YC2YR US Yield Curve (2-10 Spread) Weekly Chart; Yield Curve Inverted for 2 Years the Longest Ever; Tight Band Squeeze Forecasts Big Move Ahead; YIELD CURVE DIS-INVERTS FOR FIRST TIME IN OVER 2 YEARS

The US yield curve, the 2-10 spread, is inverted for 2 years the longest inversion in history. Put that in your pipe and smoke it. Typically, a recession appears within about 18 months of the inversion and we are looking at that milestone in the rearview mirror.

The first orange circle shows an inversion tease in March 2022, showing a little leg, but then quickly dis-inverted. Legs. In June and July 2022, two years ago, the inversion occurs and the 2-year yield is now higher than the 10-year yield forecasting a recession at some point forward. It is the Godot Recession. Everyone is waiting around for Godot to show up, and waiting, and waiting, ........ hey pal, we're still waiting. Where's that Godot Recession guy?

The blue hook patterns are key since they start a potential dis-inversion but you can see that every time the hook started to form, it then petered out before the spread could move back above zero and dis-invert. The parlor game continues. A recession is coming and likely extremely close since 2 years is a long time for the curve to stay inverted.

The green lines show the spread inverting further (moving down) in 2022 and the first half of 2023 but you can see the chart indicators are all positively diverged and voila, a bounce occurs off the bottom at -108 basis points. Wow. It looked like the curve was on its way to dis-invert and the recession would quickly follow but alas, the spread rolls over again after tagging -13 bips (resistance). The spread tried to dis-invert again starting at the end of last year into early this year but smack, it hit the -13 bips resistance ceiling and received a spankdown from the neggie d (red lines).

The spread staggers sideways the last few months like a drunk in Times Square last night. Note the tight squeeze of the standard deviation lines (purple arrows). Tight bands indicate that a sizable move is about to occur but they do not predict direction. It is like squeezing a tube of toothpaste; you know it is going to fly wildly out of the tube but you do not know where it will go.

The spread dis-inverted 12 bips last week to -37 bips currently. The 2-year yield is 4.75% and the 10-year yield is 4.39% so the difference is -0.36% or negative 36 bips. That is close enough for government work to the -37 bips on the chart.

The slight bump higher in the spread last week comes with the indicators giving off a sliver of possie d to help fuel the upside. Overall, however, the indicators are not tipping their hands and simply lining out sideways waiting on Pope Powell to tell everyone how to trade. The upper band at -29 bips is an upside resistance target at -28 to -29 bips. If this is taken out, the -13 bips line in the sand is the next key resistance. If this is taken out the dis-inversion will likely occur and the spread will move back above zero.

The Aroon is interesting. The red line shows that 100% of the folks expecting the spread to drop and invert deeper continue to universally expect the spread to drop again. At the same time, for those that are expecting the spread to dis-invert and move back up towards zero, nearly every one of them also believe that the spread will actually inverts further. The boat is fully loaded to the side that the inversion will deepen and continue on forever. You know that is not going to happen. Note that each bottom where the blue hook patterns would begin forming start when the red Aroon line is at 100%, like now, so that pop higher last week may be the start of a bigger move higher towards dis-inversion and recession. 

The -50 bips is strong support so if that gives way the move lower to more inversion would be in play. There is a gap below at -54 bips to -65 bips that needs filled so the baby games may send her down there first to fill that gap then afterwards will be a solid move higher to dis-inversion and recession.

Simply use the -50 bips support, -28 to -29 bips resistance, and -13 bips resistance to determine the Winners and Losers going forward. Life's a gamble, and you might lose. Are you happy with all the choices that you made? Keystone does not have any trades on long or short Treasuries 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 Tuesday Morning, 7/2/24, at 4:39 AM EST: The 2-10 spread started to test the -28 to -29 bip resistance yesterday. That did not take long. Right now, the 2 is at 4.76% and the 10 is at 4.46% for a 2-10 spread (yield curve) at -30 bips. The drama begins.

Note Added Friday Morning, 7/12/24, at 9:36 AM EST: The 2-10 spread is up to -29 bips again testing the critical overhead resistance. The 2-year is at 4.49% and 10-year at 4.20%.

Note Added Monday Morning, 7/15/24, at 7:24 AM EST: The 2-10 spread is up to -22 bips punching up through the -28 to -29 resistance that now becomes support. The 2-year is at 4.45% and 10-year at 4.23%. The -13 bips resistance is next on tap, only 9 bips away, and that is for all the marbles because if the spread pops above -13, it will likely dis-invert completely going forward (move above zero turning positive with the 10-year yield higher than the 2-year). The hook pattern is holding and as the spread disinverts the recession will appear.

Note Added Wednesday Morning, 7/17/24, at 5:53 AM EST: The spread pulls back to back kiss the -28 to -29 bips support so it is bounce or die time. If she bounces, the -13 bips resistance is on tap and the spread is on its way to dis-inversion, and US recession. If she falls through the support, the spread will likely drop lower to -37 bips inverting further repeating the same story over the last couple years. This is a big test right now at -28 to -29 bips. 

Note Added Sunday Morning, 7/21/24: The back test continues with the spread at -27 bips. The 2-year is at 4.51% and 10-year at 4.24%. It is time to bounce or die.

Note Added Wednesday Morning, 7/24/24, at 4:50 AM EST: Bounce. The 2-10 spread rises to -20 bips so the -13 bips overhead resistance is likely the next target. If that gives way, the dis-inversion will be at hand which means the US recession begins. The 2-year is at 4.44% and 10-year at 4.24%. The 2-year yield drops so traders are buying the short duration with both fists.

Note Added Wednesday Morning, 7/24/24, at 7:38 AM EST: The yield curve rises to -19 bips with the 2-year at 4.42% and 10-year at 4.23%. Dis-inversion = recession.

Note Added Wednesday Morning, 7/24/24, at 8:21 AM EST: The yield curve rises to -18 bips with the 2-year at 4.41% and 10-year at 4.23%. 

Note Added Wednesday Morning, 7/24/24, at 9:01 AM EST: The yield curve rises to -18 bips with the 2-year at 4.40% and 10-year at 4.22%. The -13 bip resistance is only 5 clicks away.

Note Added Wednesday Morning, 7/24/24, at 9:55 AM EST: The yield curve rises to -17 bips with the 2-year at 4.41% and 10-year at 4.24%. 

Note Added Wednesday Morning, 7/24/24, at 10:45 AM EST: The yield curve rises to -16 bips with the 2-year at 4.38% and 10-year at 4.22%. The -13 bip resistance is only 3 clicks away.

Note Added Wednesday Afternoon, 7/24/24, at 3:30 PM EST: The yield curve rises to -13 bips with the 2-year at 4.41% and 10-year at 4.28%. That was fast. It is bounce (poke up through -13 bips to head higher towards zero and dis-inversion and of course, recession) or die time (fall back away form -13 bips moving down towards the -28 bip to -29 bip support once again delaying the recession). 

Note Added Wednesday Afternoon, 7/24/24, at 3:45 PM EST: The yield curve drops to -14 bips with the 2-year at 4.41% and 10-year at 4.27%. 

