Keybot the Quant Turns Bullish in Final Minutes of Trading

Keystone's trading robot, Keybot the Quant flips to the bull side at SPX 5266 with only a couple minutes remaining in the trading week. The bulls pumped the banks and the Fed held its jackboot on Uncle Vix's neck to send stocks to the moon.

Stocks are going up, going down, going up, down, down, up, just like a Jimmy Reed tune. Hand me that harmonica, Sonny. Bulls will need stronger retail stocks so Amazon is key next week. Of course banks and volatility remains key. Bears need weaker copper and commodities.

Keybot the Quant

Keybot the Quant Turns Bearish

The Keystone Speculator's proprietary trading robot, Keybot the Quant, flips short this morning at the opening bell at SPX 5278. Volatility spikes and banks sink creating today's negativity. Retail stocks failed last week. Watch the VIX 14.03 and XLF 41.12 bull/bear lines in the sand. VIX is at 13.86 falling below 14.03 over the last few minutes creating positivity in the stock market. XLF is at 40.85 firmly in the bear camp creating market negativity.

If VIX finishes below 14.03, the bulls are regrouping and will try to establish a recovery rally. If the VIX finishes above 14.03 today, the bulls are toast going forward. Plan accordingly.

Keybot the Quant

The Google a-holes are fooling around with the code for the text colors so highlighting is unavailable. People do sh*t work nowadays. American mediocrity is on full display daily. I have a workaround. The *sshole programmers are great at making the user interface more difficult. Jackasses.

UST10Y US 10-Year Treasury Note Yield Weekly Chart; Sideways Symmetrical Triangle

The Wall Street analysts and television pundits proclaim that rates have nowhere to go but up. Maybe they are right and maybe not. Taking a look at the UST10Y yield weekly chart above, the Aroon shows that everyone believing that rates will nudge higher continue to view same, and those not believing that rates would rise have now thrown in the towel also believing that rates will go higher. If you think rates will go higher, how do you like having everybody and his bro, including the uber driver and pizza guy, also believing rates will go higher while no one is at the lower rates ahead party?

For the last few months, the US 10-year yield has been stumbling sideways like a drunk in Times Square on Saturday night. The blue sideways symmetrical triangle pattern is in play. Yield has not yet made a new high so neggie d cannot yet be assessed, although the indicators are uninspiring for a breakout higher in yield. The yield is at the upper trend line of the triangle now so you will know over the coming days and next week if yield can push higher up through the trend line that would then become support, or, yield may hit its head on the trend line and collapse lower remaining inside the apex of the triangle.

The straight side of the triangle is about 125 bips (1.25%). Thus, if yield breaks out higher here from 4.56%, the 5.81% level is the upside target. A lot of times, Keystone likes to use the first touch in for the vertical reference, the light blue line, that is about 100bips (1%). Thus, a breakout higher in yield from 4.56% would target 5.56%.

On the downside, if yield collapses and falls out the bottom of the triangle at 4.25-ish, the downside landing target is 3.00%-3.25%. The chart is not tipping its hand but if yield breaks higher, and the MACD line turns up for a higher high, and the RSI begins higher, yes, higher yields are on the way at least for a couple weeks.

Interestingly, the 2-year yield chart (not shown) is teasing towards prior highs in yield while setting up with neggie d so the anticipation is for yields to likely drop going forward on the weekly basis.

The universal consensus parroted by all Wall Street personalities is that inflation moving higher means yields will move higher and stocks will sell off while lower inflation means lower yields and party time for stocks.

The stock market is setting up for a pullback. The SPX weekly chart is in neggie d so the top is at hand right now (Keystone is short the broad market via ETF's but Keybot the Quant remains long). So what happens when stocks go through a multi-week pullback? Some folks will seek safety which means they will buy notes and bonds sending yields lower. Whozzit? Whazzit? None of the pundits allow this scenario.

Of course that is why it will happen. Stocks will pullback for a multi-week slide lower and yields will drift lower as well. Watch the triangle above to see which side the breakout occurs for yield. The ADX is down in the cellar verifying that there is no strong trend in place for the 10-year yield (instead it staggers sideways).

If you are a budding technician that is learning about charts, here is the Advanced Sideways Symmetrical Triangle Pattern 401 course. Watch for false breakouts because the true breakout will come later in the opposite direction. Sometimes, price, or in the case of the chart above, yield, will breakout, or breakdown, from the triangle hinting at the direction ahead, only to pull an about-face and run back into the safety of the inside of the triangle. A false breakout usually occurs about halfway through the pattern or 2/3rds through it so you always want to be on alert to see if it happens.

For example, for the chart above, yield may breakout a bit higher, but then over the next week roll back over and drop returning to the inside of the triangle. This would be uber important because it is likely telling you that the yield will likely collapse out the bottom of the triangle going forward. Thus, in this case you would buy notes and bonds expecting lower yields.

The opposite can also occur, price, or yield, could fall out the bottom of the triangle but then pull a reversaroni and head higher back into the safety of the triangle. This behavior tells you that price, or yield, whatever the chart is, will likely explode up and out of the triangle going forward so you would position for that trade.

June should be a lively month and reward stock market bears and note and bond bulls (higher note and bond prices lower yields). Keystone does not hold any positions in Treasuries currently. Any future trade would be expecting higher note and bond prices and lower yields in the weekly timeframe ahead such as buying TLT or shorting TBT. You can use the same sideways triangle study on TBT and TLT to see how those charts progress especially TBT. 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 7:22 PM EST: The 10-year note yield finishes today at 4.62% a gain of 6 bips. Notes and bonds were sold (prices lower yields higher) as stocks move lower; thus, same-o expectation of every pundit on Wall Street but one day does not tell the tale. The 4.62% is sitting on that upper blue trend line of the sideways triangle pattern so the next few days of trading likely tells you the direction of yield for the next few weeks ahead. That is exciting. If you had to forecast up or down after today, the obvious conclusion is up for yields going forward but cool your jets, Sonny. You have to give it a few days. Yield may continue higher and never look back. Yield may pop a bit tomorrow to end the week forecasting a continued move higher only to be a fake-out move discussed above and for yield to return to the inside of the triangle and then collapse out the bottom. Yield may simply reverse right away as it struggles with the upper trend line resistance and fall down but remain within the safety of the apex of the triangle. Simply watch it for the next few days and it will tip its hand. As mentioned, stocks are likely going to sh*t the bed and collapse,sell Mortimer sell, so traders will be selling stocks and then some of that money will go into the perceived safety of Treasuries sending yields lower. 

Note Added Friday Morning, 5/31/24, at 3:34 AM EST: Yesterday, the 10-year comes back down to 4.55%. Stocks sell off and notes and bonds are bot sending yields lower.

Note Added Monday Morning, 6/3/24, at 2:26 AM EST: The 10-year is down to 4.48%. The 20-wk MA is 4.33% and 50-wk MA is 4.28%. The bottom rail of the triangle is 4.25%-ish and this keeps creeping higher as yield plays within the apex of the sideways triangle still deciding which way to break. Call the lower rail 4.30%; if support is lost here, yields will collapse far lower. However, at 4.48%, that is another 18 basis points.

Note Added Monday Afternoon, 6/3/24, at 2:22 PM EST: The 10-year is down to 4.39%. Now things are getting interesting with support at 4.25%-4.35%. The United States interest payments now exceed all other government expenditures except social security. The interest payments on debt are greater than the national defense and Medicare budgets. America's crony capitalism system is in its last throes. Human greed destroys everything. Both corrupt political parties want Americans to band together to protect a crony capitalism system that only served to make the wealthy class rich at the expense of everyone else. That is laughable. Millions of Americans no longer give a sh*t. The rich took all the money to live lives of leisure and luxury but they will come to realize their greed was too excessive as society crumbles.

