SPX 2-Hour Chart Sideways Channel Breakout Potential Tweezer Top

The SPX prints a new all-time high at 1897.28 thus far today so pay attention to this number. The jobs number was unimpressive at 192K, under 200K and missing estimates. However, the Fed will keep supplying the easy money heroin so traders line up to shoot this joy into their veins with a syringe and catapult the stock market higher. It is sick to cheer for lackluster numbers but this is the world the Fed created. Weaker-than-expected data results in a continuation of Fed easy money pumping stocks higher making the rich richer and ironically, the middle class and poor are beaten further lower since they do not have jobs and do not own stock. Chair Yellen expresses faux concern over the jobless but she is part of the crew that has created the problem.

The SPX breaks out of the two-month sideways channel 1840-1880 this week; a huge positive feather for the bull's cap. The bulls are unstoppable with the Fed money. The 2-hour chart is negatively diverged (red lines) so price should weaken as the day progresses and roll over to the downside. The blue circle shows a potential tweezer top that may print. Note that the RSI did not move into overbot territory as yet so the bulls will be pushing for this. The MACD line has rolled over with neggie d. Watch these two parameters moving into lunch time. If the two indicators remain negatively diverged, the price roll over should occur very soon in the hours ahead. If the RSI moves up into overbot territory and the MACD line prints higher negating the neggie d, then a few additional hours would be needed for price to top out which places markets at later this afternoon or Monday morning.

Charts always build in everything known up to the minute, but, as with this morning's job number, charts must react to the new data and typically need a little time to adjust and build the news into the chart. The SPX could have pivoted either way this morning but the bulls win as has been the case for the last year. A back kiss of the top channel line would be anticipated next week at 1880-ish since price will need to show respect and confirm the upside break out. Projection is for the SPX to roll over to the downside in the hours ahead. This information is for educational and entertainment purposes only. Do not invest based on anything you read or view here. Consult your financial advisor before making any investment decision.

Note Added 10:39 AM:  The SPX prints a triple top so far today, three stabs at the HOD at 1897.28 and it holds, so far. VIX collapses to 12.69 so the bulls are in full control., so far.

Note Added 12:02 PM: The neggie d holds as discussed above and spanks price lower without wasting time. A new candlestick is now printing for the 2-hour chart so this candlestick will handle the noon to 2 PM trading time slot. The Tweezer Top mentioned above remains in place so this pattern may lock-in the top for several days forward. Price had to come back down to show respect to and back kiss the top rail of the 1840-1880 channel but it was unexpected to already occur today considering the bullish start to the day. LOD is 1879.33 stabbing back down through the 1880 level. Watch to see if the 50% levels fail for RSI and stochastics for the chart above since that will usher in more negativity. VIX is 13.95 moving higher but still benign. Bears need VIX above 14.50 or they got nothing. Watch RTH now at 59.60. The 59.57-59.60 level ushers in significant weakness. Dollar/yen 103.30.

Note Added 12:11 PM: Things are getting ugly. The SPX collapses and is now back in side the two-month sideways channel 1840-1880. VIX 14.15; bears need another 35 cents. RTH is 59.47 giving up the fight creating market weakness. Whoa. The Nasdaq is collapsing down 98 points, -2.3%. This is big-time. RUT -2.1%. Tech and small caps, the market leaders, are in collapse. SPX is 1877 with a LOD at 1874.93 so watch this number closely. There are gap fills needed at 1872-1873 and 1857-ish. If price stays in the two-month sideways channel 1840-1880 then the upside price breakout has failed. The 8 MA just stabbed down through the 34 MA on the SPX 30-minute chart signaling bearish markets for the hours ahead; watch to see if it holds today.

