SPX S&P 500 2-Hour Chart Standard Deviation Bands Tightening for a Big Move

The 2-hour was helpful in identifying the top last Tuesday. The overbot conditions, rising wedge, neggie d and upper band violation create the smack down. After the upper band violation, a move back to the middle band and perhaps the lower band is expected and both occur. Since the lower band was tapped a move back to the middle band is on the table and that occurs as stocks end the week at 2099-2100.

Note the pink standard deviation bands squeezing in tight. There is a big move coming but tight bands do not predict direction only that a big move will occur. Two tight bands in October both squeezed out upside moves one of 43 points and the other 60 handles. The bands are the tightest they have been since August right before the waterfall crash which was obviously a tight band squeeze that shot prices lower.

When price made the low three candlesticks ago the indicators were weak and bleak except for the flat RSI and stoch's in oversold territory which created the bounce over the last few hours. The expectation would be for price to head lower again to satisfy the weak and bleak MACD line, histogram and money flow. However, as always, the central bankers are powerful and are the market, so if Draghi or Yellen or Kuroda cough, and it sounds like they said easy money, stocks will explode higher.

The money flow is sneaky printing some buoyancy (green line) when price printed at 2108-ish so a move back to there would be on the table; 2110 is the uber strong price resistance level based on past price action so call it an upside target of 2108-2110 but the overall expectation would be for a continued move lower in this 2-hour time frame. If 2110 is taken out, 2118 is next and since that is breaking above the standard deviation lines the squeeze move would likely be higher with price headed towards 2125-2140.

A move up to 2110 would be relatively benign from a bear perspective since that would be where price would likely reverse to the downside and the effects of the tight band squeeze would send price down towards the 2060-2080 area. Next week may be a wild ride especially the back half due to the tight band squeeze. A new moon peaks for the month about lunch time on Wednesday, 11/11/15. Interesting; eleven-eleven. Typically stocks are weak moving through the new moon which would be Tuesday to Thursday. Big-time economic data hits on Friday, and the Federal Reserve says it is data dependent, including Retail Sales, PPI (Producer Price Index), Consumer Sentiment and Business Inventories. 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.

UTIL Utilities Weekly Chart

Old-timers, and the new fancy algo's, follow two key metrics for utes as mentioned before. The closing price 15 weeks ago determines if utilities are in a weekly uptrend or a downtrend. The 50-week MA is also a key indicator. Back in 2014 you can see the utilities above the 50-week MA and each week printing higher highs as compared to 15 weeks ago. The wine was flowing like water as stocks rally.

The joy deteriorated this year as utilities peak and collapse. Once a weekly downtrend begins for utes the broad market is headed for trouble starting anytime over the following couple months. If the 50-week MA fails that is a trap-door that opens and stocks typically take a whoosh lower. 

Stocks quickly fell to begin the year in concert with utilities. In May, the utes lost the 50-week MA and was in a weekly downtrend which forecast trouble for stocks and sure enough, the stock market peaked-out in May. The action is choppy ever since. The utes fell down through the 50-week in August and the waterfall crash in stocks followed.

Last week, price fell below the price from 15 weeks ago which was the brown circle at 562. Price is already  under the 50-week so this is a double whammy warning signal for stocks going forward. For the new week ahead, 11/9/15, the 15 week look back number is 583 (blue circle) so the bulls have a lot of work ahead if they want to reinstate the weekly uptrend for utilities. In addition, note how the following three weeks (15 weeks ago) are also at higher levels (purple circles).

Thus, draw a line in the sand at 583 and higher, and one week from now that will be 588 (the 50-week) and higher, for the next month (all in effect during November). As long as UTIL stays under 583 over the next five trading days and then under 588 for the next three weeks after, the stock market is likely in trouble going forward. With the big drop last week, the forecast would be for the stock market to top out anytime over, say, the next 8 weeks. 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.

VIX Volatility and SPX S&P 500 1-Minute Charts Illustrates Inverse Correlation

Volatility and the stock market move inversely to each other as Keystone often points out. The charts clearly illustrate this with the VIX at a top at 2:42 PM EST on Friday then trending lower into the closing bell. Conversely, the SPX bottoms at 2:42 PM and rises into the closing bell. Central bankers keep their foot on the neck of volatility to maintain elevated stock markets. Market bears need the VIX above the 200-day MA at 16.33 to create strong selling pressure. Under the 200-day MA the market bulls are not concerned about any short term market pull back since stocks will recover and rally. 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.

