CRWD CrowdStrike Daily Chart; Oversold; Positive Divergence Developing; Potential H&S; Potential Island Reversal; Gap

CrowdStrike is another hotshot stock nowadays. It is a company with its head in the cloud and everyone says it is the best thing since sliced bread. Barron's calls it a top pick. Pause for laughter. Keystone has heard many folks repeat the same story over the years that they followed some of the so-called Barron's tips only to lose their shirts. Barron's is a fade.

CRWD has ran to the moon like other tech stocks; the employees walk proudly in their fleece sweaters sporting the company logo. Price pulled back to a bottom at Labor Day and then off to the races higher again with the buy the dip crowd tripping over each other to buy Crowd. Boom. The orgy gets wild as price gaps-up from 450-ish to 470-ish. If you went to the can, or stopped at the break room for a cup of coffee, by the time you returned to your desk, CrowdStrike was 20 bucks higher. The bulls got even more excited jamming price to the record top at 565-ish in an orgy so obscene it would make Caligula blush.

But alas, all party's end, and the orgy was over due to the negative divergence (red lines). Price prints the record high but all the chart indicators are sloping down, negatively diverging away from price that is moving higher. The neggie d is always correct and voila, price receives the spankdown in the daily time frame.

When price gapped-up to 470, it remains above, thus, it is on an island above 470, with a coconut tree. Keith Richards fell out of a coconut tree. Respectable. That's rock 'n roll. All gaps get filled eventually. Thus, mathematicians say thus a lot, that is why Keystone did not receive an invitation to the fun New Year's party Three Doors Down, price will either drift lower to fill the gap at 450-470, or, price will collapse from 470 to 450 in a heartbeat, gapping-down, thereby creating an island reversal pattern. You can watch to see which scenario plays out. The bulls want to delay either outcome by sending price sideways.

The potential head and shoulders (H&S) pattern has a head at 560 and neckline at 470-ish. If you drill down closely, you can see that the armpit touches are more like 476-ish, exactly where price is now. It is deciding if it can bounce, or if it will die and allow the H&S to play out. The distance from neck to head is 85 to 90 points so a collapse through 470-476 would target 380-390. You can play around with the numbers.

So all that mumbo-jumbo above is the backdrop to CrowdStrike's drama. What is the path ahead? The weekly chart is weak so more lows would be expected going forward on the weekly basis that means that the H&S will play out over the weeks ahead. However, the daily chart above is trying to set up with positive divergence to allow a relief rally for a few days or week or two first. CRWD is trying to hold the line at 470-476 with all its might.

The problem is that possie d cannot set up unless price makes a lower low and that would mean it would have to drop below the 470 neckline. CrowdStrike may be putting off the inevitable with the sideways stutter the last couple weeks. It is likely time to take the medicine. The expectation is for weaker prices going forward this year. The weekly chart wants some more downside but the monthly chart is also nothing to write home about and this is likely a stock that you do not want to own for the long-term, despite what every analyst and television pundit tells you. Keystone is not long or short CRWD and has never played it.

Day traders can watch the above set-up description and play the possie d on the daily for a quick upside trade, when it sets up, that would be risky and require nimbleness. There are better trades to play. This information is for educational and entertainment purposes only. Do not invest based on anything you read or view here. Consult your financial advisor before making any investment decision.

Note Added Saturday, 1/3/26: CRWD drops to 453 with a low at 449. The neckline of the H&S is lost so the downside target of sub 400 is in play. Since price filled the gap, it is a simple gap-fill and not an island reversal.

APP Applovin Weekly Chart; Overbot; Rising Wedge; Negative Divergence; Applovin Will Not Feel Any Lovin'

Keystone does not know Applovin from Shinola but by the looks of the APP weekly chart, it is a piece of crap that has started to receive a neggie d spankdown. The multi-week pullback has started and price should next fall below the bottom rising wedge line. Rising wedges are bearish and the drop out of the wedge can be quite dramatic sometimes.

Applovin is a mobile technology stock involved in advertising or some such rot. It is just another tech company where the employees are all young men with short haircuts walking around in fleece vests that sport the company logo. In a slow economy, the first thing cut is the advertising budgets.

The blue line show a textbook diamond continuation pattern that no one noticed. It resolved with higher prices after it exited the diamond in July. When APP peaked in late September, the MACD was still long and strong. Price was kicked lower due to the negative divergence with the other chart indicators but the MACD had enough juice to help price recover for one more high on the weekly basis and voila, APP comes up again for the high last week, and the MACD goes neggie d joining all other indicators. She's cooked on the weekly basis. Stick a fork in it.

The money flow is also showing lower lows so this metric wants to see further weakness even if price is buoyed for a few days or week or so. Look how the volume deteriorated all year long.

Applovin, you will need some lovin' after you are taken to the shed out back behind the garage and beaten like a rented mule. The name always sounded odd because the memory is triggered with some kind of 'lovin' thing then you remember 'McLovin'. Nerdy McLovin is the hero. McLovin's two little screams during the scuffle in the kitchen are priceless.

The APP stock is referred to as unstoppable. According to the neggie d on the chart above, plain as the nose on your face, that would be an incorrect statement. APP is very stoppable and it has already started to receive its neggie d spankdown on the weekly basis. Run for your life especially if long and if you made a lot of money. If you entered it recently, get out because you will lose your shirt. Keystone is not long or short APP and has never played it; the only position to consider is short going forward for the next few weeks.

The APP daily chart went neggie d and that joins the negativity above to create the multi-week smack down expected going forward. Money flow, stochastics and the histogram are all making lower lows on the daily chart and the RSI and MACD line are about to follow suit that means a lot more downside ahead. This stock is a turd. If you remain in Applovin, you are the bagholder.

If you rode the stock from 50 to 700 or from 100 to 700, be happy and move on. It will be several weeks before it rights itself. Do not dilly-dally because price may take a wicked quick fall from that rising red wedge. Pretty and talented artist Jenny Lewis is about to get wicked. She is lying on her bed. Halleluiah. Red Bull & Hennessey. 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, 1/3/26: Applovin places its head in the oven collapsing -8.2% on Friday to 618 with a LOD at 610. Applovin is feeling no lovin' from Jenny. The rats are scurrying from the aft of the sinking APP ship.

SPX S&P 500 Daily Chart; All-Time High 6945.77 on 12/26/25; All-Time Closing High 6932.05 on 12/24/25; Wall Street Analysts Predict SPX 7100-8100 in 2026; Overbot; Negative Divergence; Upper Band Violation; Price Extended; Trip Top?

The Santa orgy continues. Ho, ho, ho's. The Santa rally runs from Christmas Eve through the first couple trading days of the new year. Two days of the Santy rally are under our belts, the belts that are now loosened a couple notches from all the food, cake, pies and candy. It is best to wear pants with an elastic waistline for Thanksgiving and Christmas feasts. Keystone also has pants with plastic-lined pockets so he can take a few drumsticks home. The SPX was up +0.3% on the Eve and flat on Friday so the Santa Claus rally is currently up +0.3% with 5 more trading days to play out. Marginal gains typically occur during this period of the year and that is what most traders and analysts expect.

The first full week of trading for 2026 begins on Monday, 1/5/26, and the US Monthly Jobs Report drops on Friday, 1/9/26. There are 3 trading days remaining in 2025. The 2026 trading year begins on Friday, 1/2/26.