Note Added Wednesday Afternoon, 7/24/24, at 5:05 PM EST: The yield curve drops to -15 bips with the 2-year at 4.43% and 10-year at 4.28%. The -13 bips resistance holds on the first try but the challenge remains a coin-flip; it will play out over coming days. The US stock market sh*t the bed today. The SPX mini-crashes 129 points, -2.3%, to 5427. The Dow collapses 504 points, -1.3%, to 39854 below 40K. The Nazzy mini-crashes 655 points, -3.6%, to 17342. .The stock market sell-off cascades globally. Is a worldwide recession/depression on the come?

Note Added Thursday Morning, 7/25/24, at 3:00 AM EST: The yield curve rises to -12 bips with the 2-year at 4.37% and 10-year at 4.25%. The -13 bips resistance is pierced and now getting chipped-away. Note that stocks are sold off while yields move lower (bonds and notes are bought) so some of the money from the stock market sales flows into the perceived safety of US treasuries. These are investors thinking that growth is deteriorating and may be falling off a cliff.

Note Added Thursday Morning, 7/25/24, at 4:15 AM EST: The yield curve rises to -11 bips with the 2-year at 4.34% and 10-year at 4.23%. The US recession pokes its head out of the bushes, looking each way, thinking the coast may be clear to show its ugly face. Dis-inversion (zero) is only 11 bips away.

Note Added Thursday Morning, 7/25/24, at 6:24 AM EST: The yield curve is at -13 bips with the 2-year at 4.35% and 10-year at 4.22%. The 2-10 spread sits on top of the -13 bips S/R deciding to bounce, or die. The recession hiding in the bushes is telling the spread to bounce towards dis-inversion.

Note Added Friday Morning, 7/26/24, at 4:00 AM EST: Die. The yield curve is at -17 bips, moving lower, inverting further, with the 2-year at 4.43% and 10-year at 4.26%. The short end yield jumps higher faster than the 10-year.

Note Added Friday Morning, 7/26/24, at 5:30 AM EST: The yield curve is at -19 bips with the 2-year at 4.43% and 10-year at 4.24%.

Note Added Monday Morning, 7/29/24, at 3:43 AM EST: The yield curve is at -20 bips with the 2-year at 4.37% and 10-year at 4.17%. The drama continues. The hook pattern was reversed again, for the umpteenth time, so the overall US recession remains on hold. Perhaps the next path higher in the spread back towards zero will be the hook pattern that actually plays out higher and brings on the recession?

Note Added Tuesday, 7/30/24, at 1:45 AM EST: The yield curve is at -20 bips with the 2-year at 4.35% and 10-year at 4.15%. The beat goes on.

Note Added Wednesday, 7/31/24, at 7:14 AM EST: The yield curve is at -22 bips with the 2-year at 4.35% and 10-year at 4.13%. The Fed rate decision and Powell presser is on tap today starting in about 7 hours. The 10-year yield is back down to early March levels.

Note Added Thursday, 8/1/24, at 4:10 AM EST: The yield curve is at -24 bips with the 2-year at 4.29% and 10-year down to 4.05%.

Note Added Thursday, 8/1/24, at 8:18 AM EST: The 2-10 spread is at -22 bips with the 2-year at 4.28% and 10-year at 4.06%.

Note Added Thursday, 8/1/24, at 10:50 AM EST: The 2-10 spread is at -21 bips with the 2-year at 4.18% and 10-year at 3.97%. The 10-year drops below 4%. People are seeking perceived safety driving yields lower. The stock market is selling off in force.

Note Added Thursday, 8/1/24, at 3:55 PM EST: The 2-10 spread is at -17 bips with the 2-year at 4.16% and 10-year at 3.99%. The rise higher to retest the -13 bips resistance is likely on tap and the yield curve is stronger as it heads up a second time. Perhaps the hook pattern will finally have a chance to play out with the spread up through -13 bips and then back to zero which will signal that the US recession is at hand. 13's my lucky number, to you it means stay inside, black cat done crossed my path, no reason to run and hide.

Note Added Friday Morning, 8/2/24, at 3:45 AM EST: The 2-10 spread is at -19 bips with the 2-year at 4.14% and 10-year at 3.95%. The yield curve rose to -16 bips and now slumps back to -19 bips with the US Monthly Jobs Report dropping in less than 5 hours.

Note Added Friday Morning, 8/2/24, at 8:33 AM EST: The US Monthly Jobs Report lays an egg reporting only 114K jobs and downward revisions. Last month drops to 179K from 206K jobs. The unemployment rate jumps to 4.3% so that will maintain Keystone's labor recession indicator and the Sahm Rule will finally be triggered. Gee, thanks a lot after the stock market is already tumbling, notes and bonds are going to the moon (higher prices, lower yields), and it looks like the Fed has waited too long to cut, the Sahm Rule now hints at danger ahead. Danger Will Robinson! Danger! Growth scare..... Policy Error .... Danger Will Robinson..... Growth Scare ..... Policy Error .... Wages disappoint like the rest of the data with only a +0.2% increase on month and the annual wages are down to 3.6% missing the 3.7% estimate and below last month's 3.9% revised down to 3.8%. The jobs data is a turd. Wow. The 2-year yield plummets to 3.86% and 10-year yield collapses to 3.80% for a spread of only -6 bips. The yield curve is dis-inverting signaling that the US recession is likely on hand. Let's see if the 2-10 spread will move above zero for a full dis-inversion (10-year yield higher than 2-year yield). S&P futures drop to -96 points or -1.8%. The Nazzy is down -2.5% and the RUT small caps are down -4%. It is a bed-sh*tting. Europe loses hope after the US jobs report with the major indexes across the pond tanking -2%. Italy's MIB collapses -2.5%. There were nothing but bulls remaining in the US stock market; the bears had all given up hope. Now the bulls are running around in a panic trying to sell shares to each other as prices fall like rocks. It's fun.

Note Added Friday Morning, 8/2/24, at 9:38 AM EST: The 2-10 spread is at -11 bips with the 2-year at 3.96%, now under 4%, and 10-year at 3.85%. The -13 bips resistance gives way and now becomes support. A back kiss to -13 would be in order and then a bounce higher towards zero, to prove that up is the path forward; up and marching into recession.

Note Added Friday Morning, 8/2/24, at 10:03 AM EST: The 2-10 spread is at -12 bips with the 2-year at 3.96% and 10-year at 3.84%. 

Note Added Friday Morning, 8/2/24, at 11:36 AM EST: The 2-10 spread is at -7 bips with the 2-year at 3.89% and 10-year at 3.82%. 

Note Added Friday Afternoon, 8/2/24, at 5:09 PM EST: The 2-10 spread is at -9 bips with the 2-year at 3.88% and 10-year at 3.79%. The smoke needs to clear in the markets over the weekend; it was quite a week..

Note Added Sunday Evening, 8/4/24: The cascading global stock market selloff, quickly becoming a crash, continues rotating around the world. The US yield curve (2-10 spread) is up to -4 bips a hair from dis-inversion, and recession. The 2-year yield is 3.76% and 10-year yield 3.72%.

Note Added Monday Morning, 8/5/24, at 3:30 AM EST: The US yield curve (2-10 spread) is at -4 bips a hair from dis-inversion, and recession. The 2-year yield is 3.79% and 10-year yield 3.75%.