Note Added 4:57 AM on 4/5/14: The early morning bullishness gave up the ghost in the Friday session with the SPX reversing 34 handles off the new 1897.28 all-time high. The action is similar to Friday, 3/21/14, two weeks ago, where a new all-time high was printed intraday resulting in a collapse; signs of a tired 5-year market rally. The negative divergence on the chart above creates the spank down and surprisingly, price drops back into the sideways channel 1840-1880 so the breakout to the upside during the week was a false breakout so far. The 20-day MA is 1865.79 and price closes at 1865.09 losing this important moving average. Keybot the Quant flips to the bear side at SPX 1875 but markets remain very much in a sideways bull-bear struggle. RTH falling through 59.53 triggered the stronger afternoon market weakness but bears are unable to push VIX above 14.50 so the move lower is not impressive as yet. If bears push VIX above 14.50 on Monday morning, then markets will flush lower. Bulls need RTH above 59.53 which will rally the indexes higher again. Traders are far too complacent as was highlighted with the CPC and CPCE put/call ratio charts in recent days. The end game for the central banker-controlled markets will occur when all confidence is lost in the Fed and other central bankers. As long as confidence in the Fed's easy money policies remains, the indexes will float higher. The jobs number is unimpressive today at 192K. If the economy was healthy the number should be 400K per month and more. The jobs number missed the estimates but stocks rallied since bad news is good news with traders counting on the Fed to provide more sugar candy. However, the candy is stale since the broad indexes gave up the fight today. Perhaps the confidence in the Fed is finally shaken?

Keystone's Morning Wake-Up 4/4/14; Monthly Jobs Report

The consensus for this morning’s Monthly Jobs Report is 206K jobs, call it 200K even, up from last month’s 175K jobs. The consensus range is from 175K to 275K. Whisper numbers are 250K. Traders in general expect a bullish jobs number of well over 200K. The unemployment rate is expected to drop one tick to 6.6% from 6.7% last month. Watch for wage growth, or lack thereof, since inflation cannot exist without wages rising. S&P futures are +3 in the early morning hours on the East Coast. Copper is trading higher. Traders are expecting the bulls to run.

The dollar/yen is 103.89. The weaker yen over the last few days, with dollar/yen leaping from 102 to over 104, provides the upside stock market fuel. Banzai! Dollar/yen is idling sideways like everything else this morning waiting for the Jobs Report only about one-hour away released at 8:30 AM EST.

Note Added 8:37 AM: The Jobs Report is 192K jobs missing all the prognostications. The unemployment rate remains at 6.7%. Hourly earnings are flat. The last two months are revised higher gaining a total of 37K jobs. This places last month at +197K jobs and this month is lower at 192K jobs. These numbers barely keep pace with the jobs needed to support new entries into the workforce. The jobs number is a disappointment but in the current distorted markets, traders are happy since the Fed will continue providing easy money crack cocaine. S&P futures leap higher to +8. Dollar/yen jumps above 104 to 104.05. Banzai! It's a shame that weak and lackluster numbers bring reason for cheer but this is the world the Fed and other central bankers have created. A very sick world where mediocrity is cheered. Gold remains flat at 1296 after the number. The 10-year yield is down slightly to 2.78%.

Keystone's Morning Wake-Up 4/3/14; ECB Rate Decision and Press Conference

China provides a mini-stimulus but like a hungry Oliver Twist, traders say, "please sir, I want some more." The dollar/yen moves briefly above 104. Banzai! Yesterday the dollar/yen moves steadily higher and now at 104 the weaker yen drives the stock market gains. The Yellen rally continues fueled by the weaker yen. Fed's Bullard says the taper may be tapered so easy money sends stocks higher. The SPX prints a new all-time high at 1893.17, so pay attention to this number, and a new all-time closing high at 1890.90, another key number to watch at today's closing bell.

The Dow is a hair away from new all-time highs and has lagged this year. Trannies continue to print new highs so Dow Theorists are looking for confirmation with new highs in the Dow. The Dow all-time high was printed the last day of last year, 12/31/14, at 16588.25 and closing high at 16576.66. Yesterday, the Dow printed the HOD at 16588.19 only six pennies from a new all-time high and closed at 16573.00 about four bucks below the all-time closing high. Watch to see if the Dow punches up through for new all-time highs since it will create joyous bullishness and send equities higher; the SPX will likely chart the path above 1900.