The all-time record high for the SPX (S&P 500 Index; the US stock market) is 6945.77 that printed on Friday, 12/26/25 when Keystone was celebrating the start of the made-up holiday of Kwanzaa wearing a colorful headdress and banging on bongo drums. The party is well underway when the ladies arrive and begin dancing. Kwanzaa is a party every day through New Year's Day; work is overrated. It is time to light the kinara (stop laughing). It is a made-up holiday so you can make-up what ever you want about Kwanzaa. Keystone also gave the servants their Christmas boxes and the day off for Boxing Day but told them not to be even one minute late for work tomorrow morning or they will be docked pay. Merry Christmas. The all-time closing high for the SPX is 6932.05 on 12/24/25, Christmas Eve.

The major topping action continues for the last 4 months at 6500-6900. It is an odd animal. The holiday euphoria, AI hype news, complacency and belief that nothing will go wrong, rate-cut salivating, and rich people continuing to spend money, maintain the stock market highs and create the all-time record highs that bookend Christmas.

Triple tops do not exist. That is an old saying in the stock market. It means that price will continue higher from the third peak, rewarding the bulls, and thereby nullifying the trip top. Is it true? The SPX prints a trip top now. There were three H&S patterns trying to form since October but the happy talk negates those fledgling head and shoulders patterns. Then it was a double-top or M-top with the two peaks you see, but price begins a rally into Christmas that starts to display the triple top.

The jolly price action at Christmastime shows why triple tops do not exist (price is punching higher). But will it continue? Price tags the upper standard deviation band and that may be the key reason price wanted to poke up a bit higher and deliver record highs into the Christmas stockings. Keystone received coal in his Christmas stocking hanging on the mantle. There was also a gum wrapper, cigarette butt, and a white hairy lint thing that may have been picked from Santa's beard, verifying Keystone's naughtiness and low opinion of his behavior in 2025.

The middle band at 6848, and rising, and the lower band at 6748, are on the table as potential downside targets going forward. We will know in only a day or two if the trip top holds, or not. Over the years, Keystone has found that about one-half the time the trip top holds and about one-half the time it does not. Price is extended above the moving average ribbon so a mean reversion lower is needed.

Remember the bounce in November off the 100-day MA and horizontal price support? The 100-day MA at 6671, moving higher, is important going forward. Ditto the support at the 20-day MA at 6848 (same as middle band) and the 50-day MA at 6790. Of course, the 6550 level is for all the marbles. Once that fails, it is over for the stock market.

The ADX shows that the last strong trend higher for the US stock market was July. That petered out in August and has trailed lower ever since despite record highs. As Billy wrote in Hamlet, "Something is rotten in the state of Denmark." There are lots of gaps (orange) that need filled down below. 

The red lines clearly show negative divergence for all the chart indicators as price makes the higher highs. A neggie d spankdown is expected going forward. It is comical that each time the negativity kicks into gear, the AI hype and rate-cut happy talk saves the day, along with the Federal Reserve holding its jackboot on the throat of volatility to make sure stocks remain buoyant.

The weekly chart remains in negative divergence. It is ugly stuff and yet stocks float higher and higher in my beautiful bubble balloon. Up, Up and Away. Everyone is riding stocks higher in that big beautiful balloon. Wheee! Whoopie! We can fly!! Wheeee! La, la, la. Irving Fisher's ghost appears from 1929 announcing that the SPX 6900 level will serve as a permanent plateau and stocks will never drop below there again. Love is waiting in my big beautiful stock balloon, join us, come on now, one and all, invest your life savings in stocks as the investment houses sneak out the back door.

The PE is running at about 23 and with earnings at 300 that gives SPX 6900. The Wall Street hot-shot analysts and strategists are out with their 2026 predictions calling for the S&P 500 to end the year between 7100-8100. Of course it is all upside because the investment houses want your money and it is more attractive to be bullish to attract investors rather than being a Gloomy Gus. It is the way the crony capitalism filth game is played. The average prediction for next year by the hot-shot analysts and strategists is SPX 7650. That represents an expected +11% gain in stocks for 2026.

Since the PE is at nosebleed levels, the earnings will have to go up that means the rich will have to keep spending to keep the US turd afloat even after they blew their wad on Christmas and holiday gifts. Do you think that is logical? With the PE at 23, and a target at 7650, that means earnings will be 333 or an +11% gain in earnings in 2026.

If the PE drops back to a more normal 18 and say earnings hang in there, or leak a bit, say 290, that would place the SPX down at 5220. That sounds like a good number. Keystone's prediction for the end of 2026 is SPX 5220 or lower. Keystone's back is against all of Wall Street as usual, but a speculator lives for the fight. Sounds like a song by Son Volt. Back Against the Wall. Is darkness at your doorstep? Would you recognize it? How will you know?

There are no bears remaining on Wall Street. Everybody and his bro remain euphorically bullish and complacent refusing to believe that anything bad will happen. What, Me Worry? In the mother of all tells for the stock market, notable short-seller Carson Block at Muddy Waters Research has thrown in the towel proclaiming last week on business television that investors should not short the market and instead remain long stocks. That is called complete capitulation. The last remaining bear on Wall Street packs his suitcase and leaves town.

Keystone luckily saw Muddy Waters play a couple years before he passed. Joe Bonamassa did a great tribute with "Tiger in Your Tank" from Red Rocks. They are blues masters. Okay honey, come on over here, it is time to check your oil, and clean your carb.

The holidays are fun and enlightening. Folks are happy they are making their +10% to +15% in stocks this year but when asked how they felt in the spring when they lost -20% to -30% of their money, the deer in the headlight looks were priceless. What drop? Who? When? Did that happen? Many people do not even realize that the big drop occurred in the stock market this year. The ones that did, quickly said they did not care because it (the stock market) will automatically come back (that it did and then some).

Americans are trained to think that way but we are becoming a nation of old folks. When the population was running higher rapidly and productivity gaining, the sky was the limit for stocks. Going forward, the older folks with all the wealth in the stock market will exit stage right to pay their increasing health bills and to support their kids that cannot support themselves in this new America. The young barista with massive college debt is not socking away a thousand or more bucks per month into the stock market. Today's vibe is a lot like the 1970's the last time the split between rich and poor was at a super wide level. The US is the land of the have's and have-not's. That is not going to go on forever, kiddo's.

You can keep watching the Santa rally and see how it stacks up through Monday, 1/5/26. You can watch the trip top to see if it is a triple top, or not. You can watch to see if the neggie d spankdown kicks into gear. There will be lots of excitement ahead. The charts are sick but the happy talk is enough to keep putting off the inevitable.

The January barometers will be watched where the first week in January usually tells you how the month plays out and the month of January typically tells you how the year will play out. These metrics are not of much use but people will watch and comment on them. 

It is time for the end of year montages showing all the key events of 2025. Of course, there will be the funeral montage, with touching sentimental piano music in the background, displaying all the people that croaked this year. The Cure just lost band member Perry Bamonte at 65 years young. All you can do when old, is sit and look at the photographs, and remember the memories. Pictures of You. 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, 12/30/25, at 2:56 AM EST: The SPX drops -0.4% to 6905 so the triple top remains in play. Is there no such thing as a triple top? The Santa Claus rally that runs from Christmas Eve through the first 2 days of the new year is now a smidge negative with 4 more trading days to play out. Let's pull a better number off the charts. At the start of the Santy rally on Christmas Eve, the SPX was 6909. Now it is 6905, so a drunken Santa stumbles losing 4 points so far for his once per year rally; call it a smidgeon negative with 4 trading days ahead for jolly St Nick to redeem himself..

NVDA NVIDIA Monthly Chart; Overbot; Rising Wedge; Negative Divergence; Upper Band Violation; Price Extended; Bubbleicious

Sweet NVIDIA, the AI chip phenom, we hardly knew ye. It was fun while it lasted, honey. What an impressive run from one buck in 2016 to two hundo this year a +20,000% gain. Investing $10K in NVDA back in 2016, trusting in Jensen that wears a black leather jacket instead of fleece, would have given you $2 million dollars today. That is enough to sing a Johnny Paycheck song. Take This Job and Shove It. Even a grand to NVDA a decade ago would have put over $200K in your pocket now. Alas, all good things must come to an end.