Note Added Monday Morning, 8/5/24, at 4:40 AM EST: Traders now estimate a 60% chance that the Federal Reserve will cut 25 bips within the next week. Oh my. That is panic. If the Fed would do that, it would create panic that the economy is far worse than thought, however, investors are already panicking running around with their hair on fire during the global stock market rout since Thursday. The US yield curve (2-10 spread) is at -4 bips a hair from dis-inversion, and recession. The 2-year yield is 3.81% and 10-year yield 3.77%. 

Note Added Monday Morning, 8/5/24, at 7:03 AM EST: The US yield curve (2-10 spread) is at -1 bip almost dis-inverted (bull steepener) and probably, finally, signaling recession. The 2-year yield is 3.7581% and 10-year yield 3.7435%. The S&P futures are down -148 points, -2.8%. VIX is 50+.

Note Added Monday Morning, 8/5/24, at 7:33 AM EST: The 2-year and 10-year yields sit at 3.73% remaining only one tiny hair inverted. The S&P futures plummet -163 points, -3%, to the lows of the session. VIX 50.68. NVDA pukes -13%. MSFT collapses -7%. Bitcoin is at 50,947.

Note Added Monday Morning, 8/5/24, at 8:42 AM EST: The 2-year is at 3.6559% and 10-year yield is at 3.6672%. Sound the Seven Trumpets!!  THE US YIELD CURVE DIS-INVERTS FOR THE FIRST TIME IN OVER 2 YEARS. Normalcy returns with the 10-year yield a single hair above the 2-year yield.

Note Added Monday Evening, 8/5/24, at 6:02 PM EST: If you blinked during the dis-inversion of the yield curve, you missed it. The yield curve re-inverted quickly this morning with the spread widening again. The 2-10 spread then dropped from the slightly positive number back down to the -0.13% support. The 2-year yield is at 3.92% and the 10-year yield is at 3.79%. The zero level and dis-inversion is obviously a big deal so it would be expected for yield to stab at the zero resistance once or three times before thrusting up through. The spread likely re-inverted as traders believe that a 50-bip cut is likely not coming. The hook pattern is continually spanked back down delaying the recession.

Note Added Tuesday Morning, 8/6/24, at 4:32 AM EST: The 2-year yield is at 3.97% and the 10-year yield is at 3.85%. The spread is at -0.12 bips. The back kiss is successful so far; the -0.13% support is holding.

Note Added Tuesday Afternoon, 8/6/24, at 4:15 PM EST: The 2-year yield is at 3.98% and the 10-year yield is at 3.90%. The spread floats higher to -8 bips. The back kiss is successful so far; the -13 bip support is holding.

Note Added Wednesday Morning, 8/7/24, at 4:32 AM EST: The 2-year yield is at 4.00% and the 10-year yield is at 3.91%. The spread is at -9 bips. The -0.13% support is holding. The spread has been at -9bips, with that brief increase to -8 bips, for the last half-day as the yields fluctuate up and down. The BOJ steps in verbally to weaken the yen and create lift in US stocks.

Note Added Wednesday Morning, 8/7/24, at 9:09 AM EST: The 2-year yield is at 3.99% and the 10-year yield is at 3.93%. The spread is at -6 bips. 

Note Added Wednesday Evening, 8/7/24, at 8:33 PM EST: The 2-year yield is at 3.96% and the 10-year yield is at 3.94%. The spread is at -2 bips. Only 2 measly bips from complete dis-inversion, and recession.

Note Added Thursday Morning, 8/8/24, at 8:50 AM EST: The 2-year yield is at 4.04% and the 10-year yield is at 3.99% after the US Jobless Claims happy data. The spread is at -5 bips. 

Note Added Friday Morning, 8/9/24, at 3:18 AM EST: The 2-year yield is at 4.02% and the 10-year yield is at 3.96%. The spread is at -6 bips. 

GOLD Daily Chart; H&S (Head and Shoulders) Pattern; Gaps

Here is a look at gold in the daily time frame. The H&S jumps out at you. The yellow metal was in orgy mode during March and April with the 2-leg bull flag playing out higher. The first leg is 2000 to 2190 a difference of 190. The sideways consolidation occurs (flag) with a slight downward bias, that looks good, then second leg begins at 2160 so upside target is 2350. It is achieved as gold exploded higher creating gaps that look like swiss cheese (blue circles).

The red lines show two neggie d spankdowns. Interestingly, there was no need for price to come back up for another high in May since the chart indicators were out of gas but it did; there must have been some hype news about something, or a weaker dollar. Price quickly fell again receiving the neggie d spankdown.

The H&S has a neckline at 2310 and head at 2440 so that is 130 difference. The downside target is 2180 (2310-130) if the 2310 neck gives way. There are several gaps that need filled on the way down to the 2180 target which is the consolidation area of that 2-leg bull flag on the way up.

The chart indicators are stumbling sideways, like price, not tipping its hand. If you bring up the weekly chart, it is ugly. The H&S has an ominous descending triangle look to it. Also, the chart indicators on the weekly chart are weak and bleak wanting price to be pulled lower on a weekly basis. This does not portend well for the daily chart and the H&S (it will likely fail).

Keystone does not own any gold ETF's or derivatives now long or short. If the neck fails for the H&S, you know where she's going. That sounds like an Eagles tune. She's goin' to the cheatin' side of town, and she can't hide those Lyin' Eyes. What a shame. City girl, there ain't no way to hide those lyin' 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 Tuesday Morning, 7/2/24, at 4:43 AM EST: Gold 2339.

Note Added Saturday Morning, 7/13/24, at 6:48 AM EST: Gold floats higher to 2421 creating a potential triple top. On the gold weekly chart, price prints the matching high but all the chart indicators are negatively diverged so a multi-week down slide would be expected to start soon. There is some momo on the daily chart the last couple days and a guess at a top in gold would be next week. Note that price bounced off the H&S neckline refusing to fail into mayhem, for now. The current price action can be considered the right shoulder for the H&S so nothing has changed with the pattern explained above. The 2310 neckline remains the line in the sand. Gold bulls can party and have a good time as long as the yellow metal stays above 2310. If gold loses 2310, the party will turn ugly with drunken fights and the cops arriving with bright lights and sirens. In the week or two ahead, gold's trip top and H&S patterns will likely be resolved, either with price exploding higher nullifying the triple top and H&S, or, price collapsing into the abyss, through 2310, placing into motion the H&S downside target at 2180, and proving that triple tops do exist.

Note Added Saturday Morning, 7/17/24, at 6:00 AM EST: Gold flies higher to 2468 popping intraday to 2475 a record high. Gold bugs are high-fiving each other as the H&S pattern is nullified (price moves above the head). The 2310 neckline support held on 6/27/24 with gold printing 2306 and then popping now to 2475, a big +7.3% gain in only 12 trading days. The weekly chart remain in negative divergence so a top in gold will likely set up again in a couple weeks or so and bring in a multi-week move lower. Soundbites, the Fed and politics are driving the dollar, gold and other plays.

Note Added Sunday Morning, 7/21/24: Gold has an orgy party as Pope Powell hints at rate cuts coming catapulting to 2488.40 a record high. Gold bugs are throwing confetti and singing songs like Gold on the Ceiling. However, gold falls on its sword dropping to 2399. Bring up a weekly chart and the neggie d across all indicators is staring you in the face. What part of that don't you understand? Last week was the likely start of a neggie d spandown and start of a multi-week decline in gold. Powell speaks next week so he may save it, or stick a knife in it. The expectation is for a multi-week pullback in gold to begin. There is a juicy gap at 2250 that needs filled.