Note Added Wednesday Morning, 6/5/24, at 8:01 AM EST: The 10-year is down to 4.31% yesterday ending the session at 4.33%. The 200-day MA is 4.35%. The 20-wk MA is 4.34%. The 50-wk MA is 4.29%. The bottom rail of the triangle is 4.30%-ish. Mix it all together and it is easy to understand that yield is at critical support and is deciding to bounce, or die. The 10-year is currently trading at 4.32% and will probably wait for the Jobs Report Friday morning before making the bounce or die decision that determines the direction forward.

Note Added Wednesday Afternoon, 6/5/24, at 5:00 PM EST: The 10-year is down to 4.28%. She is testing the critical support and likely waiting for the Jobs Report when either a trap door opens on the chart above sending yields far lower (die; collapse through support), or, a springboard occurs sending yields into the stratosphere (bounce from support). Where's the 99% of Wall Street analysts that said a near-term move of the 10-year yield up to 5% and higher was a no-brainer and would easily occur. They are quiet the last few days, hiding under their mahogany desks, praying for the bounce in yields so they do not look like jackasses.

Note Added Sunday, 6/9/24: The Jobs Report hits on Friday morning serving to muddy the waters further with nearly 300K jobs but the unemployment rate rises above 4%. The 10-year yield pops 15 basis points (notes and bonds selling off sending yields higher) to 4.44% which is the exact 20-day MA overhead resistance. Yield will either bounce or die from 4.44%. The 50-day MA is at 4.49%. The 10-year yield is the catty girl at the dance first teasing a breakout upwards, then teasing a breakdown, but now in the safety of the apex of the triangle still deciding which way to go. Traders will want to see the inflation data and Fed speak this week as well as note how the AI hype is proceeding.

Note Added Thursday, 6/13/24, at 6:40 PM EST: The 10-year yield drops to 4.25% on the verge of falling out of the sideways channel ushering in far lower yields ahead on the weekly basis. It is time to gird your loins. Yield must bounce, or die. As per the above, if 4.25% fails, yield will likely seek the 3.00%-3.25% landing zone in the weeks ahead. A drop in yields makes sense, on the weekly basis, since stocks are set-up for a multi-week pullback. Traders will sell stocks and buy bonds sending yields lower. The excitement builds. Will the bottom rail of the triangle at 4.25% fail?

NVDA NVIDIA Weekly Chart; Overbot; Rising Wedge; Negative Divergence Developing; Upper Band Violation; Rampant AI Euphoria

NVIDIA CEO Jensen is a rockstar throwing out the first pitch at a baseball game, appearing on news and variety shows and a keynote speaker at conferences. Why? What silliness. When your toilet is overflowing with sh*t running onto your new Walmart throw rugs, are you expecting Artificial Intelligence to fix that? Of course not. You are expecting Art Ificial, the local plumber, to do the job.

America goes from one hyped-up story to the next. Hey, where are the autonomous vehicles that were supposed to drive us everywhere including on the snowy and icy roads at midnight?  The list is long but now AI is going to revolutionize the world. Maybe it will, and maybe not so much. AI will be another production tool but the law of diminishing returns is occurring.

Keystone remembers the rows and rows of draftsmen in engineering offices in the 1980's. Engineering drawings needed updated constantly so draftsmen, laying down lead, made a good living participating in the so-called American dream. Enter technology and AutoCAD systems. Within a few short years, during the 1990's, an entire skyscraper's floor that had wall to wall draftsmen was replaced with a dozen CAD operators. In the 2000's, technology then pushed forward forcing the engineers to do direct editing on drawings phasing out some of the work done by CAD operators. However, an end point approaches where one person can only do so much work no matter how many production tools are available.

Thus, in the 1980's, an engineering project may have required 200 men including draftsmen, engineers and management. In the late 80's this was down to 150. Then AutoCAD in the 1990's drops the head count required to about 40 or 50. Then in the 2000's, further production efficiencies drop the manpower requirements down to a dozen folks working their arses off telling their children that they will not be at the soccer game today but they will be at the next one. .Harry wrote a song about that.

Over a 30-year period and more, from the 80's to present day, the manpower requirements for an engineering project drops from 200 people to a dozen. Considering the power requirements AI will demand, is it really worth it to try and whittle down to 10 or 11 people instead of a dozen doing the work?

The big production achievements were in the 1980's and 1990's due to technology arriving on the scene as well as President Ronnie Ray-gun busting the unions and starting the destruction of America's middle class (sending jobs overseas to take advantage of slave labor that rewarded Reagan and his wealthy cronies with stock market riches; one-half of Americans do not own a single share of stock and they are the ones that lost their jobs). 

Anyhoo, as explained in the previous NVDA chart, there was no reason to play NVDA before the earnings. The chart was setting up with neggie d but you had to wait for the earnings report. If the earnings would have disappointed, NVDA likely would have retraced to 700 already. Instead, Jensen the rockstar proclaims vast riches for everyone involved in AI from this point forward. The AI fever launches NVDA  after the earnings into the stratosphere.

As previously mentioned, if the earnings did create a pop higher, the chart would simply set up again with neggie d where a top can be called, so let's take a look. Look at that launch. NVIDIA must have taken some Viagra. Price makes the new high but the red lines show negative divergence remaining in play. The MACD line wants to break-out higher which will cause price to jog (down-up) before she tops. The weekly chart is likely a couple weeks away from topping out. Simply watch for the universal neggie d to reestablish itself and call the top yourself.

This week's candlestick remains in progress and the new candle that begins next week will provide much more insight as to when she tops. Price is favoring the red rising wedge a bearish pattern. Price has violated the upper standard deviation band so the middle band at 842, and rising, the same as the 20 MA, is on the table.

The Aroon is a hoot. It proves unequivocally that every single NVDA bull is 100% guaranteeing that NVDA price will go up forever while comically, the bears (at 0%) are also 100% convinced that NVDA stock will go up without interruption. Pause for laughter. The US Titantic ship has every single NVIDIA bull, and every single bear, all partying together on one side of the boat, 100% convinced that NVDA will go up forever. That is funny stuff.

The ADX pink box shows that the rally was confirmed as a strong trend higher in March 2023 and this strong trend remains. The strong trend will be lost when the ADX goes below 30. Interestingly, within the strong trend higher, it has been weakening since the 2023 top. The price highs are occurring with a slightly lower ADX each time. If a bull, this is not what you want to see. The rally higher remains in a strong trend but within the strong trend it is weakening for the last 10 months.

The blue circles show volume behavior. Price is joyously at record highs but volume is nowhere near the prior levels. Distribution was occurring in April with the smart money cashing-out and taking profits and most of them likely reentered the stock. Price will need to come down to within that blue channel to test the prior volume levels. If NVDA is to move higher, it needs a lot more volume. Most of the folks buying are likely Joe Sixpack, Jane Winedrinker, Sam Sucka and Bobby Bagholder.

So the weekly chart is still setting up with neggie d so give it a couple weeks before the top call is likely in the weekly timeframe. On the monthly chart, the indicators are all neggie d except for the MACD line. Therefore, the monthly neggie d will conspire with the developing universal neggie on the weekly chart to create the multi-week downside that will begin.

However, the MACD line on the monthly chart must be respected and it may require a jog move that will bring it back up to matching and new price highs on the monthly basis going forward lining up the bigtime long-term top for NVDA in the July-August time frame. No need to guess at anything. The charts will set up and tell you the answers.

In a nutshell, the weekly chart will likely set up with neggie d so a top can be called in a couple weeks or so. This will begin a multi-week decline in NVDA stock. June should be a soggy month with Jensen spending time hiding under his desk. Then, price will likely recover due to the MACD line on the monthly coming back up to the current price highs, say, out in July or August. At that time, the monthly chart may be set up with universal neggie d and a long-term top for NVDA could be called. Simply watch the charts develop.

Keystone continues to not hold a position in NVDA long or short but will likely play it short as it sets up on the weekly chart with neggie d. Once this occurs, the daily and 2-hour charts can be used to time the entry on the short side and take advantage of the coming multi-week pullback. 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 Sunday, 6/9/24; NVIDIA earnings create an upside orgy that is why it was prudent to sit back and wait; that release was a coin-flip. The NVDA weekly chart is in negative divergence except the MACD line so she is not topped-out yet on the weekly basis. It should only take 2 weeks, a down-up jog move, for the MACD to go neggie d and then the top can be called. Keep an eye on it and you can call the top in NVDA.

