CAT Caterpillar Weekly Chart; Negative Divergence Developing; Rising Wedge; Overbot; Tweezer Top; Price Extended; Michael Burry Short

CAT is in the news since Michael Burry wants to play it on the short side going forward. That may be a touch early for a short call on the weekly basis. Negative divergence is developing as the red lines show and the RSI, histogram, stochastics and money flow all want price to receive a neggie d spankdown. However, the MACD line remains long and strong with fuel in the tank to still take price higher. Also, that money flow is getting goosed and may create near-term buying interest.

Caterpillar is long in the tooth on the weekly basis. The rising wedge is a bearish pattern. The RSI, stochastics, money flow are overbot agreeable toa  pullback on the weekly basis. The MACD is in nosebleed territory so it can reverse at will from here and lock in the chart negativity. The Tweezer Top (blue circle) is identifying a top but it would be nicer if the MACD was neggie d.

She may jog for a couple weeks, down in price for a week then back up for a week around these highs and higher, and then the MACD will be neggie d to lock in the top.

Why the orgy with Caterpillar a stodgy old company that makes huge machinery ran by guys in flannel shirts that spit tobacco? AI, what else? Artificial intelligence has its hand in every pie. The data centers are needed for the AI revolution that will produce more stupid videos and answer your lazy questions. What is the first thing that happens when building anything including roads and bridges? A hole is dug in the ground and you need CAT machinery for all that work. Earth-movers will grade a lot of acreage so the rain water flows a certain way. Retention ponds are needed. Temporary gravel roads are needed as construction crews lay foundations and begin erecting the buildings.

That is the Captain Obvious reason for traders buying CAT with both fists over the last year. But there is a second reason. Caterpillar and Cummins provide huge diesel generators and other equipment that data centers will need. Everyone talks about the power needed. I need more power, Scotty! Captain, I'm giving her all she got! No one thinks about the back-up power. If power goes out in a storm or for other reasons, the show must go on so the data centers will probably have back-up diesel generators.

So CAT jumps higher with traders tripping over each other to buy shares. Some folks are late to the party, that always happens, so they may create some sideways chop until the above chart is in full neggie d for the top.

The CAT daily chart just topped out with neggie d on the daily basis taking the -7% beating today. There would be more downside expected for a few days or week or so. The monthly chart is ugly in negative divergence across all indicators except for the MACD but that is in the stratosphere with nowhere to go but down. There may be a month of choppy sideways slop ahead with CAT. The Burry short call looks good for going through the rest of the year into 2027 but it may still take a month of slop at the elevated levels before she lets loose to the downside.

If you rode CAT higher and have profits, take them and move on. CAT is a short the rallies play going forward for the rest of the year but it may be better to enter short in a couple weeks or a month. Keystone is not in CAT long or short but will consider playing it short as the year progresses. Come on, honey, show us that Stray Cat Strut. 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.

NKE Nike Weekly Chart; Falling Wedge; Oversold; Positive Divergence

In the sea of garbage charts these days, like Scamazon and Sapple, it appeared hopeless to find any ticker on the long side worth a look. Nike receives a bunch of negative publicity again after results were okay. Traders and investors have beaten this sneaker maker to a pulp. Nike was ridden hard and put away wet. Nike is shunned by everyone. It is Branded! Step forward Nike.

As typically happens, when you look at the charts, the real story is far different from the media diatribe. NKE is ready to rock 'n roll. It is set up with positive divergence so it is on the launch pad and all fueled up to explode higher in the weekly time frame. Even better, Nike is possie d across all indicators in the daily, weekly and monthly charts. Wow. That is really something. Nike has been bludgeoned badly in recent years but the worst is over and this stock is going to be one of the handful of winners from here as the year plays out. The falling green wedge is a bullish pattern typically from where stocks launch higher.

For anyone looking for a long to buy, buy NKE. There will probably be a bunch of folks running into buy it tomorrow and next week so do not dilly-daddly. It is fueled up and the fuse is already lit. She is going to fly. Since the broad stock market should pullback with a serious downdraft going forward, NKE may endure some more pain as investors beat the dead horse one more time. That will be great opportunities to buy. Choose your spots going forward but you can buy the dips on this one. Keystone does not own NKE long or short but will probably buy some long after a bit more time is given to see how the broad stock market flushes lower. Ugly Nike, the girl that no one wanted, that worked at the shoe store in the mall over the last few years, is now the most popular girl at the mall. Young folks do not remember malls. Complicated. This information is for educational and entertainment purposes only. Do not invest based on anything you read or view here. Consult your financial advisor before making any investment decision.

AMZN Amazon Monthly Chart; Rising Wedge; Overbot; Negative Divergence; Upper Band Violation; Price Extended; Scamazon Receives the Neggie D Spankdown and Start of a Multi-Month Drawdown

Are you a bag holding sucka in Scamazon? There were a couple of idiots on television today telling folks to buy AMZN with both hands. That's funny. Amazon is cooked, crispy fried, on a long-term multi-month basis. Stick a fork in it. Jeff Bezos knew when to exit stage left. Every investment house and money manager owns funds with Amazon as part of the make up, or recommends that investors keep AMZN in their portfolios. Suckers. It's funny.