Note Added Monday, 7/22/24: Gold 2394.

SPX S&P 500 Monthly, Weekly, Daily and 2-Hour Charts; All-Time Record High SPX 5524; Overbot; Double-Top; Negative Divergence; Rising Wedge; Upper Band Violations; Potential Island Reversal; SPX Prints All-Time Record High at 5656 on 7/12/24

The task the last few days was to wait for the neggie d to set up in the charts so a top can be called. The red lines above show that negative divergence rules the day across all time frames. Stick a fork in it, it's cooked.

Stock trading is like playing multi-dimensional chess with the time frames the dimensions. This is why long or short calls on stocks by television evangelists are stupid and meaningless if they do not provide a time frame. That leaves the story-teller a way to weasel out of the call that is wrong by saying he was referencing a different time period. That is called baby games. The only reason analysts and money managers appear on television is for the publicity to attract money into their funds.

Conceivably, you can have the stock market bullish in the 2-hour time frame (very short-term; VST), bearish on the daily basis (short-term; ST), and bullish on the weekly basis (intermediate-term; IT), and bearish on the monthly basis (long-term; LT). That is why a person that makes a call on the market and in the same breath also identifies a time period for that call is a good analyst. He/she may be wrong but at least they had the guts to make a call on the market and not hide behind the ambiguity bush playing baby games.

Right now, as the charts above demonstrate, the US stock market is set up for the bears in the 2-hour, daily, weekly and monthly time frames. If you are holding stocks long, you are known as the bagholdin' sucka. Hi sucka. Every top needs sucka's.

The 2-hour shows universal negative divergence with price printing a new all-time record high at 5523.64, call it 5524, and then falling on its sword receiving the neggie d spankdown. The RSI and stochastics drop below 50% into bear territory and remain weak and bleak. The MACD and money flow are about to print lower lows.

The standard deviation bands are pulling in tight so a big move is expected and down may be the direction. The lower band remains on the table at 5446. The pink arrows show prior tight squeezes resulting in a down move in May and up move in June.

The potential island reversal pattern was previously mentioned and a palm tree remains on the island. The bulls kept the SPX elevated after the WWDC Apple and AI hype and Fed dovishness extending the length of the island that was formed due to the gap-up from 5375 to 5410. An island reversal pattern will occur if the SPX falters and sinks down to 5410, and then in a heartbeat, collapses back down through the gap to 5375. So that is something to watch for going forward. If the island reversal does not occur, price may simply trail lower and trail down through the gap, filling it, and then drifting ever lower.

Note how there is a big volume candlestick a week ago on the buy side as the hype was in full swing. Price sinks to the same price range area on Friday and the selling volume candlestick is the same amount as the buying volume candlestick showing that price is in a sideways funk and not thrilled about either direction with the bias favoring the bears.

On the SPX daily chart, same-o, same-o, you lame-o. Double-top, or M-top if you prefer, universal negative divergence across all indicators, and the RSI and stochastics coming off overbot conditions; are all bearish indications. Price needs a neggie d spankdown in the daily time frame as well as the 2-hour time frame.

Price has violated the upper band so the middle band, that is also the 20-day MA, at 5408, is on the table as well as the lower band at 5268 moving sharply higher. The SPX is above the moving average ribbon so a mean reversion lower is required.

Those are some big selling volume candlesticks over the last week. The blue circles show bigtime distribution occurring. Price shot up so Joe Sixpack, Jane Winedrinker and Carlos Bagholder run in to buy the market on the hype and the institutions are all too eager to slough-off shares to the sucka's. Those 2 blue circles show the smart money handing off shares to the dumb money.

On the SPX weekly chart, what do you see? Neggie d. I see a red door...., er, red chart.... Paint It, Black. I see the girls walk by in their summer clothes. Ooh-la-la. The red rising wedge pattern is more prominent on the weekly chart; this is a bearish pattern that shows price is spent when it makes it to the apex of the triangle, like now.

Again, the red lines show universal neggie d. Price moves higher but all the chart indicators that fuel the move higher are out of gas. There are not even any fumes remaining. On that last push higher due to WWDC and AI hype and Fed hype, the RSI came up but note how it is flat again and remains overbot and in negative divergence. It is beautiful stuff for bears and those shorting the market now.

Price violated the upper standard deviation band so the middle band, that is also the 20-wk MA, at 5215, is on the table and the lower band down at 4938. Two selling volume candlesticks this year are higher than all other volume candlesticks for the whole year and going back to December. In other words, the two biggest volume weeks for the US stock market over the last half-year are selloffs.

The last of the four charts is the monthly chart that is a long-term picture of the US stock market. It is also an ugly chart that walked into an ugly forest and bumped into every tree. The ramifications of this chart are huge since it is forecasting for months and a year or few. We could be looking at stock market prices at all-time record highs that may not be seen again for 5 or 10 years.

The red rising wedge is bearish. So is the universal negative divergence (red lines). The MACD line is trying to create some additional strength in the monthly time frame but it is muted by the ongoing neggie d over the last 2 years. Same-o with money flow. After the multi-week down move plays out going forward, stocks will bounce and rally in the weekly time frame. That is when you will see how much upside oomph remains on the monthly chart. There is not much.

The monthly chart either begins its long journey south now, with a multi-month down move starting, or, price will trail lower for a month, but then show buoyancy again for a month or so, then roll over and die for the multi-month move lower. The charts will tell you so there is no need to guess.

The upper band is violated so the middle band, that is also the 20-mth MA, at 4538, is on the table as well as the lower band at 3590. That would get everyone's attention. The 12-month MA at 4824 is one of the most important numbers in the stock market. If the SPX drops to 4824 and loses this support, the stock market will be in a crash profile from there forward.

What does all that mumbo-jumbo mean? It sounds like he's feeding us a lot of bull, or in this case, bear. All four of the time frames above are in negative divergence across all chart indicators (red lines) so a spankdown should begin in all time frames. The CPC put/call ratio is at 2-1/2 year lows signaling out of control uber bullish euphoria another indication of a significant stock market top. Sell, Mortimer, sell! Are you ready?

The 2-hour and daily chart will create weakness in stocks in the daily time frame and near-term (the week ahead). Once the weakness on the daily chart plays out, say a week or three down the road, simply watch the chart, and for positive divergence to form, and you will know a rally will occur in the daily time frame for a few days but that will roll over again and die since the multi-week down move is in progress (sell the rallies going forward). The charts will help you trade any time frame but obviously on the short side is where you want to be.

Keystone is holding index shorts now. The Keybot the Quant robot remains long the stock market but will likely want to flip short if the XLF loses 41.02 and the SPX falls below 5451 heading lower, so watch these two parameters like a hawk on Monday and Tuesday.

It is time for the bulls and bears to battle. The bears are bringing bazookas and firepower while the bulls have a pen knife to defend themselves. Time to rumble. Beat It.

That said, new money flows into the stock market at the start of a month and especially the start of a quarter and second half (Q3 and H2). This activity may extend the buoyancy in stocks for the first few days of July. It is also a goofy weak with July 4th Independence Day on Thursday so markets will be closed. Also of interest is the excessive window dressing that occurred in late June where every money manager had to buy NVDA, Mr Softy, and other tech and AI stocks to show these holdings on the quarterly statements going out to clients, but a lot that may be unwound in quick order as traders and investors cash-out and lock-in profits choosing to sit-out for a little bit and look to reload stocks at lower prices. Monday and Tuesday will be interesting days.