The AI hype is going strong. Everybody and his brother wants in on the action. The Uber driver and doorman at the hotel both placed their entire paychecks into NVDA stock last week. The people on television say you cannot go wrong (as they pump and dump). The Blackwell chips are flying off the shelves faster than doughnuts at a Weight-Watchers convention. Lying communist China says they will buy the orphan H200 chips. The Rubin chip is on the way and it runs hot like the others so you can heat a Reuben sandwich on top.

Keystone previously posted the NVDA weekly chart describing the November neggie d top. Here is the link. NVDA continued lower but it really has been sideways for the last month. NVDA was goosed last week on the daily and weekly charts by the news of a licensing deal with chip startup Groq (not Grok). Analysts proclaim that the deal increases NVIDIA's dominance in AI. Dominance? Sounds kinky. Who's on top? All that the deal means is that there is another company wanting to join the AI financial circle jerk. Ante up.

The charts incorporate all information known, and even unknown since price and volume do not lie, about a ticker or index at any given time. The only savior for NVIDIA now would be some type of super positive news that can give it some life for a few more months. Barring that, NVDA is in trouble and topped-out on a monthly basis. This means that a multi-month down move will begin any time forward so 2026 will be a far sh*ttier year for NVIDIA than anyone expects.

Let's dissect the chart above. No not like a frog. Do they still dissect frogs in high school? Probably not since everything is baby-fied these days. Many decades ago, in 10th grade, we were split in groups of five that circled around each lab table. The frog, smelling of formaldehyde, was stretched out in front of us ready for a brave student to begin the cutting and examination of organs. We did not wear gloves. The girls were squeamish so Keystone gladly handled the scalpel wanting to look macho for pretty Vanessa that was luckily in his group.

Anyhoo, the chart is ugly. It displays overbot RSI and stochastics agreeable to a pullback on the monthly basis. The rising red wedge pattern is bearish. The upper standard deviation band is violated so a trip to the middle band at 143, and rising, and even lower band at 83, and rising, are on the table for the months ahead. Price is extended above the moving average ribbon desperately needing a mean reversion lower.

The red lines show the negative divergence sealing the fate of NVDA on the monthly basis. The current candlestick is December, with only 3 trading days remaining in the year, so it will be cast in concrete on Wednesday. That Wednesday chick is real popular nowadays with the teeny-bopper crowd. Great to see them grooving on an old Cramps song, Goo Goo Muck. So watch the chart closely next Friday as 2026 trading begins and the following week when a new monthly candlestick will be underway. You can check to make sure the neggie d remains in play as does the top for NVDA on the monthly basis.

The down candlestick in red is November and if you go back one more it is the October top. Price makes the matching high but note the MACD line that also made a higher high; it was still long and strong and wanted to see another matching or higher high in price ahead. Typically, this behavior needs a jog move (down one month up the next) to set the chart up with universal neggie d across all indicators including the MACD line that means the stock is toast.

So price oscillates in November and makes the matching high so the indicators can be checked again to see if the MACD line is negatively diverging away from price (sloping down). That tiny red line shows that it is. Stick a fork in it. It's cooked. All the indicators are neggie d as price made the new high. The only thing that can save it is super happy talk. The announcement the other day created joy but will it be enough to goose price far higher. It already seems like that happy talk is priced-in.

The Aroon shows that nearly all the NVDA bulls continue to believe that the stock will go up forever, and comically 100% of the NVDA bears believe that the stock will go up forever. Everyone is partying on one side of the boat scoffing down Blackwell and Rubin chips but guests are starting to complain that their mouth is burning because the chips are too hot. Oh no, someone just chipped their tooth on the H200 chip that should have not been in that bowl to begin with since it is stale.

Lots of fun is ahead for NVDA that is topped-out on the long-term monthly basis and beginning a multi-month spankdown barring any super-duper happy talk in the days ahead. Plan accordingly if you own it or if you made all that dough on the way up. Keystone is not holding NVDA long or short right now and has no plans to play it. The charts will be watched to see if a shorting opportunity presents itself on the hourly and daily charts. Sorry to report the bad news, sweet NVIDIA. We hardly knew ye. 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, 12/30/25, at 3:10 AM EST: NVDA is at 188.22 coming down yesterday to tap on the 50-day MA support at 186.19; this is important support that must hold for the bulls going forward. Bring up a NVDA weekly chart and show the standard deviation lines. Wow. The bands have come in super-tight. Get the popcorn ready. A huge move, on the weekly basis, is about to begin and likely run for the next month or two. The tight bands squeeze price wildly in one direction or the other and only predict a large magnitude move but do not predict direction. Bulls better hope that Jensen has some great news this week like a new chip after Rubin, or something else spectacular, to make the move higher out of the tight bands. Barring that happy talk scenario occurring, NVIDIA may have a religious experience at the start of 2026 (huge pullback on the weekly basis). Simply watch the tight bands and see which way price starts to run, on the weekly basis. The two prior weeks hint that the move may explode higher, but this week that joy fizzles slightly as price stutters at 188. Bulls likely win and huge gains higher are ahead if price moves above 197-200. Bears likely win and will bludgeon the stock if price falls below 167. It is a cage match. Two enter but only one will exit. It is 197 versus 167 with price beginning at 188. Let the festivities begin.

Note Added Saturday, 1/3/26: NVDA 188. The cage match for al the marbles continues. The crowd grows larger with the bulls holding up green 197 signs and the bears holding up red 167 signs.

The Federal Reserve Follies and Fed Chairman Candidate Contestant Reality Television Show

By K E Stone (Keystone)

King Donnie continues his search for the next Federal Reserve chairman. Call it the Federal Reserve follies for the last half-year and more. Every day Donnie must deliver a new episode for his reality television show presidency. That is why he opens 52 boxes at once, like a little rich kid, so there are plenty of side plots and action so the camera can be shined on his orange head every day sometimes several times per day.

One of the key subplots in the Donnie tv show is the search for the new Federal Reserve chairman. Chairman Powell's term expires on 5/15/26 so he is a short-timer now with only about four months and change remaining in his tenure. Trump puffs his chest and bloviates this year that he wanted Powell out of office immediately because he would not lower rates fast enough to goose the economy and stock market with easy money.

Trump is a real estate guy; he loves debt. Donnie does not care about the potential for steady, or increasing, inflation due to easy monetary conditions; it is all about the short-term and here and now. The mid-term elections are in November when the people typically flip control of either the House or Senate to the other corrupt political party. Trump wants lower rates now since it will take time to filter into the economy to make everyone happy when they walk to the voting booth in only 10 months. If the economy is not picking up, with lower inflation, with plenty of jobs, by July 4th Independence Day, when Donnie will be leading the country with the 250th celebrations, the retrumplicans will be in trouble. Will anyone be in a festive mood?

Trump promised to bring prices down on day one of his presidency that is another failed goal like ending the Ukraine War in 24 hours. He knew it was campaign lies but they worked since he got elected. They all lie so it makes no difference. The orange head can cover himself with a loin cloth bragging that a dozen eggs are cheaper and oil/gasoline prices have dropped, but what else ya got? People cannot afford to live as Donnie jet sets around the world making deals for himself and grifter family.

That is likely why he kisses Dictator Putin's dupa daily because he knows the war will eventually end and he wants the Trump family grift to be in Russia after that for decades to come handling multi-billion real estate ventures. Russia is a huge land mass. Donnie likely figures it will be a legacy to his family and the Trump name while common American citizens are riding in the back of his bus.