GTX 4879 controls market direction to begin the day (as dictated by Keybot). Equities float higher if GTX stays above 4879. A top will be placed for stocks if GTX drops under 4879 and heads lower. Bulls can receive upside juice and guarantee SPX well above 1900 if copper moves higher and JJC prints above 37.80. JJC is 36.93. Copper is weak today in early trading. Bears can receive downside fuel if RTH drops under 59.60 and/or VIX moves above 14.46. RTH is 60.18. VIX is 13.09. Volatility was higher for much of yesteday and ended flat even though markets were higher. The VIX should have finished under 13 considering the ongoing robust rally. Thus, either the SPX is wrong, or the VIX is wrong, and this will be resolved today.

For the SPX today starting at a new all-time high at 1891, the bulls only need two points, to punch up through 1893, and the upside rally party continues with price heading to the 1900 handle in quick order. The bears must push under 1884 to accelerate the downside. A move through 1885-1892 is sideways action today. S&P futures are +2. In the afternoon, traders must position ahead of the Monthly Jobs Report in the morning. Consensus is for over 200K jobs and some analysts are proclaiming 250K jobs so traders are bullish going into the jobs number.

The ECB Rate Decision is 7:45 AM EST and the Press Conference is 8:30 AM. Draghi's words will be studied to note any signs of dovishness. Draghi needs to weaken the euro to help European manufacturers and exporters recover and drive the economy but he is playing it coy in recent weeks. The consensus is that Draghi will not announce a stimulus program today, however, he may provide dovish lip service at the press conference which may cause the euro to weaken. Jobless Claims and International Trade is 8:30 AM. PMI Services 9:45 AM. ISM Non-Mfg Index 10 AM which may create a market stutter step. Natty Gas inventories 10:30 AM.

Complacency remains in the market. The VIX dipped under 13 yesterday to print a 12 handle and CPC and CPCE put/call ratios are printing uber low numbers indicating that a market top is in place or will be in place during the days or week or so ahead. The SPX is gapping-up day after day so the gaps left behind will likely need filled moving forward. The 10-year yield is 2.80%.

Concerning housekeeping on trades, Keystone exited the EUO euro short taking profits. No use giving up those gains if Draghi plays coy causing the euro to pop. A bounce in the euro to 1.39-1.40 will set up another nice short opportunity. If Draghi does not act with stimulus it is going to be almost a given for next month so a weaker euro is likely moving forward for the weeks and months ahead. Keystone took profits on the ARO long and will look to reenter. There is likely lots of upside ahead for ARO and it is receiving the positive divergence bounce projected the other day. Keystone bot more SJB adding to this ongoing long position which is short high-yield. HYG appears to be peaking out currently with the weekly chart hinting that a multi-year top may have just been placed or is in progress. Also bot SSNI opening a new long position which is a power grid play. SSNI, MGPHF and MUX are stocks mentioned as attractive long term buy and holds (LTBH). There are not many LTBH's considering Keystone's expectation for the broad indexes to move sideways to sideways lower for the weeks and months ahead.

Note Added 8:02 AM: The ECB leaves the key benchmark rate unchanged at 0.25% as expected. Futures are non-reactive. The euro moves slightly higher to 1.3772. Dollar/yen 102.92. S&P's +1. Nasdaq futures turn negative. Gold and silver are moving lower. Copper is down -1%. Oil is flat. The 10-year yield remains flat at 2.80%. All eyes and ears now focus on Draghi’s press conference in the minutes ahead listening for any hints of dovishness and a stimulus program to combat the ongoing European disinflation and deflation. Draghi is finishing a glass of orange juice at the free buffet brushing the jelly donut stains from his neck tie.

Note Added 8:53 AM: The Trade Deficit increases. Jobless Claims jump 16K higher to 326K. Draghi takes the stage and provides commentary on the ECB’s policy. Draghi says, “inflation is expected to remain low this year and then move higher in 2015 and reach the 2% goal in 2016.” He says, “do not rule out unconventional easing (QE).” Draghi says the “risks to the economy are to the downside” and “unemployment remains high.” Draghi’s comments are dovish so the euro leaks a hair lower to 1.3740 but overall the trader response is not to weaken the euro unless Draghi delivers something more substantive than dovish lip service. Draghi is not too dovish if he is content with disinflation and deflation to remain this year patiently waiting for inflation to arrive in 2015 and 2016. European exporters may be belly-up by then. Futures are flat not knowing which way to turn. Dollar/yen 103.95.