The stock market is going to be lots of fun going forward. That is, if you are a shark in the water. It will be interesting to see how fast a panic may set in once the neggie d kicks in. As usual, the Fed may save the day on Monday or King Jensen may show up with more AI hype and razzle-dazzle; he knows how to sell the sizzle and not the steak, and also sell the picks and shovels like the Gold Rush days.

The Fed has technicians chained to desks in the basement of the Eccles Building, they use the hidden entrance behind the full-grown arborvitae, so Fed Chairman Powell and his gang, and Treasury Secretary Yellen and her staff, know what is coming. The Fed is probably telling Jensen to start waving another black chip box in the air while also telling Cook to cook the books to save the stock market.

I love the smell of napalm in the morning; perhaps Monday morning. Apocalypse Now. Pull back your units, boys, get the Hell out of there, we're going to light it up. Bring in the air ships. You know, someday this stock market and the crony capitalism system, is going to end. 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, 7/2/24, at 4:46 AM EST: SPX 5475.

Note Added Wednesday Morning, 7/3/24, at 6:36 AM EST: Pope Powell brags that the improvements in inflation are "significant" hinting that cuts are likely coming sooner than most think. Let the orgy begin. The SPX pops 33 points with traders throwing confetti as dove Powell flies around the trading floor. New money for the new half and quarter, a dovish Fed, more AI hype, and the happy holiday tomorrow create lift in stocks. Banks remain elevated keeping stocks elevated. Bulls are trying to pump copper higher to extend the rally. The SPX closes at 5509.01, closing above 5.5K for the first time in history. The all-time high is 5523.64 on 6/28/24. America is off tomorrow and the Jobs Report is Friday morning, and trading volume will be more robust next week. Interestingly, the new moon peaks Friday and stocks are typically soggy moving through the new moon each month. Nothing has changed in the charts; neggie d still rules going forward.

Note Added Monday Morning, 7/8/24, at 7:33 AM EST: Stocks rally after the Jobs Report on Friday with the unemployment rate rising to 4.1%. Cuts are likely coming faster than most think so stocks rally last week; the holiday also helps to create joy. Bullish euphoria is over the top. More Americans are playing the stock market than ever before in history. Oppenheimer's Stoltzfus raises his SPX forecast to 5900. Evercore's Emmanuel predicts SPX 6K. CNBC commentator Jim Cramer tells traders to embrace Big Tech and their dominance in the stock market. Much of the recent behavior is reminiscent of the dotcom bubble in 1999-2000. It remains comical that 7 rate cuts were priced into stocks as the year started, then this went to zero cuts, but the stock market went higher anyway, and now with the path clear to cuts as the labor market rolls over, stocks go up again. It is Pavlov's economic dog that buys stocks every time the Fed hints at a rate cut regardless of the price level of the stock indexes. There must be 10 price cuts, or 2.5%, already priced-in to US stocks and not one has occurred as yet. It will be fun to watch going forward.

Note Added Tuesday Morning, 7/9/24, at 7:45 AM EST: Stocks rally on Monday sending the SPX to 5573 its 35th record high for the year. The bullish euphoria continues. The low CPC, CPCE and CPCI indexes verify the uber bullish euphoria these days with the Fed wine flowing like water. Only 10 stocks in the SPX account for nearly 30% of the index. That's hilarious. 10 years ago, those stocks accounted for only 14% of the index. CNBC commentator Jim Cramer proclaims big upside for stocks next month based on past history leading the bull bandwagon. Nine of the top 14 Wall Street investment banks and trading houses predict that the SPX will finish the year, less than 6 months away, above 5500 with Evercore at 6000, Oppenheimer at 5900 and RBC at 5700. Yardeni updates his SPX target to 5800 In other words, the Wall Street greed machine says stocks will continue rallying far higher, perhaps to a 6-handle on the SPX (an +8% gain above current levels), within the next 24 weeks. There is little talk of downside. Piper Sandler is no longer releasing end of year SPX targets saying the indexes are too disjointed due to the runaway tech/AI sector. No guts, no glory; Pied Piper babies. Pope Powell speaks to the US Senate today. The drama continues.

Note Added Saturday Morning, 7/13/24, at 7:00 AM EST: Pope Powell rode in on his pale green horse last week preventing the stock market from falling to protect his wealthy butt as well as his elite handlers. Isn't the crony capitalism system sickening? Fear not, it is on its last legs. The Powell orgy saves the day with the SPX catapulting higher from 5458 on 7/2/24 to an all-time record high in history at 5656 yesterday, a humongous +5% gain in only 7 days of trading. The Fed dovishiness already guaranteeing from 7 to 10 rate cuts going forward, along with the AI hype machine, continue sending stocks higher. Money managers are in heaven since it is also easier to slough-off shares to the young excited naive investors that serve as the bagholders. The behavior is similar to the dotcom bubble top. Let's take a look at the charts again to see what Powell and AI may have changed. On the SPX daily chart, price makes 3 matching highs for Wed, Thurs and Friday. Thus, the chart indicators can be assessed for neggie d to see if a top is in. Check. The RSI, MACD, histogram, stochastics and money flow are all negatively diverged and out of gas unable to push price higher in the daily time frame. The MACD is flat but that is the same as neggie d with price elevated. The money flow receives a boost late last week but remains far below prior levels and some of that joy is short-covering along with the Fed and AI hype machines. The selling volume for the down day on Thursday is substantively higher than the up days that bookend it (bearish). So the daily chart is topped-out again after the 1-1/2 weeks of July 4th holiday hype. If you bring up the 2-hour chart, price makes the new high on Friday with neggie d across all indicators and voila, the SPX is spanked down in the 2-hour time frame as witnessed on Friday afternoon. On the SPX weekly chart, it is easy to see the steady move higher over the last year in an organized machine-way. About 95% of the trading over the last year is performed by robots. Anyhoo, price makes the new record high and the RSI is flat, neggie d, and definitely neggie d since the last price peak in early April. Yinz may have better eyes than Keystone looking at that little RSI line. The MACD line is neggie d across the last 4 months but showing a little bit of lift over the last couple weeks as Pope Powell flies above Wall Street in his white dove costume dropping bundles of cash channeling prior Fed Chairman Bernanke that dropped money from helicopters (the Fed is leaning more towards starting rate cuts). Wall Street cheers Powell. Traders carry him around on their shoulders singing For He's A Jolly Good Fellow; he is the goose that lays the golden eggs for America's wealthy class that own stocks. The histogram, stochastics and money flow remain neggie d so the charts are reset for the top again now that the holiday is in the rearview mirror and the Fed and AI hype have worked through the system over the last 11 days. The week ahead should be lots of fun. Stock market bulls need good news and more AI and Fed dovish hype to keep the upside party going. Otherwise, without happy talk, stocks would be expected to roll over and begin a multi-week slide lower. Bank earnings are key since they will either initiate the downside in the stock market going forward, or, provide oxygen for the sick stock market patient allowing him to hang on for another week or two before topping-out on the weekly basis.

Note Added Tuesday, 7/16/24: SPX prints a new all-time record high at 5670.