Anyhoo, back to the Fed, hey stupid people, did you wonder why there are only five candidates for the Fed chairman follies? That is a thin group that Trump has to pick from but there are many highly-qualified people that would like to, and could, serve as chairman but want no part of the daily Donnie prima donna drama. Prima Donnie. That is funny.

The five names on the Fed chairman list are Fed Governor Christopher Waller, Fed Vice Chair Michelle Bowman, former Fed Governor Kevin Warsh, National Economic Council Director Kevin Hassett and BlackRock Manager Rick Rieder. Bowman lives up to her namesake and bows-out so then there were four. What silliness. While the candidate contestant tv drama continues, Trump throws in a plot-twist, and makes it clear that he wants Treasury Secretary Scott Bessent as chairman. The spectacle is a joke and only orchestrated to keep the American people watching the presidential television reality show, and especially the orange head, daily.

Bessent has made it clear that he does not want the chairman job. Of course he does not. It is stupid to expect him to take the job. By refusing, Bessent also makes it clear that he is moving on from the Trump administration after the November election. Bessent is looking at things from the perspective that he will serve another year and then he is ditching the Whitehouse popsicle stand. A treasury secretary serves at the pleasure of the president so Bessent could leave tomorrow or anytime; it is not a term position. He has freedom on when to quit.

The Federal Reserve chairman job is a four-year gig. Use your common sense. Why would Bessent sign-up and commit his life for four years to argue with a bunch of academics sitting around a conference room table? Bessent will be gone this time next year and likely start-up another hedge fund and immediately bring in hundreds of millions of dollars. What path do you think he is going to take? And Donnie is a lame-duck with only three years remaining (Bessent would still be stuck in the chairman job for another year after that).

Kevin Hassett is the inside man, literally, at the Whitehouse each day orange-nosing (versus brown-nosing) the president. He has giddy-up in his step the last couple months beaming with pride that it appears he is Donnie's top choice for Federal Reserve chairman. Over the last couple weeks, however, Trump appears a bit more hesitant, so additional meetings are scheduled with the other remaining candidates.

Despite Hassett's prior experience at the Fed, and his economics and markets experience no one can take away, he is perceived as a kiss-*ss that will do whatever his master King Donnie tells him to do. Trump is doing a great job at destroying Federal Reserve credibility. Hassett now becomes a tricky choice since he will be immediately perceived as Trump's little lackey.

So the prima donna Donnie drama silliness continues. Creating more television drama, Trump proclaims just before Christmas that anyone that disagrees with him will not head the Federal Reserve. King Donnie declares that Powell is a "numbskull" and a "major loser." Trump is an 80-year old child. It is funny to watch. Which candidate will sell their soul to be Donnie's little b*tch for the next three years?

Waller was Trump's initial focus and pick but Donnie changes his mind like a teenage girl changes her outfits. Waller wanted lower rates a couple-three months ago but has since tamed that view so that does not fit the Donnie Trump pedal to the metal lower for rates scenario he wants to play out ahead; inflation be damned.

Rick Rieder is a funny selection. He is a bigtime Wall Street guy that does not plan to be Donnie's little boy for the next three years of his life. Rieder likely stayed in the game to increase his name recognition and receive free publicity for BlackRock. The interesting sidebar is that Rieder was invited to the Whitehouse, in the days ahead, and that was before Trump basically saying that whoever he picks is going to be his little b*tch, so will Rieder even show up to the meeting after that comment? If so, we can call him subservient Rick.

Then there is Kevin Warsh. He championed common sense 15 years ago, like many of us, when it was the last chance to save the crony capitalism system, but does he sing from a different hymn sheet these days? Dovishness and Warsh do not seem to go together since he was more on the fiscal hawk side. Maybe he changed over the years? Did he? Maybe he has a continued lust for power and wants to get back into the game again even if he has to play submissive to Donnie Trump? It is interesting.

Or is Warsh sly like a fox telling King Donnie what he wants to hear to get the gig, and then simply doing what he thinks is best for the country when he is the new chairman, be it lowering, or even raising rates? Once he started a four-year term, it would be difficult for Trump to oust him (there has to be cause like an actual criminal offense). Warsh is the interesting and mysterious candidate, perhaps a Manchurian Candidate, but his game may be for good and wanting to get into the key position to help rebuild America's fiscal house the right way, not the Donnie way? It was strange when Warsh's name was announced as a candidate since he does not fit that typical kiss-*ss mold.

Trump is no dummie and he can read people well. That is why he wants to talk to these folks in person to feel the vibe. Trump will likely not trust Warsh and not pick him. Hassett is the kiss-*ss that starts with zero credibility as chairman if he is selected. There is no one remaining folks. It is a matter of whether Donnie will trust Waller to perform his bidding and that will likely not be the case. Waller is a smart economics and markets guy and will not want to toss his reputation in the trash can dirtying it up as Trump's errand boy. After it is said and done, Donnie will likely pick Hassett and start a campaign to paint him in an independent light even though everyone knows he is Trump's lackey.

For the country, Warsh and Waller would both be good picks. Hassett is compromised, Bessent already plans to fly the coop by this time next year, and Rieder simply likes the notoriety and will be able to charge more for speaking fees in the future. This is the picture of America's crony capitalism system, folks. It is what it is.

Chairman Powell's term as chairman ends 5/15/26 but he can remain a Fed board member until January 2028 when that term expires. He will not. Dollars to doughnuts that Powell will be out that door so fast in May all you will see is the swinging screen door.

The next FOMC meeting days that may provide changes to the rates are 1/28/26 (a month away), 3/18/26, 4/29/26 and 6/17/26. Thus, Powell will have his farewell speech ready to go for the late April meeting that will be his send-off after eight years (two four-year terms) in the top job. The new Fed chairman will conduct the first meeting in mid-June. The economy will already be on its path by then, good or bad, and will impact voter decisions in the Fall.

The Fed follies have been a ridiculous show of Donnie Trump stagecraft, showmanship and theater. Isn't it sickening? Do you waste your life following such dribble? In the summertime, Trump and Bessent proclaim that a new Fed chair will be named before September to put pressure on Powell to cut rates. Then instead of September, the new pick for chairman will be announced in the Fall, then it was by Thanksgiving, then before Christmas, then by the end of the year, do you suckers follow this daily dribble and trash?, if so, God Bless you, and the latest is that the pick for the new Fed chairman will be announced after the first of the year. This is likely a lie, too, since Trump still has to conduct the interviews. It is hard to keep the lies straight and once someone starts lying in life, it is difficult for them to stop.

Trump calls the Fed chairman "Too-Late" Powell because Donnie believes that he is lowering rates too slowly and is late to the game in stimulating the economy (an economy that Trump brags about claiming it is the best ever and the stock market is at record highs; if so, why do you need the cuts, Jack?). Donnie is "Two-Week" Trump. Every answer to a question is that he will have a response and information in two weeks but that deadline is never met. Such is Trumpworld, a circus like Wally World.

More fun will begin soon. When Trump knights the candidate be it Hassett, Waller or Warsh, will King Donnie then apply more pressure to Powell to have him quit immediately and allow the new chairman to takeover? Powell is not going anywhere. The crony capitalism filth system degrades society into a 'what have you done for me lately' mentality. It is disrespectful to ask Powell to leave a couple months before his eight-year term ends. Powell is a reserved man but no doubt he wishes he could tell Trump where he could put his calls for resignation.

So the Federal Reserve follies, the chairman candidate contestant reality television show, is coming to the season-ending finale. It is likely a pick between Hassett and Waller, or if a new candidate surfaces that would be par for the course in the Hall of Mirrors in Trump World. The prima donna Donnie drama continues with Two-Week Trump hassling Too-Late Powell for a few more months.