VIX Volatility Daily Chart

The VIX 200-day MA cross is a key market metric. Market bulls are in fine shape as long as the VIX is under the 200-day MA at 16.33. Market bears will growl strongly if the VIX moves above 16.33. The Keybot the Quant algorithm identifies the 18 level as where serious stock market negativity would begin. The bears need VIX above 16.33 or they got nothing. 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, 11/7/15: The VIX peaked at 10:05 AM EST yesterday (one-half hour after the opening bell) at 16.00, then proceeded to fall on its sword trending lower the remainder of the day. At 2:42 PM, VIX is at 15.24 and drops to 14.33 at the closing bell. Volatility moves inverse to the stock market so stocks rise during the last 90 minutes of trading. Central bankers pressure volatility lower to keep stocks elevated. The VIX remains under the 200-day so the bears got nothing.

Keybot the Quant Turns Bearish

Keystone's proprietary trading algorithm, Keybot the Quant, flips short at SPX 2094 this morning. Since the Monthly Jobs Report is tomorrow, flip a coin since anything can happen and the algo may whipsaw. UTIL 583.94 is important for all of next week so watch this level closely since bulls have an advantage above and bears below.

More information is found at Keybot's site;

Keybot the Quant

SPX S&P 500 2-Hour Chart Overbot Rising Wedge Negative Divergence

The 2-hour chart has been a recent focus so we can stick with the progress of this chart. The central bankers keep nullifying the affect of negative divergence but as long as the central bankers do not announce another money pump, equities should retreat. The SPX is at 2105 which opens the door to 2110 price resistance (see the SPX S/R missive previously posted for support and resistance levels) since the important and strong 2099-2103 resistance level is taken out. Market bears need price under 2099 to begin growling. The upper standard deviation band is at 2109 and in play although price did already tag the upper band three candlesticks ago (6 hours of trading time ago) so a trip back down to the middle band, now at 2087 and rising, is firmly in play regardless of whether price moves higher from here or not.

The overbot conditions, universal negative divergence (price moving higher but all the chart indicators are sloping down) and rising wedge pattern should send stocks lower as the day plays 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.

Note Added 3:20 PM EST: The bulls keep running and attack the 2109-2110 resistance and bust up through. The SPX daily chart has the long and strong MACD line as previously discussed so price will want to come back up again after any pull back but in this shorter term 2-hour time frame the bulls will not let any pull back occur. The LOD is 2097 so the bears tried to push under the 2099-2103 S/R gauntlet but failed. Traders are excited about the central banker pumping for the last two weeks and the BOE is on tap in the morning so perhaps the expectation is that the UK will push off any rate hike announcement into 2016. In addition, lower volatility, higher copper and especially higher oil that gains +4% today, boosting oil, gas and energy stocks and in turn the broad indexes, help to keep stocks buoyant. Auto sales also create a joyous mood.

Note Added 3:25 PM EST:  Looking at the resistance levels above from the SPX S/R missive, 2099-2103 leads to 2110 which then leads to some resistance at 2114, then strong price resistance at 2118, 2121, 2123 and 2126. You can lump these together and call the 2118-2121 as a cluster and then 2123-2126. The HOD is 2116.48 so the 2118 R holds, for now. The upper band on the 2-hour chart above is 2112.73 so price poked strongly up through the  upper deviation band so a move lower to the middle band, now at 2092 and rising, is in play due to the violation. The 2-hour chart remains negatively diverged so same analysis as a bove; the SPX should roll over lower in this 2-hour time frame but the daily chart wants one more price high after any pull back. The SPX is a whisker away from violating the upper standard deviation band on the daily cart now at 2118.47 which will set up a move back down to the middle band, which is also the 20-day MA, at 2046 and rising. The 200-day MA is 2062.46. Price still needs to back kiss the 50-day at 1987 and rising at some point forward. The SPX weekly chart is long and strong across all indicators so that wants a higher high in the weekly time frame after any pull back. The SPX monthly chart remains very uninspired as price nears the record highs all the chart indicators are seriously lagging. Thus, price should pull back in the very short term 2-hour time frame, say into tomorrow maybe Thursday, but then back up to satisfy the long and strong MACD line on the daily chart say to end this week perhaps at the 2118-2126 area, then roll over to the downside for several days or a week or so of downside probably to 2050-2090, then back up going into Thanksgiving to satisfy the long and strong weekly chart, back up to current levels, then roll over for an extended move lower starting in December or as the new year begins.