Note Added Wednesday, 7/17/24: SPX 5588. The Powell, inflation data and jobs numbers euphoria over the last couple weeks appears to be priced-in.

Note Added Thursday, 7/18/24: SPX 5545.

Note Added Friday, 7/19/24: SPX 5505. LOD 5497. The SPX drops -3% in 3 days. The S&P 500 falls -1% for each of two days following the record high which has never happened before in the history of the stock market.

Note Added Wednesday Afternoon, 7/24/24, at 5:15 PM EST: The US stock market sh*t the bed today. The SPX mini-crashes 129 points, -2.3%, to 5427. The Dow collapses 504 points, -1.3%, to 39854 below 40K. The Nazzy mini-crashes 655 points, -3.6%, to 17342. .

CPC Put/Cal Ratio Daily Chart; Rampant Complacency Signals Significant Stock Market Top At Hand

A couple weeks ago, Keystone showed that first spike lower on the put/call ratio signaling rampant complacency and now a second move into this extreme bullish euphoria zone occurs. Typically, a top would have already occurred for the stock market and the downside would be in progress but these are not typical markets. Stocks remain buoyant as the Federal Reserve continues cooing dovishly promising future rate cuts as far as the eye can see and at the same time there is new AI (Absolute Insanity) hype news hitting the wires each day.

In general, you want to buy stocks when there is panic and fear (1.20+) and people running from the stock market with their hair on fire. That behavior marks a bottom. Conversely, like now, when there is rampant complacency and fearlessness (-0.80), the most bullish euphoria in 2-1/2 years, you want to sell stocks.

The fuse is lit on the ticking time bomb that is the US stock market. It's a shame that Grandma Juanita took her entire life savings, that she kept in a Maxwell House coffee can under her bed, to a broker and told him to buy NVDA stock. She expects to be filthy rich this time next year like all the talking heads on television told her. Every top needs the bag holders. Sucka's.

Take your profits folks. The US stock market is topping out and about to start a multi-week down move. If you keep holding on to your longs, Ka-Boom; it may be too late. 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.

AAPL Apple Daily and Weekly Charts; Golden Cross; W-Pattern Bottom; Triple Tops Do Not Exist; Tweezer Top; Negative Divergence Continues

Apple, Google, Mr Softy, and of course NVIDIA, are all under a magnifying glass as they grow to the sky on the AI hype that feels a lot like the dotcom hype. Instead of Pets.com, we have Chewy. Instead of Webvan.com, we have Grubhub, DoorDash, Instacart and many others. Tech stocks are all the rage like the party in 1999, a la Prince. Traders and investors, donning fleece vests with embroidered tech company logo's, kneel before Prophet Jensen that is holding up a black box that he calls the latest AI chip, but it looks a lot like a spray-painted Amazon delivery box. Companies are diversifying away from their core businesses these days buying goofy stuff like Enron back in the day buying bowling alleys and movie theatres not even remotely related to energy. It's fun to watch the greedy little humans.

Anyhoo, the previous Apple chart, linked here, discussed the potential triple top. There is an old adage among chart technicians that 'triple tops do not exist'. Apple was set up to answer this question as the three blue asterisks show on the weekly chart. If AAPL price would have fell from the third top, it would have proved that triple tops do exist, but alas, the hype from the WWDC conference created an upside Caligula orgy rally. Confucius says, "There is no such thing as a triple top." Well, it actually was a message in a fortune cookie in Times Square. In truth, Keystone has studied tens of thousands of charts and the trip tops are a 50/50 proposition just as many sustaining the triple top as there are charts that break up through nullifying the triple top like the Apple chart above.

Jumping over to the daily chart, the gold circle shows the golden cross where the 50-day MA crosses above the 200-day MA signaling bullish party time ahead. It is always fun to listen to the idiots on television and the internet discuss the golden and death crosses (the death cross is the black circle) since they always get it wrong. Sure, the death cross indicates price sogginess ahead and the golden cross indicates price joy, however, they let out the most important aspect of the patterns.

When a death cross occurs, price typically rallies for several days or a couple-three weeks. This is because a long sustainable downhill slide had to occur to send the moving averages lower and then cause the 50 to slip below the 2 hundo. After all that negativity, you would need a boost, and price does as well and will typically begin a relief rally. Visa versa for the golden cross, like now. When a golden cross occurs, price worked hard to pull those moving averages higher and get the 50 to cross up through the 2 hundo, so it needs to take a rest from all that partying. And the slump and pull back occurs as the chart shows. Time will tell how long the golden cross remains in play but, by definition, the 50 and 200-day MA's will not curl down until price drops below that 187 area.

On the AAPL daily chart, the blue lines show a W-pattern bottom, and a nice bottom it is as David sings. Sometimes the W bottoms have an extra hump; an extra hump never hurt anyone. W patterns are strong bullish set-ups and if under either the 50 or 200-day MA when it forms, it will be a stronger rally, and if the W forms under both the 50 and 200, it will be even a stronger rally higher once it breaks out. The W above in the daily chart is below both the 50 and 200, and it is 13 points in height so the breakout at 178 targets 191 which was achieved easily. The WWDC orgy took it up another notch.

The chart indicators on the daily chart all all in negative divergence except for the MACD line that still has some fumes in the tank to bring price up again in the daily time frame. Considering the doom and gloom presented by the other indicators that now want more downside, the MACD may be a moot point and price will continue to run its downside course in the daily time frame. If price comes up for a matching high this week and the MACD goes neggie d, you can call the top in AAPL in the daily time frame. 

Note the huge selling volume on Friday. Traders and investors were cashing-in on Sapple while encouraging Joe Bagholder to buy the shares on the AI hype. Some say indexes, ETF's and funds have to rebalance their AAPL and NVDA positions due to weighting requirements and the expectation is for investors to reduce exposure to Apple and increase it to NVIDIA. However, NVDA's selling pressure on Friday was somewhat normal so the big volume appears to be more of an Apple thing. Perhaps the behemoth Sapple has run out of ideas and all they have to offer is different colors of the iPhone these days? Or are they on the verge of being one of the AI kings going forward.

Comically, the only ones that have made money in AI are the ones selling the chips and software. It is just like the gold rush where the big winners were the men selling picks and shovels to the sucka's. NVIDIA, Microsoft, Google, Apple, they have their chests puffed-out but what will happen when everyone realizes AI does not live up to the hype. Keystone has a new name for Artificial Intelligence. Let's call it 'Cut and Paste' or maybe 'Boilerplate Reorganization'.

If businesses do not understand, in detail, how the work flows through the company, and everyone's role, and every standard document and specification is available, AI will be useless. Didn't everyone learn this when the SAP software hit corporations in the 2003-2010 years and was supposed to streamline and revolutionize business? All it did was make companies realize how poorly managed and inefficient they were. You cannot polish a turd. You cannot make something run more efficiently with fancy tools if you do not understand how it works.

The red lines show the neggie d in play on the weekly chart. The MACD line and histogram have a hair of upside juice available although the MACD is clearly in neggie d over the multi-month period. The dark blue circle shows a Tweezer Top over the last couple weeks which tend to indicate a significant top. The long shadows extending upward make the candlesticks look like a pair of tweezers. This pattern also occurs at significant bottoms sometimes as well with the shadows extending downward and it is called a tweezer bottom. There is lots of talk about bottoms this morning with this motley crew. Girls, Girls, Girls. Woo!