SPX 30-Minute Chart 8/34 MA Cross Upward-Sloping Channel Overbot Rising Wedge Negative Divergence

The bulls continue the upside Yellen orgy rally. Price jumps from 1845 to 1891, +2.5%, in four days. The stock market is moving about +0.6% higher per day. The Fed and other central bankers are powerful. The ECB decision is on tap only an hour or so away. The 8 MA is above the 34 MA signaling bullish markets for the hours ahead. Everything is going the bulls way. Bears got nothing without a negative 8/34 cross. The 8 MA is 1889 so the bears need to send price under 1889 to cause the 8 MA to curl downwards.

The upward-sloping channel and rising wedge are both in play. Price is at the top rail of the wedge but there remains space above to the top rail of the channel. The red lines show firm negative divergence across all indicators so the expectation is for a spank down in this 30-minute candlestick time frame. There is lots of momo, however, so price may take the bulk of the day into tomorrow to roll over. If you bring up a 2-hour chart, negative divergence is in place or developing but the MACD line continues higher. Thus, despite the negativity in the 30-minute chart above, the 2-hour chart likely needs from one to four candlesticks to play out to roll price over to the downside which corresponds to two to eight hours of trading time which may take markets through today and into tomorrow morning after the Friday Monthly Jobs Report. The 1-hour chart exhibits negative divergence across all indicators just like the 30-minute above so this hints that markets may top out and roll over today perhaps this afternoon.

Of course all bets are off depending on what Draghi says this morning. Draghi is bringing the tablets down from on high and will announce the fate of global markets at 7:45 AM EST followed by the press conference at 89:30 AM where Draghi's dovishness, or lack thereof, can be assessed and futures will react. Overall, the expectation is for the SPX to top out today or tomorrow. Bulls are in control until a negative 8/34 cross occurs. This information is for educational and entertainment purposes only. Do not invest based on anything you read or view here. Consult your financial advisor before making any investment decision.

Note Added 7:27 AM on 4/4/14: The SPX weakens yesterday due to the negative divergence but markets simply remain in a holding pattern until the Jobs Report due out in one hour. The 8 MA remains above the 34 MA, however, they are sitting directly on top of each other both at 1887. Obviously, markets will pivot and choose direction, which determines the 8/34 MA cross, after the Jobs Report.

GTX Commodities Weekly Chart Sideways Symmetrical Triangle

Keystone's algo, Keybot the Quant, identifies the key market areas that are most greatly influencing equity direction in real-time. Commodities are having the greatest impact on the broad indexes currently. GTX 4879 is the bull-bear line in the sand moving forward for the days ahead. Price is two bucks higher at 4881 so this creates market bullishness. If GTX stays above 4879, markets will float higher. If GTX drops under 4879, a lid will be placed in the market upside.

The blue sideways triangle is in play. Note the thinner upper trend line that price did punch up through and is now back kissing. Price remains in side the thicker blue lines. The moving averages are lining out sideways at 4820-4860 which obviously creates a key demarcation line. Keybot's key level is 4880 so lumping this together into a confluence identifies 4820-4880 as a key line in the sand. Equity markets will remains bullish and positive as long as GTX remains above 4880. The 4820-4880 zone is a battle area. Under 4820 confirms weaker equity markets moving 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.

SPX Daily Chart New All-Time Record Highs Tight Bands Potential Upside Channel Break-Out

The SPX prints a new all-time record high at 1885.84 and new all-time closing high at 1885.52. Stocks are gapping up three days in a row all the way from the bottom of the 2-month sideways 1840-1880 channel to the top. The gaps will likely need filled moving forward. Today is an important day since price will decide if it is officially breaking up through the top rail of the brown sideways channel, or not. At a minimum, a back kiss to 1880 would be anticipated. The pink standard deviation lines squeezed inward for a sharp move and so far price has catapulted from 1840 to 1886 in 4 days. The bands are now expanding outwards which typically will indicate a continuation move and price continuing vertically, however, if there is a time for price to reverse, it is now, either today and perhaps tomorrow. The bears must make a move since there is no more time remaining. If the bears do not come to play today the bulls are going to push above 1900.