Note Added 3:37 PM EST:  The price action is great if long but any short positions are getting murdered. Gaps that need filled above are SPX 2120, COMPQ 5202-ish and RUT 1215. The RUT 200-day resistance is at 1216. VIX moves up to 14.50 right now but stocks remain resilient.

Note Added 3:49 PM EST: VIX moves up to 14.61. SPX is at 2109.56 dipping below that strong 2110 resistance which may hold into the closing bell. If price stays under the 2110 support/resistance level, then the SPX will want to retest that strong 2099-2103 support cluster.

Note Added 3:57 PM EST: The SPX peaked at 2:30 PM EST at 2116.48 now at 2108.50 so an eight-handle pull back off the intraday top. The 2117-2121 area represents the closing and intraday high numbers between late February and late April of this year.

Note Added 4:01 PM EST: SPX finishes at 2109.79 still settling out. The bears fight back with all their might to hold the important 2110 resistance. Treasuries sold off today with the 10-year yield up to 2.22% (lower bond price=higher yield). XLE (energy ETF) +2.7%. Chevron throws a party. CVX +3.4%.

AAPL Apple Weekly Chart Testing 50-Week MA and 200-Day MA

Apple is at an important juncture. AAPL parked itself exactly at the 50-week MA resistance at 119.50 over the weekend. Price will either bounce or die from this level. In late 2013, price broke up through the 50-week MA, back kissed, and then took off higher without looking back until the failure in August three months ago. The 100-week MA was critical support for price back in late 2013 and early 2014 and price came down for a look in August only to bounce so a move back to the 50-week was on the table, and occurs.

AAPL price may stagger along in the 105-125 channel going forward and eventually roll over to the downside as the year ends and new year begins. There is a gap fill needed at 124-ish so this hints that price will move higher to button-up the top side. Watch the 50-week MA at 119.50 as a key metric for Apple going forward; bulls win above bears win below. The opening bell rings and price bumps a smidge higher to 120 in the opening minutes. The 50-week MA is 119.57. 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 4:54 PM EST: AAPL begins the week up +1.4% to 121.18 with a HOD at 121.36. Price exceeds the 50-week MA at 119.60 which is a big win for bulls. Interestingly, price now parks itself directly on top of the 200-day MA at 121.16. The same drama that occurred today is on tap tomorrow only for a different moving average. Apple will either bounce or die from the 200-day MA at 121.16. Marrying the two key MA's, treat the 119.60-121.16 level as a key support/resistance gauntlet. AAPL bulls win big above 121.16. Bears win big under 119.60. The gap fill target at 124-ish remains on the weekly chart. Ditto the daily chart and in addition the daily chart has that gap at 127-130 which is big enough to drive a truck through and will need filled at some point in the future. The Apple weekly chart remains long and strong so price should move to higher highs after any pull back occurs on the weekly basis. The monthly chart remains unenthusiastic. So Apple may remain happy during this month but then fade as the year ends and new year begins.

Note Added Tuesday, 11/3/15, at 10:47 AM EST: AAPL is at 122.45 up +1.1% on the session and printing a HOD at 122.61. Check that; price just prints another new HOD at 122.63.

Note Added Tuesday, 11/3/15, at 3:52 PM EST: AAPL hits a HOD at 123.49 that is close enough for government work to fill the gap from late July. There still remains that huge gap at 126-130 from mid-July. The Apple 2-hour chart is negatively diverged wanting a spank down in the very short term time frame but price should come back up again for a higher high in the daily time frame due to the long and strong MACD line (say down on Wednesday maybe Thursday then back up Thursday or Friday).

SPX S&P 500 Daily Chart W Pattern Negative Divergence Developing

The SPX 2-hour chart posted during Friday afternoon trading identifies the 2094 top and then price receives the negative divergence spankdown down to 2079 in the initial move off the top. The 2-hour wants to see more downside in its time frame. The daily chart is negatively diverged with the histogram, overbot stochastics and money flow (red lines), however, the MACD line is long and strong wanting to see one more price high after a pullback. The RSI is playing both sides of the street and will rise into overbot territory if the MACD keeps moving higher but if the MACD rolls over the RSI should follow lower.