The orange head will likely not pick the new chairman before the FOMC rate meeting at the end of January, so the next deadline by Two-Week Trump will be that he will announce the new Fed chairman in February. It is actually getting close now to making a mandatory decision about the chairman job because a couple-three months are needed to allow for a smooth transition. Can't Believe We're Here. Not sure what the point is.

Note Added Tuesday, 12/30/25: King Donnie attacks Chairman Powell again from his Mar-a-Lago resort calling the Fed chairman "incompetent" repeatedly. Donnie is always the little tough guy with words. The orange-headed bloviating carnival clown proclaims that he will bring a "gross incompetence" lawsuit against Powell to get him out of office. In the next breath he says, "I would love to fire him, but we're so close." In other words the idiot says he is bringing a lawsuit and in the next breath says time is short for Powell so he may as well wait for his term to end to install a new chairman. Trumpski is a confused old man that loves to bloviate. Here is the Yahoo Finance link where you can listen to the confused King Donnie. Obviously, he is setting up Powell as the scapegoat for when the economy and markets fall apart. Trumpski will 100% blame Powell for any downturn in the economy after he will claim that the economy was the best in history following his edicts. The Fed drama also provides filler, a sub plot, for the presidential reality television show. On a slow news day, Hollywood Donnie can bloviate about the Fed to gain attention and create the need for the cameras to videotape his orange head and broadcast his words. Adoration is Donnie's daily fuel. All you can do is mock and laugh at the mess. It is crony capitalism filth in its final stage. Continue hoping and praying that King Donnie does not get us into World War III and/or Great Depression II but the odds are high that he is stumbling that way working on a twofer.

SILVER Daily and Weekly Charts; Parabolic Rise in Silver

Silver and gold, silver and gold, everyone wishes for silver and gold, as Burl would sing. Republican Speaker Johnson is feeling heat for not bringing up bills in the House and instead simply acting as King Donnie's errand boy. The House may be looking for a new leader in the new year and Mikey may have to return to his role as Hermie, the elf that wanted to be a dentist, in that Rudolph the Red-Nosed Reindeer Christmas classic (see below).

Anyhoo, silver is a big-time story this year receiving greatness due to its basic, as well as aesthetic, uses. The AI hype and green technology such as EV's fuel the rise as well as the holidays and if a man did not gift his honey a silver bracelet yesterday for Christmas, he is now sleeping in the garage. The daily chart shows the radical rise in silver in recent months and the weekly chart displays the parabolic thrust higher into the stratosphere. Congratulations to all the silver bulls that held onto the PM's believing in the longer term story.

Alas, what goes up, must come down, and what goes up parabolically, comes down just as sharp. The question is when does the over-hyped euphoric orgy top end? The red lines show the daily chart pretty-much cooked with negative divergence. The RSI and stochastics are also overbot agreeable to a pullback. The Aroon verifies the out of control bullishness with 100% of the bulls believing that silver will continue going up forever and comically, nearly 100% of the silver bears also believe that silver will go up forever.

The MACD line continues higher but it is in such nosebleed levels, like the seats Keystone buys for sporting events, so there is nowhere to go but down. The air is so rarified way up there in peanut heaven that you have to bring an oxygen tank. The coup de grace is the doji candlestick from the Eve of Christmas, a spinning top, that can identify a trend change.

Price is also running up the upper standard deviation band and needs a correction back to the middle band, at 62 and rising sharply, and lower band at 52 and rising. That is a big congestion zone at 45-55 bookending the 50 level. That hints that it may be a better home for silver as the months play out. Keep watching the chart to see how it develops. Obviously, if you enjoyed huge profits, you have to start thinking about exiting stage right.

The weekly chart is a slightly different picture. Remember, trading is like multi-dimensional chess only time is the dimension not space. The red lines show silver price topping out on the weekly chart but not quite there yet. Price is making the higher highs, record highs, now even higher in real-time, and the RSI sneaks-out a higher high; it is long and strong wanting to see one more high on the weekly basis. Ditto the MACD, histogram and ROC. They do not want the bullish party to end.

The stochastics are neggie d and overbot. The RSI is overbot agreeable to a pullback based on this metric. The MACD on the weekly is at nosebleed levels, where Keystone cannot find a bag of peanuts since the vendors become dizzy at such a high altitude near the cheap seats, and refuse to climb the stairs. These indicators are bearish and indicate the top is near on the weekly basis, probably a week or two away.

So the daily is agreeable to a pullback now but the weekly time frame has a bit more juice. Silver may take its first pullback from the parabolic rise in the days ahead, helped by the negative stochastics on the weekly basis, but that will be short-lived, with price coming back up for another matching price high, say a week or two out, when the weekly chart will be in neggie d so the top can be called on the weekly basis.

The Aroon on the weekly basis indicates every single silver bull and every single silver bear, guarantee that silver will go up forever on the weekly basis (it is a contrarian indicator--the boat is fully loaded on the bull side as would be expected for a parabolic price move).

So taking a guess at the path forward since the charts are not definite right now, silver will likely pullback for a few days, say a week, followed by more upside for a few days, say a week, at that time when the new matching highs are made, say early January or so, the indicators should be in neggie d and the top can be called on the weekly basis. The other outcome is for price to ignore the weakness on the daily chart, for now, and ram price higher to satisfy and burn-out the joy on the weekly chart and create the top over the next couple weeks (without much or a pullback over the next few days).

Keystone is not playing silver long or short but is shorting the gold miners currently. There is no reason to enter silver long or short now. It is best to let the chart play out. You can catch the top on the weekly basis probably in a couple weeks, the weekly chart will tell you when, and you may dip your toe in on the short side limiting the exposure. If you have held silver the last couple years, or even less, and sitting on bags of silver coins, you may consider lightening up the positions. You could scale-out over the next month, say, sell one-fourth of the position each week going forward.

The move is historic. We need Ritchie Blackmore's Rainbow. Man on the Silver Mountain. Lift my spirit higher. Make me Holy again. Dio. 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, 12/27/25: Wowza. Silver explodes another +10% higher yesterday the parabolic phase going straight vertical. It is quite a sight. A frenzy. Some people may be taking profits in stocks and buying gold and silver as a perceived safe bet ahead. The RSI, MACD and ROC poke out new highs on the daily chart, but all are in the stratosphere now with nowhere to go but down, so probably a two-day jog to turn the RSI and ROC neggie d again and then a couple days to do the same for the MACD so the top for the daily chart is likely a couple-four days away delayed due to the happy silver and gold holiday orgy (down-up-down-up for the top on the daily basis). People are buying silver, gold and other precious metals without even looking at any charts. Analysis above remains in play. Simply watch the charts and when negative divergence forms on the daily and/or weekly charts, you can call the top in silver in that respective time frame.

Note Added Sunday, 12/28/25: Wowza. Silver catapults above 80.. Exchanges are starting to increase margin requirements on silver that means they are trying to put a kibosh on the out of control vertical rally. The elite Wall Street cats always change the rules in the middle of the game. It is called crony capitalism filth. With an increase in margin requirements, holders of silver either have to pony up more dough to maintain current positions or sell some silver. New buyers are limited in their purchases as per the new margin requirements. Typically, the power brokers will raise the margin requirements in stages until the desired outcome occurs (a top in silver). The week ahead may be crazy stuff. It is 3 AM, everyone is drunk as skunks, and the silver party is getting busted. The cops are here and telling everyone to go home, the silver party is over. Is it? As the house lights come up, there is always time for one more song. Closing Time by Dan Wilson.

Note Added Sunday, 12/28/25, at 8:00 PM EST: Wowza. Silver pops to 84, and then falls on its sword dropping to 76 now at 77. The wild ride begins. This is historic price action for silver.