Note the band squeeze in December where price started to move lower (opposite of what is occurring now), the bands started to expand, price continued lower for one day, then the second day, whammo, hard fast upside reversal and the band squeeze actually results in a huge 70 to 80 handle upside move. Does this fractal repeat (as a mirror image) where the SPX will reverse hard either today or tomorrow and drop about 70 handles over the next couple of weeks? The ECB Rate Decision is tomorrow likely the most important event of the week, then the Monthly Jobs Report Friday morning.

Interestingly, recent volume favors the sell side. At the late December top note how price was gapping up before the roll over so that fractal may repeat. The red and maroon lines show the negative divergence spank downs to begin the year and the early March top. Sometimes the charts are like herding kittens since the RSI wanted another high after the January selloff, then when markets topped in early March the money flow was running higher. The blue line shows the higher high in price that is now printing with universal neggie d across all indicators in the three-week time frame which forecasts bearishness ahead. However, the jolly rally the last three days creates momo and in the very short term the green lines show long and strong behavior so a day or three may be needed to burn off this momo energy.

Today and tomorrow, call it the rest of this week since ECB and Jobs are on tap, are key and will likely determine market direction for the next 2 to 4 weeks. Overall projection remains for sideways to sideways lower prices for the days and weeks ahead. Bears must close the SPX under 1880 today, otherwise, Keystone's 80/20 rule says 8's lead to 2's and the pathway from 1880 to 1920 would be open. A multi-year top is expected to be forming currently and may peak at any day forward at these levels. 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.

AA Alcoa Daily Chart Textbook Ascending Triangle Pattern

Double A was a Keystone fave last year; it was one of the few attractive LTBH's. Price is riding a rocket off the positive divergence bottom last summer. It is surprising to see it move as much as it has. The ascending triangle pattern is textbook and a nice chart to highlight for novice chartists. Using the blue triangle an upside target is 13.7-14.0 and the pink triangle yields an upside target at 13.6-13.7. The red lines show negative divergence and a move that is long in the tooth. The weekly chart is similar. The green lines show long and strong in the short term so Alcoa has momo still yet.

The expectation is for AA  to top out say over the next month or three at 13.5-14.0 and roll over to the downside heading sideways with a downward bias for the rest of the year. So another 5% may be squeezed out of the upside but overall, price will need to come back for a back test at the 12.0-12.3 level, about -8% lower. The money was made on Alcoa over the last few months; the position can be trimmed here on out say over a three-month time frame. Alcoa should top by summer and fizzle out. 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.

CPCE CBOE Options Equity Put/Call Ratio Daily Chart Signals Significant Market Top

As Alfred E. Neuman says, "what, me worry?" Traders remain uber complacent. With the two-day Yellen orgy rally, promises of China stimulus, perhaps ECB stimulus Thursday morning, the BOJ weakening the yen and buybacks continuing, traders have a right to be euphorically bullish. Traders are high-fiving each other today and the wine is flowing like water. The SPX prints a new all-time high at 1885.84 and new all-time closing high at 1885.52.Television personality Jim Cramer says that markets are not in a bubble and tells Ma and Pa Kettle to not sit on the sidelines anymore. Just think of the many folks that will now place their savings in the stock market. Aunt Edna just took her entire life savings and placed it in dividend stocks via DVY and SDY, high yield bonds via HYG and the broader market via long ETF's listening to what she was told from the television. The uber complacency signals a significant market top is printing now or over the coming days.

Keystone has highlighted the CPC and CPCE charts several times since late last year. You know the drill. Markets bottom with the green circles that show fear and panic in markets. The red circles show market tops when complacency and lack of fear rules, like now. Equities should top now or in coming days and a pull back of say, 20 or 30 handles in the SPX within a week or two, then perhaps 40 to 50 handles, or more, over the next month, would be a reasonable expectation moving forward. The question is where the SPX tops at in the days ahead. This information is for educational and entertainment purposes only. Do not invest based on anything you read or view here. Consult your financial advisor before making any investment decision.