AMZN Amazon Weekly and Monthly Charts; C&H; 2-Leg Bull Flag; Rising Wedge; Negative Divergence; Overbot; Amazon Begins a Multi-Week Decline

We need Willie to lead us in a touching rendition of The Party's Overnull as we discuss the two Scamazon charts above. Which turd do you want to discuss first? Let's do the weekly since a multi-week decline has started. AMZN is soggy for the last couple weeks sending RTH lower telling you dolts that the consumer, even the filthy corrupt elite and upper middle class sycophants, the have's that have all the money, are pulling back on their spending.

Keystone draws a cup and handle (C&H) with a purple crayon. He likes purple crayons because they taste the best. The base of the cup is 86-90 and the brim of the cup is 140. That is a difference of 50-54 points so adding that to the brim is an upside target of 190-194 once the breakout occurs last November. Honey, we're home. The C&H is satisfied; close enough for government work.

There is also a 2-leg bull flag in play not shown on the weekly chart since it would turn everything into a bowl of spaghetti. First leg 86 to 140 which is 54 points, then the consolidation phase with a slight downward bias, check, then second leg begins at 125-ish so adding 54 is 179 and that upside target was also achieved by the bulls so the 2-leg bull flag pattern is also satisfied.

The red rising wedge, however, is a bearish pattern proclaiming no more Mr Nice Guy as Alice jams. The AMZN weekly chart also prints a M-top, or double-top, if you prefer. As price squeezed out the higher high, the red lines clearly show universal negative divergence across all chart indicators. It a simple top call forecasting a multi-week slide lower.

Price will likely want to play around at the 20 MA at 177 an excuse for dip-buyers to step in, but they will get squashed like a bug as price descends further targeting the 50 MA at 154 and rising. Note the flat 200 MA at 144 as price support also the C&H brim line at 140 that was never truly back kissed so price needs to come back down and kiss the lady that allowed the rally. The 140-160 area is a good target zone for price over the next few weeks as the neggie d spankdown occurs.

The Aroon green line shows bulls up at 88% everyone bullish Amazon remains bullish proclaiming more new price highs ahead. The Scamazon bears are at 0% comically every AMZN bear has given up and no one believes that Amazon stock will go down in the weekly time frame. You know what happens when everyone is on one side of the boat. Look at that, the boat is starting to wobble.

The ADX is dropping faster than a prom dress on the verge of signaling that the 16-month rally is ending. For Amazon, anything above 30-35 is a strong trend you can see that the party continued for the last year but is now on the verge of falling out of the pink box which means the rally higher is no longer a strong trend higher. In addition, note that despite price making a higher high, the ADX did not. In other words, as price makes a new high telling the world the sky is the limit, the ADX is whispering that the strong trend higher is weakening and about to be completely lost.

The Amazon weekly chart is a piece of crap. Look at that turd. Everything about it is negative. AMZN will trail lower during June on the weekly basis targeting 140-160.

On the AMZN monthly chart, another turd that needs flushed, price comes up for the higher high but the chart indicators are in negative divergence. The strong multi-year trend higher for Amazon ended in 2022 as per the ADX and the stock has not been in a strong trend ever since. Note how for the higher tops in price, the ADX moves lower indicating that the price tops are occurring as the overall trend is weakening on the long-term monthly basis.

The red lines show neggie d for all the chart indicators although the MACD line is trying to create another high a couple months out. The RSI is also level over the last couple months trying to create some buoyancy to keep the turd floating for another couple months. Alas, with the weekly chart now in a weekly downtrend, do not hold your breath.

You can see that AMZN is clearly in serious trouble on both the weekly and monthly basis. If you made boatloads of money over the last many years, git outta Dodge. The Aroon on the monthly chart is like the weekly chart. The green line shows that 100% of the bulls are guaranteeing that AMZN stock will go up and up. The Aroon is a contrary indicator telling you everybody and his bro, including the shoeshine boy, uber driver and doorman, are buying AMZN stock with both fists. In technical language, they are called the sucka's and bag holders. Pause for laughter.

AMZN price will want to revisit the 20 and 50 MA's on the monthly chart at 132-143 going forward which roughly jives with the weekly chart; expand the downside target range to 130-160 over the coming weeks.

Maybe for fun, count the Amazon vans going by your house each hour. See if the vans become more sparce as time goes forward. Humorously, Amazon vans will not be needed as much for packages so maybe the vans will become shuttles riding seniors from the nursing home to the mall?

Keystone does not have a position long or short in AMZN currently. Obviously, you only want to play the short side for the coming weeks and if you have some nice profits, take them. 

Let's take a quick look at the daily chart. Double-top. Neggie d creates the multi-day slide. Stochastics oversold so the daily chart is a sideways stumble. We are looking for the ST timing on when to enter short. Bring up a 2-hour chart. That is showing possie d over the last week so best to hold off for a day or few. It will be easy, however, to enter short. Watch the 2-hour chart. It will come back up over the coming days, maybe for a week, and when it tops out with neggie d, that is the entry point for the short trade. It should be in the days ahead. The 2-hour will tell you when so no need to guess.

Considering the morbid charts above, and the Memorial Day services yesterday, it is appropriate to play Taps for Amazon stock going forward on the weekly and long-term basis. 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.

XLP:XLY Consumer Staples/Discretionary and SPX (S&P 500) Weekly Charts

When the XLP:XLY chart moves higher, it represents a consumer that is worried and buying staples such as toilet paper, soap, toothpaste, hygiene products, canned goods, as well as stocking-up on alcohol and cigarettes. For many humans coping with daily life, booze and ciggy's are a staple.

When the XLP:XLY chart moves lower, that indicates heavier buying in discretionary items such as the midlife crisis Corvette, lavish household appliances with all the bells and whistles, specialty items, expensive handbags, Skidoo's, jet skis, as well as taking long extravagant vacations in exotic locations. Life is one big party and stocks rally to the moon. It does not matter that the worthless crap that you buy will end up on the curb next year.

In early 2020 at the start of the pandemic, the stock market begins dropping in sync with the XLP:XLY ratio moving above the 31 MA. That was short-lived since America's scum crony capitalism system started dropping money from the sky created by the Federal Reserve (monetary stimulus) and Congress (fiscal stimulus). It was party time again. Life is one big party under crony capitalism, that is, until it abruptly is not.

At the end of 2021 going into 2022, the ratio again pops above the signal line indicating that consumers are worried. Time to buy more toilet paper and canned goods. The stock market sags in 2022 due to the negative vibe in society. People choose to spend their money wisely, not foolishly, and are stocking-up on items they need, ditching the visits to restaurants and instead eating and making coffee at home.

The stock market bottoms in October 2022 as speculators look for bargains and buy the dip especially with charts setting up with positive divergence. The ratio collapses in April-June of last year ushering in more frivolous spending on junk you do not need. The wealth effect occurs during these positive periods. Stocks are going up and up so people puff their chests out feeling rich so they buy more discretionary stuff.

Each turn on the charts occurs within 1 to 3 months of one another. Stocks will tend to bottom and recover for a month or two before the ratio follows by dropping sharply but the tops typically occur in closer unison with the ratio jumping higher.

Okay, that said, the ratio jumps higher. The XLP:XLY moves above the 31 MA signal line a couple months ago, and even completes a back kiss, and continues higher. How can that be with the stock market at a new all-time high? The prior high in stocks in March/April is timed with the ratio jumping higher above the signal line so the expectation would be for stocks to continue lower and not make new highs.

Since the SPX is not listening, instead choosing to believe the have's that all is rosy, the expectation is for stocks to top out right now, now, and begin dropping. Otherwise, to sustain higher stock prices, the consumer should go out and start spending money like mad on frivolous discretionary items. This is not the likely outcome in fact it is the opposite. People will tighten belts further.