Note Added Monday Morning, 12/29/25, at 7:03 AM EST: Silver drops to 74.64. The precious metals are pulling back and the Talk of the Town. Chrissie is perfection fronting The Pretenders. 'Oh, but it's hard to live by the rules, I never could, and still never do'.

Note Added Tuesday Morning, 12/30/25, at 2:49 AM EST: Silver drops to 71-72 and then recovers to 74.36. The MACD line remains long and strong on the weekly chart, in nosebleed territory, so price may need to chop for a week or two as the weekly chart figures out where it wants to top-out at.

Note Added Saturday, 1/3/26: Silver is a roller coaster ride up big the day after Christmas, then down big, then up big, then down big, then flattish, all that drama to end up at 72.25 exactly where it was on Christmas Eve. It ran towards 84 before collapsing. In the week ahead, we find out if it wants to come back up to tag 80 before rolling over on the weekly basis. The MACD line is long and strong, almost vertical, in nosebleed territory, so that may be enough to bring price back up over the coming days, however, it is radically out of bounds and only has one way to go, down. Silver either already topped, or it will in the week ahead, and a multi-week down move will begin. You do not have to guess, simply watch for the neggie d confirmation in the time frame that you are focused.

YC2YR Yield Curve (2-10 Spread) and XLF Financials ETF Weekly Charts; Yield Curve Leads the Banks

The bank orgy continues. It is all about the yield curve; the 2-10 spread. As YC2YR increases, the spreads between the yields widen providing advantages to banks with their lending programs. Banks can make more profits taking advantage of the yield differential.

It is easy to see the 2-10 spread leading the banks around by their nose. The charts show XLF responding to the yield curve with a 1 or 2-week lag. Banksters are drunk as skunks, cheering the blue lines, celebrating the rising yield curve knowing that their bonuses will increase. But the orange lines are denigrated and shouted-down. The crony capitalism filth system has no tolerance for a falling yield curve.

The yield curve bottoms just before Halloween, when Keystone scared the neighborhood children with his face, and he was not wearing a mask, and rises towards Thanksgiving. The banks bottomed in mid-November about a 3-week lag. It is interesting to see the yield curve pop for 3 weeks off the bottom in late October, and then pull back, and the XLF mimics the same pattern, 3 weeks up and then a pullback for a week.

The yield curve continues higher in early December for a couple-three weeks and then rolls over retreating thus far this week with today yet to play out. The XLF rallies this week after the low the previous week so following the pattern, banks should top-out over the next week or two. Simply watch the yield curve for clues on the banks.

The KRE regional banks ETF does not follow the pattern as closely as the XLF that represents the large money-center banks, insurance companies and other financials. This makes sense since the US remains in a housing recession as has been previously explained. The regional banks service the local home mortgage market so the soft housing sector is impacting the KRE more than the XLF. Both are making record highs but the XLF launches far higher with new record highs while the KRE has only just returned to the record high from a year ago.

Pull out your telescope and keep a close eye on the yield curve since it will send the banks one way or the other that then sends the stock market the same way. Land Ho!  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, 12/27/25: The yield curve ends the week at 0.66 with the high at 67 basis points a week ago. If YC2YR comes up to 0.67 and a bit higher printing a new high, the chart indicators on the daily basis should all be neggie d identifying the top on the daily basis. The weekly chart is in negative divergence now and has violated the upper standard deviation band and needs to come down. Thus, the expectation is that the yield curve is topping right now and should begin a multi-week move lower. The 20-week MA is 0.56 and it hugged that line and used it as support for the last 1-1/2 years so when she fails, it will be meaningful. The 50-wk MA is down at 0.47. XLF drops marginally in the Friday trade sitting at 55.62. The two charts above, and KRE, and the money-center bank's individual names (JPM, C, BAC, GS, WFC, MS, etc...), will be a key focus over the coming days and week or two.

Note Added Saturday, 1/3/26: The yield curve receives more upside juice to 71 basis points. The daily chart hints that the yield curve has topped-out for now but the weekly chart is more of a sideways with a slight upward bias posture. In the near-term, a retracement of the yield curve to the 62 to 71 bips range, even down to 57 bips, would be in sync with the banks and stocks pulling back but the yield curve may take on more of a sideways posture going forward on the weekly basis after the weakness in the daily time frame plays out.

SPX S&P 500 Weekly Chart; Hangman

Nothing's changed with the SPX weekly chart. It is in negative divergence with a multi-week down move already started or about to begin. The stock market is a pile of sideways pig slop for the last 3-1/2 months. The chart above shows stocks going nowhere over the last month.

Last week was interesting, however, because of the hangman candlestick. It typically shows up at the top in the stock market or at a top for an individual stock. The long tail shows that the bears are starting to exert a stronger and stronger influence on equities. The euphoric bullishness and complacency continues in the stock market with bears as rare as hen's teeth, but the chart tells you that the bears are becoming stronger.

The hangman falls perfectly in place with a neggie d top so time will tell if the confluence is meaningful. If long the market, you should begin girding your loins. The holidays are in the mix.

The stock market is closed on Thursday for Christmas Day and then on Thursday, 1/1/26, for New Year's Day. The Santa rally is the period from Christmas Eve through the first couple days of the new year so this year the period between 12/24 through 1/2/26. The gain for the Santy rally is typically no biggie only marginal or a percent or two. People are all excited because they are jackasses and do not know what the actual Santa rally is; nowadays, any upside in stocks for December, like this year, is automatically called the Santa rally. People are stupid and that is something you cannot fix.

It will be fun to see if the hangman provided the ominous foreshadowing of what is to come; the executioner pulling back the lever that hangs the US stock market. The Hangman's Song. 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.

Keybot the Quant Turns Bullish

Keystone's trading robot, Keybot the Quant, flips back to the bull side this morning at SPX 6797. Watch utilities, chips and volatility. Nothing else matters. The bears were throwing confetti yesterday but that did not last long. The bull's celebration may not last long either.

Keybot the Quant

WTIC West Texas Intermediate Crude Oil Weekly Chart; Oversold; Falling Wedge; Positive Divergence; Lower Band Violation; Oil Shorts Are Going to Soil Their Shorts

Everybody and his brother are short oil, or earl as they say in Texas. Years ago, Pure Prairie League changed a tire for Merle Haggard to make sure his country-pickin' fingers did not get covered with oil, er earl. I'll Fix Your Flat Tire Merle. The Uber driver said he just went triple-leveraged short oil. The television and internet pundits guarantee that oil has nowhere to go but further down.

King Donnie is holding on to the lower oil prices loin cloth with both of his small hands. Trumpski promised to deliver lower prices on day one and here we are a year later with everything higher except oil that also filters into lower gasoline prices. Food, insurance, electricity and other costs are through the roof so folks are not paying much attention to the gasoline savings. The 300 million have-not's in America are telling the 30 million have's that they cannot afford to live anymore. The high prices are killing them and burying many in even more debt.

Things are about to get very interesting because oil prices are about to rally off the possie d. That tiny loin cloth, it does not have to be that big to cover everything, will be pulled away as oil prices rise exposing an orange sight no one wants to see. The blue falling wedge pattern is bullish. Stochastics are oversold agreeable to a bounce.

The green lines show how price makes lower lows but the chart indicators are now universally sloping higher, positive divergence, so oil is on the launch pad and all fueled-up ready to begin a multi-week rally higher. That will get everyone's attention since everyone is short. Even Father McClean took the money that was allotted for needy children and bot triple-leveraged oil shorts figuring he will be able to buy 3 times as much stuff for the kids (not thinking that he may lose it all and end up with buptkis).