Keybot the Quant Turns Bullish

Keystone's proprietary trading algorithm, Keybot the Quant, flips long today at SPX 1877. The bears held on overnight trying to prevent RTH 59.53 but bulls came to play today. Moving forward, bulls win with RTH above 59.53. Bears will win if RTH falls back under 59.53. Stay alert for a whipsaw especially considering the last three weeks are dead flat in markets. The SPX 1840-1880 sideways channel is in play for a couple months. Since the bears could not take equities lower under 1840, the bulls are trying to break out higher above 1880. The SPX prints a new all-time record high at 1884.60. More information is found at Keybot's site;

Keybot the Quant

Note Added 12:13 PM: RTH 59.57 ......... the drama continues ........ bears need four more pennies lower and they will stop the market upside.

Note Added 12:32 PM:  RTH 59.67. Nothing to see here, move along, move along. Bulls are remaining firmly in control well above RTH 59.53. Time for a slice of pie to ponder the market machinations.

SPX Monthly Chart Overbot Rising Wedge Negative Divergence

The cyclical bull remains in play as the 5-year rally, one of the longest in stock market history, continues. For the month, the SPX gains +0.7%, the Dow +0.8%, the COMPQ (Nasdaq) -2.5% and RUT (Russell 2000 small caps) -0.8%. The trannies (TRAN) are up a huge +3.1%. Transports print new highs but the Dow does not continuing to non-confirm the rally from a Dow Theory perspective. The SPX has only printed four down months in the last two years. The central banker money is powerful. Tech and small caps, however, the market leaders, may desire a different outcome moving forward.

The last day of the month of March began with the bears ready to post a negative month but instead the bulls slap the bears in the face stealing victory away with a very bullish day driven by the Yellen dove rally. Despite the euphoria in markets, equities continue to print a multi-year top. The indicators are overbot and the rising red wedge is a wickedly bearish pattern. The drops from rising wedges can be quite dramatic.

The indicators are overbot and the red lines show negative divergence across the board in the shorter and long-term time frames. This is a chart ready to roll over but keep in mind it is on a monthly basis so bears may have to be patient for another one to three months. The only fly in the ointment for bears is the MACD line (short green line) that remains long and strong. Thus, even after a sell off, price will want to come back up near or above these levels again and then officially roll over for months perhaps years ahead. The 18-year stock cycle, the most reliable cycle, remains in a secular bear from 2000 to 2018 so the chart will likely usher in the weakness expected for the secular bear into 2018 when the long-term secular bull will begin for 2018-2036.

The chart shows the cyclical machinations that operate within a typical secular bear. Sharp strong rallies are not uncommon and the 2003-2007 Iraq War cyclical rally illustrates this point. The cyclical bull followed where ex-Chairman Bernanke dropped money from helicopters with QE1 in March 2009 that saved the day and created this ongoing 5-year Frankenstein rally. The Fed and ECB pumped the markets into last year when the BOJ took control to stab the yen lower and provide further stock market fuel. The stock buyback programs, which are continuing, then provide the cherry on top taking many prices to these parabolic highs. Buybacks are an accounting trick to boost stock prices and typically about three months after the announcement a stock will typically be lower. Companies keep introducing new programs to push any negativity forward but the expectation is that the buyback juice is running out.

The projection is for sideways to sideways lower for the foreseeable future, months and potentially years. The stock market is expected to place a top within the next three months and it will likely be a multi-year top similar to 2000 and 2007. The top may already be in. The remaining tiny bit of bull juice with the MACD line described above will create a recovery rally after the next pending selloff but the path forward should allow the secular bear to start growling again. The 10 and 12-month MA's (not shown) are critical lines in the sand when price starts moving lower. The 10-month MA is 1753 and rising and price touched this danger line one-month ago where the bounce occurred. Big market trouble occurs if the 10-month MA is lost that is why the money men saved the day when price was about to collapse under.

The 12-month MA is 1730 and rising and represents the cliff where bearish markets are locked firmly in place moving forward. A potential path forward is a weak April and/or May, then a recovery rally in May or June, then a rollover to confirm sustainable downside for the months and years ahead from June-July forward. The price action in coming weeks will represent the proverbial picking up of nickels in front of a bulldozer; very limited upside potential with massive downside potential poised to occur at any time. 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.