America is watching a class battle between rich and poor the have's and have not's. The Fed printed money for over a decade rewarding the wealthy elite and their upper middle class sycophants with vast riches (high stock prices). One half of Americans do not own a single share of stock. The have's are the ones spending the money and keeping the economy afloat creating the confusion in the data.

The have not's are rubbing two nickels together hoping they have enough money to get through the month. Oh, we don't honey? Well, keep putting the food and the electric and gas bills on the credit card. Welcome to crony capitalism in America, another system that will be tossed on top of the dustbin of world history. Greed is the most powerful human force that destroys everything.

Retail data shows that May spending accelerates but what are the consumers buying? The have's and have not's are both buying toilet paper, hygiene products, canned goods, alcohol and tobacco but only the have's are buying discretionary items. People are buying 'styrofoam boxes for the ozone layer' as Neil, the Godfather of Grunge, sings. Time to rock-out. Hand me that guitar, Sonny. Rockin'null in the Free World. 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.

INDU Dow Jones Industrials Average Monthly Chart; DOW PRINTS 40,000 FOR THE FIRST TIME IN HISTORY; Overbot; Negative Divergence; Upper Band Violation

The Dow Jones Industrials Average (INDU; DJI), the Dirty 30, close above 40,000 for the first time in history. The new all-time high is 40051.05 and all-time closing high is 40003.59 both printing on 5/17/24. 

The privileged elite and upper middle class sycophants that service the wealthy, dance with glee at the never-ending riches they accumulate especially during the last 15 years of Federal Reserve money-printing. YAHOO! They Celebrate with Kool and The Gang cheering America's crony capitalism system as the rest of the country looks on cooking their meals, cleaning their sheets and scrubbing their dirty toilets.

There has not been this wide a separation between rich and poor in America since the 1970's and many of you were not even alive then. That's your loss since the music was great in the 1960's and 1970's. You missed out. San Francisco. Summertime was a love-in there. Those were the days. Now the US is the land of the have's and have-not's again and Dow 40K is for the have's. Did you know that one-half of Americans do not own a single share of stock? No, you didn't.

Enjoy the Dow 40K newspaper and internet headline this week since it should not last long. The chart is a turd floating in the bowl. The only people that should be happy about the sick chart above are the screen printers providing the Dow 40K hats.

The rising red channel is in play for the last decade with price now bumping its head up against the top rail which places the bottom rail at 32K-33K in play going forward on the monthly basis. Price prints a matching or higher high for March, April and now May, so the indicators can be assessed for potential negative divergence. The red lines indicate neggie d across all indicators an extremely bearish indication going forward and remember this is a 'long-term' monthly chart.

The RSI is neggie d across the last 6 years and now over the last 3 months. Ditto the stochastics that are also overbot agreeable to a pullback. Ditto the histogram. The MACD line is neggie d over the last couple years, as price ventures higher for new all-time highs, showing that the fuel tank for more upside is empty. Ditto the money flow but both show a spurt of life with slightly higher highs over the last couple months. Those short green lines represent the ongoing momentum and upside market hype.

Price has violated the upper standard deviation band at 40K+ so a move back to the middle band, that is also the 20-mth MA, at 35358, and the lower band at 30509, are on the table going forward on the monthly basis.

The ADX is down at 16 showing that the big upside rally this year is NOT a strong trend higher. That is not what you hear in business media with one analyst or trader after another proclaiming nothing but blue skies, rainbows, hugs, flowers and kisses ahead. Instead, it is called pump and dump. The analysts and traders are telling Joe Sucka, Jane Winedrinker and Frankie Sixpack that the sky is the limit because they are unloading their shares onto these willing bagholders. You can get people to do anything if you play to their human greed. The blue circles show distribution months three of them over the last year. This is the bigtime smart money dumping shares off to Joe Sucka and Jane Bagholder.

The pink box shows that the last time the Dow Jones Industrials had a strong trend was the rally higher during 2017-2018 that then petered-out in early 2019. As price makes higher highs for the last few years, the ADX moves lower the exact opposite of what you want to see if you are long the market. In other words, as stocks rally to more all-time highs, the ADX tells you that it is not only NOT a strong trend higher for stocks but the trend higher is weakening.

The Aroon green line shows that 100% of the bulls remain 100% bullish the stock market believing stocks will go up forever. In addition, the Aroon red line down at 24 shows that the bears have given up and they too believe that stocks will go up forever. These are contrarian signals against the stock market. The Aroon tells you that everybody and his bro are long stocks and believing that prices will grow to the sky forever. You know what happens when everyone is on one side of the boat partying like its 1999? They will end up hungover. During the holidays near the end of this year, with stocks still in retreat, people looking at their sagging stock statements will be baking cookies that are placed in tins for frugal Christmas presents.

The chart is a piece of crap. The Dow 40K all-time high is good news only for people that own stock and are long the market. One-half of the country is left behind with their noses pressed against the front window of the fancy restaurant watching the have's snacking on caviar and sipping fine wine. The wealthy and upper middle class send thank-you notes to the Fed for maintaining easy money policies that have made them all filthy rich (and supporting the current bifurcated economy). The middle class, that is now defunct with these folks falling into the lower middle class, poor, elderly, handicapped, single Mom's, and homeless, the have-not's, suffer mightily under the weight of crony capitalism.

All of you long-time followers of Keystone remember how he calls the May 2015 stock market top the last legitimate stock market top. The case could still be made that fundamentals and technicals mattered back then but as the Federal Reserve went full-blown nutso printing money like crazy, the stock market launches higher rocketing to the moon. This is not capitalism, folks. It is filthy crony capitalism, trash, be glad that it is in its last throes.

The expectation is that after a couple years of falling stocks and sogginess, the Dow Jones will return to Earth which is a landing target in the 16K to 22K zone. Enjoy the Dow 40K but like beauty, nothing lasts forever. Benny. 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.

HAPPY ARMED FORCES DAY TO ALL YOU VETS. Cher knew how to keep the boys happy when overseas letting them know what they are fighting for. If I Could Turn Back Time.

The Keystone Speculator's Housing Market Indicator; US HOUSING RECESSION STARTED 12/20/22 NOW 17 MONTHS ALONG AND COUNTING

The United States housing recession started in December 2022 and is now 17 months along. Whazzat? Huh? Who says so? Times are truly different this time. With an ongoing housing recession, manufacturing recession, and labor recession that started in September, and the inverted yield curve ongoing for 1-1/2 years, an overall economic recession for the US is guaranteed. Not anymore. It's different this time, Kids. Glastonbury, what fun.

Price discovery and financial markets have been destroyed by the Federal Reserve and other global central bankers over the last 15 years. The four horseman of the world's financial apocalypse are the BOJ (Japan), ECB (Europe), PBOC (China), and the Fed that is riding in on its pale green horse. Today, the PBOC pledges billions to help save China's overheated property market. It is hilarious that Western and communist nations alike resort to bailing-out their sick corruption and cronyism.

The long 7-year housing recovery from 2012 into 2019 was fueled by boatloads of Federal Reserve easy money focused on making America's wealthy filthy rich. Don't you love the crony capitalism system? Fear not since it is on its last legs. It is interesting that the US housing sector rolled-over in 2019 forecasting troubled times ahead.

The COVID-19 pandemic hits in late 2019 and early 2020 an epic tragedy killing over 1.1 million Americans (1 in every 300 people) during its 3 years of misery. Interestingly, due to America's dirtbag crony capitalism system, zero financial pain is felt by citizens. Instead, the Federal Reserve prints money like madmen and Congress along with both corrupt President's Trump and Biden, working with compromised Dr Fauci, release mountains of fiscal stimulus encouraging people to stay home and not work. Sickening. This is not capitalism, folks, it is the opposite of capitalism; call it crapitalism.