Price is poking at the lower standard deviation band so a move higher to the middle band, that is also the 20-wk MA, at 61, is on the table, and the top band at 66, both dropping sharply. Oil would be expected to bounce anytime and begin a multi-week rally higher. The candlestick so far this week has that long tail. It tells you so far this week it is a bull/bear battle but the oil bulls are winning out so the fuse must be lit and the countdown has started for the rocket launch.

The Aroon red line shows that all the oil bears remain 100% bearish that would be somewhat expected. They are talking their own book. But comically, the green line shows that 100% of the oil bulls also believe that oil will go down in price forever. Talk about a loaded oil tanker to one side. There are zero people on the oil bull side with 100% of everyone on the bear side expecting far more downside ahead with oil prices. You know what is going to happen.

Keystone is not playing oil long or short these days and will likely not play this set up. Lots of derivatives, such as those with commodities, are not behaving themselves as this goofball 3-month major stock market topping formation plays out. Obviously, the play with oil would be on the long side going forward. Once the shorts begin panicking as oil price floats higher, that rocket fuel (short-covering rally) will likely create a big move higher off the bottom and cause King Donnie to lose his 'low oil prices loin cloth'.

The West Texas Intermediate Crude Oil daily chart is the same set-up. Price comes down for a lower low with all the chart indicators possie d and the Aroon verifying the over the top group-think that oil will keep dropping in price. Oil is going to start moving higher, folks, and perhaps a big jump higher as the shorts panic and cover. Plan accordingly. Now would be a good time, if you are running a business heavily dependent on fuel (UPS, FDX, trucking companies, etc...), to think about hedging for higher fuel costs. 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, 12/21/25: West Texas oil drops to 56.55 with a low last week of 54.98. This level held in the springtime when price then catapulted wildly higher into June. The weekly chart is set up nicely with possie d so it sits on the launch pad ready for the countdown and explosion higher. The daily chart is bouncing off the its possie d bottom for the last 3 days and should have plenty of upside juice ahead. The daily chart also exhibits a W-pattern bottom one of the most powerful patterns and stronger if it forms under the 50-day MA and/or 200-day MA. The W forms under both hinting that the upside rally should be strong and for multiple weeks. Of course any geopolitical news and Donnie drama can kick in the upside violently, or prevent the chart's intent from following through, temporarily.

Note Added 12/26/25: WTI oil pops to 58.75 on Christmas Eve delivering coal in the oil short seller's stockings. Oil is hanging in there this morning at 58.38. It may back-check the 20-day MA at 58 on the dot, but the possie d upside is underway in the daily time frame with the likely multi-week upside rally just beginning.

SPX S&P 500 60-Minute Chart with 200 EMA Cross; Battle at SPX 6793 Dictates Bull Versus Bear Market Ahead

The Keystone Speculator's SPX 60-Minute Chart with 200 EMA Cross Indicator is an important VST (very short term) stock market indicator. If the SPX is above the 200 EMA on the 60-minute, stocks are in a bull market and there is nothing but joy ahead.

If, however, price falls below the 200 EMA on the 60-minute, stocks are in a bear market and coming to grips with the sad path ahead. The candlesticks are one-hour so you can see how price pierced the 200 EMA on the SPX 60-minute at 6793, then dropped below. Bears were throwing confetti and celebrating the failure, however, during the last hour, the bulls stage a comeback and the bears were sweeping up the confetti with their hands to put it back in the bag.

The SPX finishes at 68 hundo above the 6793 bull/bear line in the sand. Stocks remain in a bull market but looking at the price action today, the SPX may get flicked into the dirt like a cigarette butt. Watch it closely tomorrow.

If short, you cheer a failure at SPX 6793 and look forward to carnage below. If short, and the SPX remains above 6793, you will soil your shorts.

If long, you are cheering for SPX to keep its head above water at 6793. Very bad things will start to happen if SPX 6793 is lost.

What will happen tomorrow? Will the story be happy, or sad? Or maybe A Whiter Shade of Pale. Keystone must remember to pick up his Nehru jacket at the cleaners tomorrow. 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, 12/17/25, at 11:00 AM EST: The 6793 fails as chips collapse. Don't you love the smell of napalm in the morning? Bring in those air ships, boys. Light it up like a birthday cake. You know, someday this stock market is going to end. SPX LOD thus far 6748.

Note Added Wednesday, 12/17/25, at 11:18 AM EST: The VIX spikes above 17.02 that is bad news. SPX LOD 6742.

Note Added Thursday, 12/18/25, at 12 noon EST: The bear fun did not last long as the furry creatures are running for their lives today. Volatility, chips and utilities jump into the bull camp catapulting the SPX above 6800. The bulls want their Santa Claus rally. Inflation data was tame today so the Fed can focus on jobs and that opens the door to endless rate cuts ahead. The pending rate cuts in the new year, and the QE light that was brought in through the bedroom window, are so obscene they would make Caligula blush. The easy money orgy will send the stock market higher rewarding the wealthy class once again with effortless riches. Such is the crony capitalism filth system. The bulls are in touch with Santy telling him the party rally is back in play. VIX is 16.66. Trip 6's.

Note Added Sunday, 12/21/25: The bull/bear battle last week was at the critical 200 EMA on the SPX 60-minute chart at 6793. The bulls goosed the chips while the Fed put its jackboot on the throat of volatility and voila, it was orgy time; stocks never looked back. Stocks leap higher from the 6793 line in the sand, like a frog jumping off a hot stove, ending the week at 6835 now 42 points above the danger line where stocks will fall apart. As seen in recent price action, 42 points is butpkis. Despite the orgy rally and euphoric joy, stocks are expected to roll over lower. The Christmas holiday is this week on Thursday with the markets closed ditto the following Thursday for the first day of 2026.

Keybot the Quant Turns Bearish

Keystone's proprietary trading robot, Keybot the Quant, flips to the short side this morning at SPX 6788. Watch volatility, utilities, commodities and semiconductors. Everything else is noise.

Keybot the Quant

SOX Semiconductors Weekly Chart; Overbot; Negative Divergence; AI Chips Are the New Tulip Bulbs

The chip stocks are the favorite flavor for the last few years especially as the artificial intelligence hype continues. Tech workers want to keep their jobs so of course they pump the AI narrative promoting the new technology as the greatest thing since sliced bread. It is so great that it has limited to no impact on business over the last 3 years. Huh? The AI chips are the new tulip bulbs. Instead of new vibrant tulip colors to feed the frenzy, it is fancy names such as H200, and Blackwell and Rubin that feed the AI frenzy.

The semiconductors on the main AI stage currently are NVDA, AMD, AVGO and MRVL. NVIDIA is the king of the hill, then AMD, or you can say AMD and AVGO share the second tier. Broadcom is making the Google AI chips so everyone jumped on board as it appears that Google's Gemini platform is edging out the Open AI ChatGPT platform. Marvell trails the other three but it is a notable player in the AI race nonetheless. All four puked their guts out last week with NVDA coughing up -4%, AMD slapped more than -3%, AVGO collapsing -8% and MRVL crashing -15% that is not marvelous.

Everyone is caught up in the AI hype. As they say in the Bronx, "Good luck wit dat." The AI garbage is just an aggregator (compiler) at its heart. It will allow call centers to can a couple of employees and worsen the phone experience, and businesses to get rid of the part-time workers performing research and other tasks for minimum wage, and to eliminate a few positions in the drug development programs, and to lessen the need for some coders and programmers, and to remove a few junior finance jobs, and can a few paralegal assistants, and render learning a language useless since the smartphones handle that now, but, what else ya got? Surely, it is far more than this, right? Is that all ya got?

Further, there are labor shortages to build the new data centers. Construction workers are deported and others are in hiding worried about getting deported. You can no longer grab a guy in front of Home Depot to install the wallpaper in your bathroom; if you are lucky, you can find him hiding behind the sheds in the parking lot.