The volume candlesticks show that most everyone that jumped in long on the WWDC hype, took the money and ran at the end of last week. The path ahead is down for a multi-week pullback. Price may try to jog higher over the coming days or week or so due to the stubborn MACD's, but if so, that jog move would mark the top and the start of the mutli-week move lower. The long romance with Sapple may be over. The Romantics.

Keystone is not long or short AAPL currently. If he played, it would be on the short side going forward. 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, 7/2/24, at 4:47 AM EST: AAPL 216.75.

Note Added Saturday Morning, 7/13/24, at 7:35 AM EST: AAPL 230.54. The bulls are pumping the rotten apple higher and higher after the triple top nullification. If you bring up the weekly chart, price makes a new high with the RSI flat, which is neggie d. The stochastics are also neggie d and both are overbot so this is all bearish wanting AAPL to place a top and begin a multi-week move lower. The MACD line, histogram and money flow eek out new highs, however, so they still have some fumes in the tank to help price remain elevated and even squeeze out a slightly new high. A jog move will be needed to turn the indicators neggie d (down-up), maybe even 2 jog moves, so AAPL will likely place a multi-week top anytime over the next 3 or 4 weeks. It could be in the week ahead if things deteriorate quickly. Price would not be expected to move substantively higher due to the neggie d and overbot conditions with the RSI and stoch's. But, as always, no need to guess, simply watch for when the weekly chart sets up with neggie d across all the indicators and you can call the top in Apple (this month) and start of a multi-week slide lower.

Note Added Wednesday Morning, 7/24/24, at 5:02 AM EST: AAPL 225.01. The negative divergence remains across all chart indicators on the weekly chart except for the MACD squeezing out a nose-bleed higher high. Thus, the top, on the weekly basis may need a jog move (down one week, up the next week for the top) for the MACD to go neggie d and verify the top. She's almost there. Apple should top out anytime over next couple weeks or so and begin a multi-week move lower back into that sideways channel at 165-195.

NVDA NVIDIA Weekly and Daily Charts; Overbot; Rising Wedge; Negative Divergence on Daily and Developing on Weekly; Upper Band Violation; Price Extended; Key Outside Reversal; Excessive Bullish Euphoria

Who is ready for some advanced Charting 401? NVDA is the poster child of the big US stock market rally this year. Just like bitcoin and blockchain, when those words became part of the American lexicon, stock prices jumped higher if you included those words in your quarterly report. The latest favorite flavor on Wall Street is AI; Artificial Intelligence. Mention AI in your earnings call and an orgy of buy programs will hit the tape for that ticker creating fantastic stock market gains for the wealthy class.

We are in June and there are only 6 trading days remaining in the month (EOM), quarter (EOQ2) and the first-half of the year (EOH1). The extension in NVDA this month is in part due to window dressing where every corrupt Wall Street manager needs to show the NVDA ticker in their quarterly reports so the upper middle class sycophants, that service the wealthy elite, that own stocks, can brag to coworkers at the water cooler that they own NVIDIA.

Let's start with the spaghetti on the daily chart. The red rising wedge pattern is bearish. Price prints another new high yesterday jumping +3.8% in early trading, but then fell on its sword ending the session down -3.5% losing over -7% intraday. The candlestick prints a key outside reversal day which is a negative indicator going forward. Typically, with outside reversals, the weakness comes, but not right away, usually a few days or couple-three weeks pass before the real downside starts to kick-in.

Back in early March an outside reversal day was printed. Sogginess followed for a few days but you see price came back up for a matching high in late March, then it was all downside after that. The same fractal may occur this time around.

So price prints the higher high yesterday, and following the thin black line downward you see that all the chart indicators are sloping down with negative divergence (the indicators are negatively diverging away from the rising prices; the ticker is out of gas). That is an easy top call for the daily time frame so a few days of weakness is expected ahead.

The ADX continues showing a strong trend higher for NVDA (pink box) although less so than the prior strong trend higher from late January to early April. The ADX lags all other indicators so it would likely be last to roll over as prices drop. NVDA would not be in serious trouble until it lost the 28-30 level since that would indicate that the strong trend higher in the daily time frame is officially over.

The Aroon is fantastic. The green line shows 100% of the bulls believe NVDA stock will go up forever and the red line shows that 100% of the bears also believe NVDA stock will go up forever. That's funny. It is called over the top excessive bullish euphoria. Everyone is on one side of the boat, drunk as skunks, buying NVDA with every spare coin in their pocket. They brag that in a couple years they will be millionaires.

The blue circles show the distribution days occurring since April. Humorously, the ladies can interpret the April distribution days as a Rorschach test. Benny Hill. Anyhoo, you clearly see the smart money passing off shares to the dumb money in April as prices stalled. Even as NVDA rallied again, the smart money keeps distributing stock to Joe Sixpack, Jane Winedrinker and Carlos Bagholder.

The upper band is violated on the daily chart so the middle band, that is also the 20-day MA, at 119, and rising, is on the table as well as the lower band at 98 and rising sharply. Price is extended above the moving average ribbon so a mean reversion lower is needed.

On the NVDA weekly chart, a lot of the same technical analysis is at play. The red rising wedge, negative divergence developing, upper band violation, price extension, overbot conditions, all bearish indications.

Note, however, that the chart indicators are neggie d except for MACD line and histogram. They want price to come back up for another matching or higher high after the other indicators create sogginess. The negatively-diverged indicators on the weekly chart conspire with the universal neggie d on the daily chart to push the stock lower in the daily time frame. After a few days or week or so of sogginess, price will want to come back up again for another high because the MACD still has gas in the tank.

That said, there is a special circumstance. The universal neggie d on the weekly chart will begin a multi-week downslide but due to this being an out of control momentum stock, this downside now initiated by the universal neggie d on the daily and partial neggie d on the weekly, may be the top. The MACD may begin falling from its greatly elevated level and not place neggie d. Thus, a multi-week downslide is on the come for NVDA but you have to keep watching the weekly chart develop to see if the top is now or say, in a couple weeks.

The ADX on the weekly chart remains in a strong upside trend as per the pink box for the last 15 months, however, the red line shows that the strength of the trend is waning. The Aroon is comical like the daily chart. There are no bears on NVDA. Everyone is bullish including the doorman, taxi cab driver, Uber driver, shoeshine boy and even the computer programmer that is about to lose his job going forward.

The volume candles show a big distribution week in April where the smart money was starting to bow out and hand their shares over to the dumb money that will hold the bag, but the earnings release catapulted the stock higher yet again. Note that the joyous bullish buying was stronger before April than now.

Price is extended above the moving average ribbon so a mean reversion lower is needed on the weekly chart. The upper band is violated so the middle band, that is also the 20-wk MA at 94, and rising, is on the table as well as the lower band at 60. 

The thin orange lines show the 2-leg bull flag patterns at play. First, there is the move from 11 to 50, that is 39 points, then the sideways consolidation with a downward bias, the flag, or pennant if you prefer, then the second leg begins at 40 so the upside target is 79 and was easily attained. Another bull flag runs from 40 to 95, that is 55 points, and then consolidation and the second leg begins at 75 so 130 is the upside target. Bingo, that is achieved satisfying the pattern. That pattern can also be looked at as gong from 50 to 95, that is 45 diff, so the target was 120 also achieved.