Thus, a 3-year housing boom begins in 2020 fueled by obscene easy money but even all that free dough could not stop the housing recession that started 12/20/22. Not only are the parameters of a recession different (semiconductors and the new AI hype are the kingpin of the economy now with housing, manufacturing (autos) and labor taking a back seat), but the internal working of parameters have adjusted. Let's take a deeper dive into the housing mess.

This brings us back to the first paragraph where many folks will say, "what housing recession?" They say they want a puff of what Keystone is smokin' because he must be seeing things. The US stock market is making new all-time highs on a daily basis so all is fine, no? Housing stocks have been stellar performers. However, housing inventories remain low since any home coming on the market is snatched up faster than the last slice of pizza.

Hedge funds have been buying up available existing homes for several years looking forward to charging high rents to generate high rates of return. This behavior takes away homes available to the first-time homebuyer. Instead, young family Carlos and Carmelita, with a baby on the way, are forced to rent for many more years as the wealthy cheer the crony capitalism system fleecing the young couple for every cent. Carmelita, hold me tighter, I think I'm sinking down.

The US southern border is in crisis under President Biden that maintains an open border policy because the democrats believe the migrants will all vote in their camp in the future. Isn't the crony capitalism system enough to make you vomit? It is guaranteed that drug cartels are buying up a lot of existing homes for nefarious reasons.

And do not forget communist China. The filthy CCP (Chinese folks are cool like everyone else on Earth; they just want to be left alone by government and allowed to make an honest living; however, the 90 million pieces of human filth, the CCP, the Chinese Communist Party, that worship murder, led by scumbag Dictator Xi, control the 1.4 billion Chinese folks that have no choice but to obey the CCP; if they do not they are imprisoned or shot in the head; how do all you young twits like communism now?) are buying up existing real estate especially houses and land available next to US military and intelligence facilities.

It is easy to understand why the US and world economies are upside-down and inside-out. Welcome to the American crony dream where you cannot buy a house anymore if you are a young couple because the corrupt government and institutions want to make more money.

Human greed destroys everything folks. It is the most powerful force in humanity stronger than love, hate or fear. If there was a tightrope to cross where your love was on the other side, but if you fall you would die, what would you do? You would wave to your honey and say, "forget it, sweetheart." Same if you have a dislike for someone. You would never risk you life for the sake of getting back at someone. And the same with fear. The fear of falling to your death prevents you from attempting to cross the tightrope. But Keystone places a million dollars in bags of money on the other side. Many people would try to cross the tightrope. Most would fall to their deaths but some would succeed and then live lives of leisure and comfort. There is no more powerful human force than greed.

America's crony capitalism system failed for two reasons; Human greed (corruption) and non-transparency. It does not get any simpler than that. Humans have not changed in 5,000 years that is why no government or country lasts forever. They all fail regardless of whether the system is communism, fascism, Naziism, socialism, Marxism, dictatorships, or crony capitalism.

The shame about the United States is that as the end game occurs for crony capitalism over the next few years, a real capitalism system could never be implemented again. Americans will never trust or believe in capitalism again, at least for many decades forward. People will mistaken claim that capitalism failed but in reality it is/was a crony capitalism system that failed and not capitalism. People will have a misplaced hatred for the capitalism system when it was never in play. America is/was a dirtbag crony capitalism system. Oh well, greedy humans always ruin everything for eternity.

Capitalism does not exist. If you accept this fact, you will better understand the modern-day mess in the United States. America's financial system is best described as a faux free market crony capitalism system now in its final throes. Everything is corrupt from top to bottom throughout government. Federal Reserve bankers and staff promote dovish money-printing policies to enrich the wealthy class under the guise of protecting the financial system. The Fed members are then rewarded by the Wall Street investment banks once they leave public office with lucrative speaking gigs at token luncheons. Isn't crony capitalism enough to make you puke?

The last few years have shed light on the rampant corruption at the FBI, CIA and other institutions that secretly monitor Americans. It is both the management and rank and file that are corrupt; they are rotten to the core. During the pandemic, our eyes were opened to the crony corruption at the NIH, FDA, CDC, AMA, WHO and Teachers Unions. The WHO lies in bed with the communists (red China) as was proven in late 2019 and early 2020. You cannot trust anything these compromised organizations tell you anymore.

Americans are at fault, too. They cheer and pledge allegiance to one or the other corrupt political tribes placing that crony agenda above what is good for America as a whole. Are you an a-hole worshipping the rupublocrat and demopublican scum? It's over folks. It is Our Destiny. Crony capitalism is a cancer without a cure.

The Housing Starts in June must tag 1.8 million for the housing recession to be stopped. That is a tall order and would be a record number. The 1.80 million units was teased back in 2022 but it is unlikely that next month would report such a dramatic increase from yesterday's 1.36 million units number. Thus, the odd housing recession will likely continue and it is expected to lead into an overall economic recession in the United States. Do you understand what is going on or do you choose to be an American Idiot?  In studio. 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 Keystone Speculator's Inflation-Deflation Indicator; NEUTRAL

by K E Stone (Keystone)

The Bidenflation caused by Bidenomics remains a hot-button issue. Sleepy Joe's war on America's oil and gas industry, along with obscene monetary (Fed) stimulus and fiscal (Congress) stimulus, create the elevated inflation over the last four years. In addition, America's privileged elite, and their upper middle class sycophants, made filthy rich from the 14 years of money-printing, create a huge demand for services after the COVID-19 pandemic driving inflation strongly higher. The battle between services inflation and goods inflation (represented in the chart) continues.

America is the land of the have's and have not's. If you are in the elite or upper middle class that own the vast majority of stocks and made out like a bandit from the Fed's money-printing, you are traveling, taking vacations, getting your hair done, eating out at restaurants, and attending fun events. Keep in mind that one-half of Americans do not own a single share of stock. They be the have not's.

The Fed has been printing money since the 2008-2009 financial crisis sending stocks to the moon rewarding the bastard wealthy, that created the mess in the first place, with riches beyond their wildest dreams. Isn't that enough to make you puke? These have's need the rest of America to wash their sheets, clean their toilets, cook their vacation meals, style their hair, tailor their clothes, drive them around, carry their bags, and wait on them hand and foot. Such is crony America now unfixable within the current structure and regime; it is rotted to the core.

Americans are too corrupt and greedy nowadays to do what is right for the nation. Instead, they pledge allegiance to their corrupt and crony political tribes placing that narrative and agenda ahead of what is best for the country. You are watching the collapse of the crony capitalism system. It does not matter who wins the presidency in November; both of the top two candidates are corrupt to the core. Understand that if you vote for either Trump or Biden, you are voting to place a criminal in charge of the United States and Free World. As long as you understand what you are doing, that's cool.

The prior peaks in inflation are May and June of 2022. You are probably not that vocal about inflation and higher prices than you were during the summer of 2022. However, inflation remains in the daily zeitgeist as food and gasoline prices, the main staples, remain stubbornly elevated.

Inflationists and deflationists battle each day spewing talking points and cherry-picking data to try and bolster their narratives. You can clearly see in the chart above why analysts are having a hard time at assessing inflation. There are many fits and starts and reversals in direction over the last couple years. Look at how smooth the chart indicator line is in prior years but after the jump into inflation, and now back into a sideways pattern of neutrality, over the last few years, the line is erratic, up, down, with wild moves. A lot of the wild gyrations are pivots from Fed decisions or guidance, or inflation data, as the crony capitalism system sputters along. Up, down, down, up, baby what you want me to do, as Jimmy sings.

The Keystone Speculator's Inflation-Deflation Indicator sits at 2.92 at NEUTRAL TERRITORY. The United States has not seen disinflation since 2021.

President Biden and Congress pass massive COVID-19 spending bills in 2021 throwing money out to Americans like a fireman tossing candy to children during a parade. Trump was also greasing the skids in 2020.

At the same time, in 2020 and 2021, the Federal Reserve turned up the money-printing dial from from heinous to disgraceful. The money-printing was so obscene it would make Caligula blush. The Fed turns the money-printing dial to 11 a la Spinal Tap. Chairman Powell and Treasury Secretary Yellen toss money to Americans from a helicopter piloted by former Fed Chairman Bernanke.