The electrical grid is nowhere ready for the power needs from AI. How long before the pubic begins yelling about their electricity and energy bills paying for the wealthy class to get rich off AI? They already are. The greedy folks say the new companies will lower electric costs because they will pay more into the system. If this is true, start paying now, jackasses, and lower the energy bills. Do not hold your breath.

People do not care about fancy computer information and the new AI fantasy when they are trying to support themselves, some working two jobs, and worried about money every day. The have's play with AI while the have-not's struggle to make ends meet. Where will future funding of the AI come from after the initial money is spent and everyone looks around realizing they are standing in a financial circle jerk? AI may turn out to be a bunch of expensive junk no one needs. The savings in efficiency and productivity may not offset the complexity, maintenance and cost of the AI systems. Sometimes, people-power is more efficient.

One of the fathers of AI was asked what career advice he could give to a young person considering the expansion of artificial intelligence going forward. He paused for a second, and then confidently answered, "Be a plumber."

The enterprise software, such as SAP (pronounced S-A-P not as 'sap' that denotes a fool and jackass) has been around over 20 years. This software has streamlined businesses and made work flow through companies efficient. The accounting department now has only 2 employees when it used to have 8 two decades ago. What is AI going to do? You will have to still keep the 2 employees because one may get hit by a bus on the way to work; no employee reduction here.

It is also funny that AI is promoted as an all-knowing omniscient force. Keystone's library has 8,000 books and about 500 are pre 1910 with the oldest over 250 years old. These books are not on the internet; how can an AI robot know everything when it does not have all the information? How about scientific and mathematical data? Companies are going to want to keep that stuff confidential. What good is a superfast, gifted computer when it will not have important data for solving a problem that people want to solve? It sounds like a bunch of overhyped nonsense that will disappoint. The jury is out on the so-called AI revolution. AI this! (place hand on crotch like Michael Jackson). Michael and the great Orianthi practicing "Beat It."

The chips went to Orgy Town since April but it looks like the party has run its course. Now, like Roy Brown and "Big Town," the semi's are in trouble and must beg for a nickel to call their baby and beg to come back home. The multi-month rally was fun but now it is time to pay the piper. Price bounces off the 20-wk MA, now at 6409 and rising, so keep an eye on this important support going forward. The dirty SOX will stink badly if the 20-wk is lost.

The red lines show the universal neggie d across all indicators as price made the higher high. She's cooked. Stick a fork in it on the weekly basis. Comically, as the SOX takes the first move off the top on what should be the start of a multi-week neggie d spankdown, the Aroon green line is at one hundo so every single chip bull remains a chip bull no matter what happens. Likewise, the red line down at 4% shows that most every chip bear also believes that chips will go up forever. That's funny (and a contrarian indicator).

The ADX shows that the last strong trend for the SOX was higher in early 2024 but that petered out and price stumbled sideways. The dip in April occurs but that was not viewed by the ADX as a strong trend lower. It was about to be, moving above the 25-30 area, but instead it rolled over lower as price recovered from the spring lows. Price makes the higher highs now but the ADX does not confirm the rally as a strong trend higher and further, the ADX is negatively diverging away from price (bearish).

Help! The chip ship is taking on water. Quick, throw those H200 chips overboard to lighten the load. We must stay afloat and keep the AI hype going. Oh no. Watch out for that DeepSeek log in front of us. Bump. Whoaa! This whole AI thing is getting shaky. Are you sticking around?

Keystone is not long or short the chips right now but the chart tells you short is the direction ahead on the weekly basis. Chips are a leader so the broad stock market will likely want to follow. The SOX monthly chart is crappy with indicators mostly neggie d, that will help the weekly chart kick prices lower, but the histogram and MACD squeeze out higher highs so far for the month of December.

If this price action remains through the end of the year, one more jog move would likely be needed on the monthly basis to place THE top (down one month and then up the next month for THE top). Price would drop for a few weeks, as per the weekly chart above, but then come all the way back up for matching highs, when the monthly chart will be completely neggie d and mark THE long-term top for chips as the new year begins (months and a year or few of downside ahead for chips).

The MACD on the monthly chart is in nosebleed territory so it has nowhere to go but down so it may not be all that important and THE major long-term top would be in, NOW. There is still a lot of December to play out, so the histogram and MACD may turn neggie d over the next 3 weeks. Simply watch the charts. There is no need to guess.

Bring up the daily chart and you can see the neggie d spankdown plain as day. Price made the higher high, the double-top pattern, with all the indicators sloping lower, negative divergence, so she is cooked on the daily basis and this kicked in the negativity last week. SOX will have fits and starts but the weekly and monthly charts point to sad times ahead not the happy AI joy that all the twits, in their fleece sweaters sporting the tech company logo, profess nowadays.

Silicon Valley tech workers scream, "Blasphemy!" Tech bros proclaim that Keystone does not know AI from Shinola. They say he does not know what he is talking about, even accusing him of smoking something, while decreeing that AI is the greatest thing since the invention of the railroad and internet. Are they sure about that? Things always sound good on paper but take far longer to implement in widespread practice and if successful, it does not happen overnight, it costs a lot more than expected, and it typically does not live up to all the hype.

Instead of tulip bulbs, maybe AI represents the Law of Diminishing Returns for the Technological and Computer Age?  If you are a novice trader and riding the chip hype, get yourself out before you get hurt. 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 Evening, 12/16/25: SOX drops to 6888 and ends the session at 6958. Keybot the Quant identifies 6840 as a key line in the sand for SOX so if that fails, it is all over but the crying.

Note Added Wednesday, 12/17/25, at 2:53 PM EST: SOX falls through 6840 today so there is a lot of crying going on. The dirty SOX are soiled now printing 6699 a 66-hundo handle. The SPX is at 6740 with a LOD at 6729.

Note Added Sunday, 12/21/25: SOX ends the week at 7068 after a low for the week at 6680. The rollover should continue but dip-buyers keep worshipping chips.

UTIL Utilities Weekly Chart; Utes Tempting Failure at 50-Wk MA that Would Have Serious Negative Consequences for the US Stock Market

It is time to be very afraid. Kitty saw the utilities chart and ran away; now hiding under the bed and refusing to come out. Animals must sense danger. Price is tapping on the trap-door. If you are standing at the gallows with a noose around your neck, it is advisable to not tap the trap-door with your foot. Gallows Pole. Hangman! Hangman!

Bad things will happen to the US stock market if price fails at the 50-wk MA at 1057; it is a trap-door for equities. If she fails, expect the SPX to dump a big chunk within a short time after the failure and things will get worse from there. Bulls must keep UTIL, or DJU, above 1057 by all means necessary, otherwise, they will be walking the Green Mile to the Gallows Pole.

You have to squint but you can see the 50-wk MA line at 1057 inside the blue square, and the lower shadow of the candlestick, representing the low price for the week thus far, and today is the first day of the week so that is the same as Monday, is 1059, only a hair from failure that will wreak havoc on the US stock market. It is high drama with the SPX gains for this year on the line.

Everybody and his bro are calling for smooth sailing into the new year with more stock market gains ahead along with rainbows, blue skies, flowers and puppy dogs. There are no bears. It will be quite a site if UTIL, or DJU, 1057 fails.

The US stock market goes into a crash profile if UTIL 1057 is lost. This means that a major crash for US equities is on the table if the failure occurs. Watch the drama closely. If you choose to remain long stocks, and you see UTIL lose 1057, it will be time for you to bend over and assume the position. Kenny and The First Edition Just Stopped In to see what position my condition was in. 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, 12/21/25: UTIL drops to 1061 with the 50-wk MA trap-door at 1059. It is all on the line now. Will the trap-door open?