So what does all that fancy mumbo-jumbo mean? NVDA should drop for a few days forward but then return for another matching high about 1 to 2 weeks out. At that time, the MACD will likely go neggie d and the top can be called on the weekly basis. NVIDIA will then begin the multi-week slide lower. The other scenario would be for price to head lower now and folks begin panicking which will kick-in the multi-week downslide faster.

Keystone does not hold NVDA long or short currently. If it is played going forward it would be on the short side. The only thing that can save it is more hype from Jensen at NVIDIA or from tech analysts, or news that further boosts the overall AI hype. Barring that, it is time to get ready for the multi-week slide lower. Right now, Jensen is in the back room spray painting a small cardboard box black; he plans to hold it in the air and tell everyone it is the newest AI chip available. People are stupid; they will buy into it. Stupid Girl. This information is for educational and entertainment purposes only. Do not invest based on anything you read or view here. Consult your financial advisor before making any investment decision.

Note Added Saturday, 6/22/24: NVDA continues lower for a second day to 126 receiving the spankdown from the neggie d on the daily chart. The weekly chart shows the long and strong MACD line while all the other chart indicators, including the histo, are in neggie d (topped-out). Thus, NVDA may need a jog move to get the MACD to go neggie d (down for a few days or week, then up for a few days or week for a matching or higher price high while all the chart indicators, including the MACD are neggie d, so you can call the top in NVIDIA on the weekly basis, and a multi-week down move will begin in earnest (or may be underway already if the sentiment turns negative fast). Quick, Jensen needs a new prop to keep the AI hype alive. He is spray painting a small cardboard Amazon delivery box black in the parking lot out back, and plans to call it the new AI chip. Got to keep the party going.

Note Added Tuesday Morning, 6/25/24, at 7:45 AM EST: NVDA soils the sheets for 3 days dropping from the 140.76 peak to 118.11 a -16% mini-crash. A -10% pullback is a correction and a -20% drop is considered a bear market. NVDA is recovering in the pre-market to 120.85 trying to steady the ship. NVIDIA wipes out $430 billion, a half a trillion, in market cap during the 3-day beating. NVDA had gained $2 trillion over the last year so what's a half-bill among friends? Jensen and other executives are selling stock (insider trading) which causes uneasiness and more selling but of course they hide behind the loin cloth of saying the sales were pre-scheduled. Why do they need to sell any stock if they think the sky is the limit going forward for NVIDIA? Oh, probably because they do not think the sky is the limit and they are the ones turning the knobs, er joy-sticks, and pulling the levers. Someone needs to spike the NVDA punchbowl to restart the party. Where's Jensen? Hey, buddy, wave that black cardboard box in the air so people will buy the stock. This is what America's faux free market crony capitalism system has become; a caricature of itself.

Note Added Wednesday Morning, 7/24/24, at 5:10 AM EST: NVDA 122.59. The multi-week downside should begin in earnest at any time forward. The NVDA monthly chart is overbot and in neggie d except for the MACD and histogram. The expectation is for a multi-month move lower for NVIDIA and then it will recover all the way back up again, say in late August or September, for a significant multi-month top. NVDA remains a hot stock with traders willing to buy any dip with both fists. NVDA has held the 118-122 support for almost 2 months so obviously, if it gave way, there will be Hell to pay.

SPX S&P 500 5-Minute and Weekly Charts; S&P 500 (US Stock Market) Prints Above 5,500 for First Time in History; SPX Gains +800% Since 2009 When Federal Reserve Started Printing Money Like Madmen

The SPX prints above 5.5K for the first time in history today, 6/20/24, but then falls on its sword stumbling lower to close the day at 5473.

The long-term chart shows the last 15 years of uncontrolled money-printing and fiscal largess so obscene it would make Caligula blush. That is crony capitalism on full display. Just think, the soulless people that ran government and the Federal Reserve for the last 15 years, every single one of them, knew that one-half of Americans do not own one single share of stock. They did not care. They spit on the faces of common folks to make themselves, their friends, and the investment bankers they lie in bed with, filthy rich.

These corrupt souls goosed the stock market higher with their bureaucratic powers to feed their own greed and that of their cronies. They gain vast wealth effortlessly, without any real work since they rig the game. They build family and generational wealth with their thumb on the scale. Such is life in crony America. What filth; and stupid people wonder what happened to society. It is fascinating to watch. Cue the drum roll. Eve of Destruction. It's just like the good ole days. 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 2-Hour Chart; Overbot; Negative Divergence; Potential Island Reversal Pattern

The last few days of drama have played out so the SPX is set up for the top again in the 2-hour time frame. She should receive the neggie d spankdown and begin trailing lower now. The SOX and XLK charts are set up the same as the SPX. As she begins to retreat, the daily and weekly charts will tell if the multi-week downslide has begun. There still may be some chop for a few days as the SPX tops out and the Juneteenth holiday on hump day creates more drama (stocks tend to be buoyant and bullish into holidays).

The red lines clearly show universal negative divergence. Price prints a matching and higher high while all the chart indicators are sloping lower and out of gas. There is not even any fumes remaining in the tank so a neggie d spankdown should begin in the 2-hour time frame. Are you ready or are you holdin' a bag?

The green circle shows price on an island after the gap-up move. There is even a palm tree on the island. Thus, an island reversal pattern is on the table where price will fall to 5410, receiving the neggie d spankdown, and then fall completely through that gap to 5375 in a heartbeat. The other path is for price to simply deteriorate lower and fill the gap at 5375-5410. It will be fun to watch.

The noon candlestick just started throwing off the neggie d so let that develop and then check the new candlestick at 2 PM EST to verify that the neggie d remains in place.

You will find out over the next couple hours if the Fed has any other tricks up their sleeves to keep the stock market turd afloat. Everybody on Wall Street says the sky is the limit for stocks going forward. They have been visiting the cannabis dispensary too many times. This information is for educational and entertainment purposes only. Do not invest based on anything you read or view here. Consult your financial advisor before making any investment decision.

Note Added 12:25 PM EST: Speak of the devil, boooiiinnnngg. Rocket launch! The SPX catapults skyward in one minute to 5453 up 22 points on the day, in a flash, and running higher. Whooopie! Wheeee! The Fed watches the charts and knew that the top was at hand so goosing was in order. What's the news? She will set up again with the top; let her breathe for a little while.

Note Added 12:29 PM EST: The bullish orgy is in full swing. SPX 5459. Bulls are grabbing equities with both fists and buying any stock with a heartbeat. Another stick-save providing more morphine to keep the patient breathing.

Note Added 1:18 PM EST: It was Fed's Harker cooing dovishly catapulting stocks higher to save the day. SPX 5467. 

Note Added 2:32 PM EST: Traders are carrying around Harker on their shoulders while throwing confetti and singing 'for he's a jolly good fellow'. It is comical. The SPX rocket launches 54 points, +1%, to 5485. Investors are tripping over each other to buy stocks at the ask chasing the rally. Mission accomplished. They probably want to keep stocks elevated into the hump day holiday, so she will set up later this week and next week again. You would think the Fed would be okay to see the frothy stock market pullback -10% or -15%. Why not? The wealthy elite and upper middle class that own stocks are the ones keeping the economy afloat with their spending.