Worse, creating the trifecta of the inflationary backdrop, is Biden's stupid misguided climate change agenda hacking the vital oil, gas and coal industries to death while promoting windmills, solar cells and glorified golf carts (EV's) that do not work in natural disasters and cause more ecological waste (mining and battery disposal) than regular gas-powered cars. EV's are also heavier vehicles causing more human injuries in accidents.

Piling on, the wealthy elite and upper middle class that own stocks and were given vast effortless wealth courtesy of the Fed's money printing are enjoying their easy money demanding services further fueling inflation.

The factors above are the inflation fuel and the pent-up demand for goods and services after the lows of the pandemic lights the fuse. Higher oil, gasoline and fuel drives up the costs of all goods and services.

The chart above generally reflects goods inflation rather than services inflation. For decades this did not matter since both moved in unison. In recent years, however, due to obscene central banker money printing that has destroyed price discovery, and the disruptions of supply lines due to the pandemic, the goods and services inflations have not been in sync.

The thinking was that services inflation would roll over and come down to join the lower goods inflation, however, what may occur is goods inflation floating higher to join services inflation. Last year, the indicator had the look that it wanted to venture up into inflation again but that move reversed. Commodity prices have been strong and they are in the numerator of the indicator sending the number higher.

The oil, coal and natural gas industries are the energy backbone of the United States. It takes a high degree of stupidity, and corruption, to purposely crash these industries, adding to the already out of control inflation due to the Congressional spending spree (fiscal stimulus) and the Fed's money-printing (monetary stimulus). The so-called green energies are not ready for primetime so Biden sells America down the rabbit hole of despair. At the same time, Russia's dirtbag dictator Putin continues the Ukraine War further exacerbating worldwide inflation.

The 10-year Treasury note 'price' is used for the denominator (bottom number) of The Keystone Speculator Inflation-Deflation Indicator. The 10-year Treasury price is 99.03 with a yield at 4.50%.

Commodities are in the numerator (top number). The CRB Commodity Index is at 289.47.

The Keystone Speculator Inflation-Deflation Indicator

CRB/10-Year Price = 289.47/99.03 = 2.92

Above 4.20 = Hyperinflation

Between 3.1 and 4.2 = Inflation

Between 2.5 and 3.1 = Neutral; Inflationists and Deflationists Battle

Between 2.1 and 2.5 = Disinflation

Below 2.1 = Deflation

Granted, the calculation above is focused on goods inflation rather than services inflation. For many decades, you could track commodities, with the CRB, or GTX, and the goods inflation and deflation dictated the overall economy's direction. As the US politicians screwed America over the last five decades, sending jobs overseas and destroying the middle class so stock prices could move higher on the foreign slave labor, the goods production went to foreign nations while the US focused more on services as the major part of the economy.

The debate between inflationists and deflationists over the last few years has been the discussion of goods versus services inflation. The pundits looking for inflation said goods would inflate and catch-up to the rising services sector while the talking heads preaching deflation said the services inflation would drop to join the goods disinflation and deflation as the economy slumps. All bets were off and both sides ended up being correct as the COVID-19 pandemic hit knocking the world on its arse.

The deflationists were correct in 2019 and 2020. Services inflation drops to become more compatible with the goods deflation. Of course, the China Virus pandemic wiped out the airlines, hotels, travel, restaurants and hospitality and leisure industries. Services are knee-capped falling to the ground joining the goods deflation. Men turned into bush people letting their hair grow wildly outward as they avoided the barber for fear of catching covid.

Then the central banker cavalry arrives March 2020 promising to print money forever. Greenspan, Bernanke and Yellen (former Fed chairs) were already in the basement of the Eccles Building running the printing presses like mad. Helicopter Ben loaded-up his chopper with freshly printed Benjamin's dropping the money from the sky into the investment banker's hands on Wall Street.

President Biden provides way too much stimulus creating a lazy workforce that would rather sit home than work. The staffing shortages are a headache for employers that want to get back to normal but cannot since there are not enough workers to fill positions. Wages rise sending inflation higher. These behaviors, and the obscene amounts of Congressional (fiscal) and Federal Reserve (monetary) stimulus, send inflation to the moon.

When the Fed and Congress tag-teamed in March and April 2020 with trillions in stimulus, billions went into the US stock market pumping it to record highs. A few hundred thousand workers left the workforce either retiring or caring for loved ones after the pandemic, creating a massive labor shortage as the pent-up demand hit in 2021 and 2022.

Rising wages create inflation. The lack of inflation and ongoing persistent deflation for many years was due to the stagnant wage growth. Inflation cannot exist without wage inflation which had not occurred for many years until 2021 and 2022. 

Interestingly, as economic activity slows in the US, and some companies begin layoffs  in 2022, the wages are starting to stagnate again, helping create the current top in inflation since June 2022. This behavior continues into 2024 with wages steady and layoffs in the news. Wages are moderating which will keep inflation at bay.

The inflation in recent years is mainly due to energy, food and rent/utility costs. People notice higher gasoline and food prices more than other price changes. 

Oil will have a big impact on the path forward. Everybody and his bro called for oil above $100 per barrel a couple years ago but that typically means it will not get there and it did not.  Inflation will eventually run far higher in the years forward and bring on hyperinflation but is now the time? It does not appear so especially since the recent inflation has never overtaken the 2011 inflation but that hyperinflation scenario will occur at some point forward.

Just think, perhaps in a few years, the chart above will be way up there in the hyperinflation zone. That is when the Dow will be over 50K, the SPX will be 10K or more, a gallon of gasoline will be $10 and more, a loaf of bread will be $10. The stock market will be hugely higher, however, the US dollar will be toilet paper. That will be a whole new set of challenges when the velocity of money (money on reserve at the banks that suddenly floods into circulation) kicks in.

Inflation in 2022 ran higher to try and match the 2011 highs. Back then, traders were convinced that rates would continue higher but instead the peak was in. Time will tell if the inflation peak in May/June 2022 will hold; so far it has 2 years later.

Watch the indicator closely over the next month to see which side of neutral it favors. It would not be surprising to see it roll over as oil and commodities retreat and the economy softens. It would be a big deal falling into disinflation again since that would then open the door to deflation. If we start on the path lower to disinflation and deflation, that would likely occur with the US stock market selling off in force a la 2008/2009 and 2022 (crash).

The answer to the inflation-deflation debate is both sides are right and both are wrong since the indicator sits at neutral. The path to disinflation is more likely if the economy sours. People would lose jobs and the stock market would drop. The people propping up the economy right now are the upper middle class and wealthy because the Fed's easy money made them rich beyond their wildest expectations driving stock prices to the moon (at the expense of the rest of society).

The chart has to make a decision on what direction to move out of the neutral territory. A move higher with more inflation and higher prices means the wealthy class keeps spending money, mainly on services, to keep the economy afloat, or, a move to disinflation occurs if the economy begins falling apart, stocks deteriorate and layoffs rise. 

NVDA NVIDIA Monthly Chart; Negative Divergence Developing; Overbot; Rising Wedge; Upper Band Violation; NVDA Is Placing a Multi-Month Top

NVIDIA is the Artificial Intelligence poster child and CEO Jensen is considered, especially if you ask him, the Second Coming. Jesus walked on water and Jensen wants to do a little bit of that walkin' too as Charlie Daniels sings. Humans are fun to watch. AI, schmy. It's more over-hyped stuff as overpaid programmers and techies try to develop new technology and software to keep their jobs. Keystone has one thousand books in his library that are pre-1910 the oldest are over 200 years old. None of this information is on the internet so how can AI be all-knowing? It's not.

AI is an instant aggregator of internet information mainly geared around language models and will help a bit with productivity but are we at the point where the cost of the improvements are not worth the money? It takes a lot of power and electricity to run those servers. The Law of Diminishing Returns.