The chart above is a POS. What is so hard to understand? Are you blind? You look but you do not see. Let's take a look at the mess. The red rising wedge is a bearish pattern and the collapses from rising wedges can be quite dramatic. Price teeters on the lower rail support of the rising wedge.

Most importantly, the chart is in full negative divergence across all chart indicators. As price made new highs, on the monthly basis, the indicators are now all sloping lower and out of gas unable to take price to new highs again. AMZN receives the initial neggie d spankdown off the top but she has a long ways down to go. The RSI and stochastics are coming off overbot levels agreeable to a pullback.

The ADX pink boxes show that the last strong trend was higher but it petered out in 2022 as the COVID-19 pandemic came to an end. As Amazon price then recovered and moved higher, the ADX tried to register it as a strong trend but alas, it petered out and all the record highs up in this nosebleed territory are hype and fluff. People are just buying Amazon stock just because it is Amazon. The long players that would buy then sell, then buy again, always looking for the bigger fool, are now looking around realizing no one wants to buy anymore, and accepting that they are the bigger fool left holding the bag.

The Aroon green line shows that most every bull still believes AMZN will go up forever. That is no surprise. They are big bulls for Amazon stock and fanboys. The funny thing is the red line shows that most all the bears also believe that Amazon stock will go up forever.  Everyone is on one side of the boat. The bears have given up on shorting it. You know what happens next and the neggie d spankdown and multi-month pullback has already started.

The stock did a round trip during the COVID-19 pandemic jumping from one hundo up to 180 then coming back down to one hundo as the pandemic ended and the covid endemic phase began (covid behaves like the regular flu now). The upper band is violated so a trip back to the middle band at 227 is on the table also the lower band at 184, both rising sharply.

Price is/was extended above the moving average ribbon requiring a mean reversion lower. The blue starts show the prior tops where price was extended too far above the 12 above the 20 above the 50 above the 200. Those pullbacks were 37 points, 100 points, 50 points, 60 points and 64 points. Thus, we can get mathy with this. Mathematicians say thus, therefore, and ergo, a lot, that is why Keystone's invitation to the July 4th party got lost in the mail. Let's say the top is 275 so taking away the smallest pullback at 37 would be a 238 downside target not too far from here. Taking the biggest mean reversion pull back at one hundo points, that would target 175 as the destination over the coming months. If you average the pullbacks, you get 62 points as the average mean reversion so that would target 213.

Keystone's 80/20 Rule says 8's lead to 2's on the way up and 2's to 8's on the way down. If price came down to 220-ish, that opens the door wide to get to 180. The first test is the 12-mth MA at 236. If a stock or index falls below its 12-mth MA it can be considered to be falling into a cyclical bear market.

Amazon is a POS. That is why Bezos ditched it. He milked it for all it was worth and he git while the gittin' was good. Call your money manager and tell them to get you out of Scamazon stock. They will tell you that you are in for the long term. Tell them the ole Wall Street adage that "in the long term you will be dead."

AMZN should continue lower on a monthly basis for the remainder of the year and into 2027. It is reasonable to expect a pullback to the 180-200 area and then it can be reassessed to see how far down she will really go. Keystone is not long or short AMZN and has not played it in a couple years or more. Get out of Scamazon and save yourself while you are able.

On the wekly chart, it receives a neggie d spankdown for the last 5 weeks and is hesitating at the 20 and 50-wk MA's at 231-238. Real trouble begins if this fails. The indicators are agreeable to the sideways hesitation but the MACD remains weak and bleak wanting to see further lows in price on the weekly basis that means the 231 may get tested over the next couple weeks.

On the daily chart, you can see the positive divergence bouncing the stock price now on the daily basis. This may continue a few days. The 50-day MA resistance is at 255. So the daily chart says up, the weekly chart is sideways favoring a downward bias, and the monthly chart is gonzo and has started a multi-month pullback. Of course there will be fits and starts but Scamazon will likely meander lower from now into 2027. That will surprise a lot of people especially those that keep saying buy, buy, buy over the last couple months. They are the bagholders.

Amazon and Apple monthly charts are similar They are receiving the short-term boost in the daily time frame but the long-term charts are challenged. AMZN's monthly chart is cooked as explained above but AAPL is trying to squeeze one last drop out before it begins its long multi-month descent for the remainder of the year into 2027. Plan accordingly. Keystone is not in AAPL long or short either. Amazon women are big and beautiful but California Girls are special. Lovely ladies from the 80's and 90's. This information is for educational and entertainment purposes only. Do not invest based on anything you read or view here. Consult your financial advisor before making any investment decision.