be late morning or after lunch today but do not marry the position it is only a quickie short trade since the bulls should boost stocks again for a few days to create the top probably next week. As always, positive news may impact the charts and extend the top and negative news may simply kick-in the negativity desired by the put/calls and utilities and begin the downside for the stock market in earnest. The Easter Bunny, Peter Cottontail, has a pants-load but for now keeps hopping higher.