NVDA is the stock darling on Wall Street these days. Analysts and television talking heads tell you that if you don't own NVIDIA, you don't know Jack. Joe Sucka, Jane Winedrinker and Frankie Sixpack want to know Jack so they are tripping over each other buying NVDA stock with both fists knowing that it will go up forever because Prophet Jensen said so. As always, never believe what human animals say; instead look at what they do in the charts.

The late 2022 top is worth a look. The red rising wedge pattern was bearish. The RSI was overbot and negatively diverged, ditto the stochastics and money flow, and the histogram is neggie d; all these indicators are bearish calling out a top. However, the MACD line was still long and strong as price made its matching or higher high. Thus, you knew NVDA is topping-out on the monthly basis and headed for sogginess for a few months but then would recover for a higher price high again.

The negative divergence spanks price lower to start 2022 and the bottom fell out in April 2022 extending the duration of the downside. Positive divergence was setting up in late 2022 but still had a ways to go; a legitimate bottom would have likely set up to begin 2023. Instead, the stock market in general begins rallying and the AI hype starts to take shape and NVDA never looks back. The AI orgy is on with Silicon Valley techies dancing on conference tables only wearing their fleece vests.

Note how the volume trails off in recent years. As price makes new highs, volume should be strong and robust but it is not which hints that conviction for more upside is not in play. If you bring up the weekly chart, you can see distribution taking place in recent months (smart money pushing shares off to the dumb money).

Currently, there are three matching price tops so the chart indicators can be assessed to see if negative divergence exists and a potential top call at hand. The RSI is clearly overbot and neggie d; bearish. In addition, the RSI is neggie d over the last 3 years. The histogram is neggie d; bearish. The stoch's are overbot and neggie d like the RSI; ditto the money flow. Folks, that is a bag of sh*t. However, the MACD line remains long and strong extended way up and past nose-bleed territory into the stratosphere. The MACD line wants to see another higher high in price after price receives a spankdown on the monthly basis.

The ADX shows that price has been in a strong trend higher for the last few years above 30, however, the current high at 59 with price making a way bigger high, is not higher than the prior high in late 2021; negative divergence. In other words, the strong trend higher in price for the current rally is not as strong as during the prior peak in price.

The Aroon green line is overbot and the red line is oversold which means the bulls are nearly entirely convinced that NVDA stock will keep going up forever. At the same time, bears are nearly completely convinced that NVDA stock will go up forever and there is no point to short it. This is a contrarian indicator that tells you the sentiment for the stock remains off the charts bullish. The bears have all left town.

There are two scenarios. The MACD (some call it the mac-dee) is at perhaps the highest level ever seen for a stock; it is special stuff. Therefore, it would not be surprising if the MACD simply reversed and started falling like a rock without warning. This would only occur this month if price started to collapse lower. This would be the purple arrow scenario where NVDA receives a multi-month spandkown beginning anytime.

Typically, the MACD line is not in the stratosphere, it may instead be at a more reasonable sub 100 number, and need to form neggie d to call the multi-month top. This is the maroon arrow scenario where NVDA will be soggy for a month but then recover for a matching or higher price high, say in late June or early July, with the MACD then going neggie d to join the other indicators, and that would be the multi-month top.

Either scenario, NVIDIA is topping-out on the monthly basis (long-term basis) anytime between now and July. Isn't it funny that all the sucka's buying NVDA believe that they will hold on to it forever and be fabulously wealthy? Or parents that buy NVDA stock for their kids believing that it is a long-term winner.

When she begins rolling over, price will seek the middle band since the upper band has been violated for the last year. The middle band is at 454 and the lower band is down at 32. No, don't worry about 32 but the 120 to 300 landing zone is a real likelihood a few years out. Do not be surprised if NVDA drops to 350-500 over the next year.

The only thing that can stop the topping process would be more AI hype. It is hard to imagine there would be more hype available in the rabbit's hat but you never know. A good news spurt in price would only serve to reset the entire discussion above again only right-translated a couple months.

Looking at the weekly chart, price is at 899 not quite up to the prior weekly high. You cannot have negative divergence until price makes a matching or higher high (price is moving up while the chart indicators are negatively diverging (sloping down)). The chart indicators are weaker than the green tea that Nurse Goodbody is serving. Benny Hill. The 950-ish level is the prior high area so that would be a go signal to short the stock (but only for speculators and gamblers). It is extra crazy to go against a ticker with such uphill power. Keystone does not own NVDA long or short currently but will likely play it short if it tags 950+.

The answers are always in the charts. The monthly chart is topping-out anytime between now and July and will begin a multi-month down move. In the mean time, do not expect any great moves higher in the stock above its prior highs. The weekly chart is trying to return to prior high levels. If a short-seller, that is ideal. If price tags 950, check out the weekly chart and if all the chart indicators remains neggie d, the top is in on the weekly basis and the stock can be shorted going forward.

When this occurs, you can see how this gels with the monthly chart to see if the multi-month top is in place, or, if, as discussed above, the downside will only be a few weeks (a month), then back up for the price to place the long-term top as the MACD on the monthly chart goes neggie d. Remember, the MACD on the monthly is at such an obscene level that it can reverse now and does not necessarily have to throw off neggie d. So you don't have to guess. Watch the weekly chart and see if price hits 950+ and you will know when to short.

If you are a long-term holder of NVIDIA and made boat loads of money, scaling-out would be a prudent approach. Sell one-third of the position now then one-third in June and the final third in July or even tighter if the monthly chart tops-out as explained. It's Your Call as the up and coming Ghost Club band from Da Burgh sings with its Springsteen influence. 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 5/16/24: NVDA tags the 950 with a high today at 958.19.

Note Added 5/18/24: NVDA finishes the week at 925. As she printed the matching price top at 950+, the weekly chart is in neggie d across all indicators. NVIDIA yearnings are out in the week ahead. If earnings were not on tap, NVDA has topped out on the weekly basis, and a multi-week down move has now started. Of course, if the earnings are great and everyone receives another dose of AI hype by Pastor Jensen, NVDA may want another matching price top after earnings. Two scenarios. She continues dropping now on the weekly basis and the earnings will only serve to create serious downside negativity, or, NVDA receives a good earnings report and the stock floats a bit higher favoring the 950+ again, but this will be short-lived, a few days or week or two, and then the weekly chart will remain in negative divergence so price will begin dropping and falling into a multi-week decline. If you bring up the monthly chart, price makes matching and higher highs for the last 3 months, therefore, the indicators can be assessed for potential neggie d. The RSI, stochastics and money flow are negatively diverged calling a top on the monthly chart, however, the MACD and the histogram are showing higher highs. This tells you that price wants to drop on the weekly basis but there is another high ahead on the monthly basis with NVDA. Reference the discussion above. There is 2 weeks remaining in the month so NVDA can easily fall apart in the days ahead as explained and this activity can turn down the histogram and/or MACD on the monthly chart into neggie d which would seal the top on the monthly basis. Thus, NVDA wants to start a multi-week pullback although yearnings may delay it a few days. On 5/31/24, you can look at the monthly chart to see how the MACD and histo fared and that will tell you the path forward on the monthly basis (either a multi-week decline leading into continued soggy price action for a few months or more, or, a multi-week decline that then leads into another rally for price to come back up to the highs, say in the late June/July time frame, to place the final top on the monthly basis). Keystone does not own NVDA long or short currently and would only consider the short side over the next month but only with tight mental stops because NVDA is the top momo bullish stock right now. The Uber driver and doorman said they took their entire paychecks and bot NVDA stock. The broker guy was so friendly and encouraged them to take shares (off his hands and serve as the bag-holding sucka's). Isn't trading fun? Watch out for the sharks in the water.

The Keystone Speculator's Unemployment Rate Chart; US LABOR RECESSION STARTED 9/8/23 NOW 8 MONTHS ALONG AND COUNTING

THE UNITED STATES LABOR RECESSION STARTED ON 9/8/23 AND IS 8 MONTHS ALONG AND COUNTING. Analysts will say the markets are 'different this time' which never turns out to be true and the statement has become a meme to mean things will actually not be different this time. Well, this time things are truly different.

After over a decade of obscene Federal Reserve money printing and then Congressional fiscal stimulus during the pandemic, we are in uncharted waters. The US remains in a housing recession over the last year. Ditto the manufacturing recession. The chart above shows that the US labor recession is 8 months along and worsening again. This triumphant of gloom guarantees a recession; until now. It is truly different this time.

Japan and UK had stated that their economies were in recession. The Richmond Fed Mfg Survey called out a one-year recession. The JOLTS job openings report lists a soggy quits rate in recent months disappointing Fed Chairman Powell (a quits rate moving higher indicates that people are comfortable moving on from their jobs either to a new job or to start a business but a lower quits rate indicates that people are hunkering down at work worried about losing their current jobs not liking the prospects of finding a new job nor starting a biz). The quits rate is a favorite statistic of Treasury Secretary Yellen, that previously held Powell's job, and now the number is a Jay fave.

It is mind-boggling that housing, manufacturing and labor are in recession but the overall economy is not. Huh? Whazzat? It does not make sense but the truth is always in the numbers. The housing market is not normal since first-time buyers are muscled-out of the way by hedge funds, foreign interests and even cartels buying up every available home raising prices. What a sick America the Fed and both corrupt political parties have created.

The chart above is self-explanatory. The blue line is the US unemployment rate and the red line is a proprietary Keystone indicator. The economy and employment is fantastic when the blue rate line is below the red line. Blue above red signals trouble ahead. The redheads are always feisty and hard to handle.

The labor recession started 9/8/23 and note that from December through February 2024 it looked like the recession would end as soon as it started (blue line heading lower ready to cross back under the red line). But boiinnnggg, the blue line is now rising again and diverging up and away from the red line indication that labor conditions are worsening and the 8-month labor recession continues.

For months, traders, investors and analysts cheered the happy jobs numbers proclaiming that the economy is growing and that is the path forward with a soft landing on tap. After the Friday Jobs Report, traders are cheering the weaker than expected 175K jobs number since that means the Fed will lower rates faster. People are trained well under the cruddy crony capitalism system. They are front-running the goosing that the Fed will do. Sick stuff. The funny part is that the SPX has ran higher from about 4K to 5.2K expecting six rate cuts and traders now treat this huge move higher as if it did not happen. Like Pavlov's dog trained with a bell, modern-day traders are cheering for and happy to see weak data since that means the Fed will print more money and stocks will go higher to further enrich the wealthy class. It is the moral hazard many of us talked about over a decade ago. Crony capitalism is on its last legs.

People do not think an overall economic recession is possible since the Fed will always ride in on the pale green horse to save the day and protect the wealthy. People reporting business news and the analysts, traders and investors involved in the markets and economy daily are all millionaires or near-millionaires. The media does not provide the perspective and viewpoint of the common American. Crony capitalism created the land of the have's and have not's. Once you understand that capitalism does not exist, everything will make a lot more sense to you. La-la-la. Vault of Heaven.

Even though housing, manufacturing and labor are circling the drain, the overall economy holds up; like a drunk leaning on a lamppost but still standing nonetheless. One of the reasons things are different this time are chips. Most every product made nowadays has a computer chip. Semiconductors and technology are a new game in town that help create buoyancy in the markets and economy despite gloom elsewhere. Remember, before 1980, there was no computer technology in use, and weakness in the housing and auto industries would forecast an overall recession guaranteed. Not anymore.

In the job stats, there are lots of part-time jobs. People are working two jobs to make ends meet due to Biden's war on the US energy complex (oil and gas) that has created the heavy inflation burden placed on the backs of common folks. Rich folks do not care about inflation because their rich. Biden's open southern border problem allowing a mass migration also manipulates the jobs data. A lot of the new jobs over the last few months are the lesser-skilled jobs. Rich folks want to travel again after the pandemic so leisure and hospitality jobs increase. Workers are needed to carry bags, drive taxis and Ubers, cook meals and clean rooms for the wealthy class.

Education and health jobs increase. These are migrants or Americans working a second job cleaning bedpans and vomit off sheets at nursing homes. Hold your hand out for the American dream. Here's a bedpan that needs cleaned and don't forget to change the soiled sheets in Room 222. Retail jobs increase. This is an American needing a second job standing in the men's suit department helping customers pick socks or smelling feet as they help a wealthy dude pick out a new pair of Prada's.

Leisure and hospitality jobs increase. Migrants need to cook meals, carry bags, turn sheets, put out new towels and clean those dirty toilets. Welcome to your American dream; now get to work. Manufacturing jobs have been in decline or trying to hold steady but do show a minor increase on Friday along with construction jobs. This is migrants and others handed a broom and told to sweep the warehouse floor, or keep the construction yard free of debris, and don't forget to clean the toilets.

Most common Americans laugh nowadays when they hear the words, 'American dream', and someone typically counters with, 'yes, the American joke'. The only people still spouting the American dream blather are the uneducated and ill-informed foreign migrants or the US elite class and their upper middle class sycophants sitting on bags of money since they control the crony game and all own stocks that the Federal Reserve goosed higher over the last 15 years. The wealthy elite controlling America's rigged crony capitalism system keeps the masses at bay by making it sound like everyone has a chance. The rich played that card for the last five decades but the public now understands the game.

Thus, mathematicians say thus a lot, the US labor recession continues and is a harbinger of bad times ahead. What is likely is that Pope Powell has waited too long to cut rates so the bottom will probably fall out of the market and economy. Consumer spending will lessen sending many things down the rabbit hole and this slows when people worry about losing their jobs. Stocks and real estate will drop. Commercial real estate is already in trouble. As the bottom falls out, the banks will be in immediate trouble due to bad loans defaulting. The US is overbanked by 3K or 5K banks so some day these need to go away.

As credit conditions deteriorate quickly, banks will limit credit and this is already occurring. It is comical that the only people that can get a loan during a recession are people that do not need a loan (young people take notice since you have not seen a recession in your lives except for the goofy pandemic period where the US government saved the day misguiding-ly handing everyone and his bro mountains of printed money; if you have equity in a home, get a home equity line of credit immediately; do not use it but have it there in case you or your partner, or both of you, lose your jobs over the coming weeks and months; if you do not have equity in a home, you better put on your beggin' pads, kneel, and start kissing the boss's *ss). Common folks are drowning in debt and it all falls apart when the recession hits. The Fed will then cut rates quickly like madmen leading to the dis-inverting of the yield curve (2-10 spread) which then locks in the overall US recession going forward.

For next month's Jobs Report on 6/7/24, an unemployment rate of 3.7%, 3.8% or the current 3.9%, or higher, all signal that the labor recession continues. The game would change and the labor recession would end if a 3.6% unemployment rate or lower is reported on 6/7/24 (unlikely).

It will be interesting to see if communist China's economy can get back on track but it is not looking good since they have a property bubble bursting that is like the US 2008-2009 bubble.

Analysts have not only written-off a US recession but they do not even consider that the entire world may be on the precipice of a major global recession/depression. I Can't Believe We're Here. The unemployment rate is below 4% for a couple years this behavior not seen since the 1960's. 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, 6/5/24, at 8:30 AM EST: The JOLT survey is at 8 million job openings a 3-year low signaling more labor issues. Looking at the COVID-19 data on Worldometer, there are about 800K Americans listed as active cases which are the long-covid sufferers. These folks are likely having a hard time working; call that a million and the JOLTS data typically sits at a 5 to 6 million level. The job openings become more limited with each passing month. The jobs remaining open are likely for specialized and skilled positions or for the lower jobs on the totem pole such as cleaning toilets and turning sheets. The Jobs Report is on tap for Friday morning only 48 hours away. Look at the discussion above. A 3.7% unemployment rate and higher continues the labor recession while a 3.6% number would likely end the labor recession worries. It sits at 3.9%. A 4.0% and higher unemployment rate will set off bells and whistles.