Thus, marrying the 2-hour and daily charts, weakness would be expected on Monday to satisfy the 2-hour chart, however, after price moves down to one of the lower support levels, a bounce should occur to satisfy the MACD on the daily chart above and bring the SPX back up to 2094-ish. The bears would be better off to see this happen anyway since there is a gap fill needed at 2096-ish and price fell a couple points short of filling this gap. The gap fill would button-up the top side and create an open door lower for stocks at least from a gap fill perspective.

The bullish W pattern was previously pointed out as it occurred. A W is a powerful stock chart pattern and gains power the more it is below the 50 and 200-day MA's which is the case above. The base of the W is 1880 and breakout top level at 1990. Thus, adding 110 points to the break out targets 2100 and at the 2094 high last Friday price is close enough for government work. Price may come up for the gap fill at 2096 which would also firmly satisfy the W pattern.

The price action has a rising wedge vibe as the thin black lines show; a bearish pattern. Price will need to back kiss the 200-day MA at 2062, 20-day MA at 2034 and rising and 50-day MA at 1980 and slightly rising at some point forward. New money typically comes into the market when a new month begins so bulls typically have a slight edge the first few days of the month. October was a big up move which may have stole some of the expected early month strength.

The ADX shows that the last strong trend for the price action was when stocks were tumbling lower in late August and September (ADX above 25). The ADX in late September early October told you the bears do not have the juice since the ADX had lost its strong trend status. The bears needed the ADX to be above 40 to prove that the stock market would crash lower; it did not occur. Interestingly, with the obscene run higher in stocks during October the ADX is only at 23. After all that central banker money printing and stock market goosing during October, that spike higher in stocks is NOT a strong trend higher which is very surprising considering how robust the move is. If the ADX moves above 25 and 30 and higher, the SPX will be headed to 2130. If the ADX stays under 25, the bulls got nothing and stocks will roll over to the downside.

Summing up the wind-bag discussion above and sprinkling some magic dust on the entire analysis, the guess is that stocks will trade soft to begin the week to satisfy the 2-hour chart but should recover into mid-week because of the long and strong MACD on the daily chart above. When price recovers higher the MACD should turn neggie d and that will lock in more sustainable downside ahead in the daily time frame. The chart indicates potential for a lot of sideways slop through 2062-2094 to begin the week. Reference the previous SPX S/R missive where the 2058-2062 level is a serious support gauntlet so this level may act as a magnet for price. This information is for educational and entertainment purposes only. Do not invest based on anything you read or view here. Consult your financial advisor before making any investment decision.

Note Added 5:04 PM EST: The bulls came to play today. The daily chart wanted higher highs as explained above but the thought would be that it would occur Tuesday or Wednesday rather than out of the gate on Monday (today). The MACD line remains long and strong and the RSI is now squeezing out a slightly higher high likely wanting to move up above 70 into overbot territory so the expectation remains for another higher high after any pull back occurs. It is surprising that price did not come down today and then create the move higher. Shorts are running for their lives and the bulls are tripping over each other willing to buy stocks at any price. The SPX 2-hour chart remains negatively diverged with the higher high in price so a roll over to the downside would be expected in the 2-hour time frame. it is a surprise to see the SPX move strongly higher today with the 2-hour all set up with universal negative divergence; this never happens, it is as rare as hen's teeth. Something odd is going on under the surface. Fed Chair Yellen is probably in the basement of the Eccles Building running a printing press herself. The 2099-2103 level is a formidable resistance area and price poked above, therefore, 2110 is targeted, if that gives way, 2118 is next. If price retreats, then 2091-2093 support is targeted.

SPX S&P 500 Support, Resistance (S/R), Moving Averages and Other Important Levels for Trading the Week of 11/2/15

SPX (S&P 500) support, resistance (S/R), moving averages and other important levels are provided for trading the week of 10/19/15. Levels shown in bold are strong resistance and support. Bold and underlined levels are very strong and important S/R. The SPX all-time intraday high is 2134.72 on 5/20/15 and the SPX all-time closing high is 2130.82 on 5/21/15. The intraday low for this year is 1867.01 on 8/24/15. The closing low for this year is 1867.61 on 8/25/15.

For Monday, with the SPX starting at 2079, the bears only need a tiny smidge of negativity in the S&P futures and the SPX will accelerate lower after the opening bell to begin the week. The bulls need to push above 2094 to regain their mojo and immediately catapult price above 2100. A move through 2080-2093 is sideways action for Monday. The SPX will need to back kiss the 200-day MA at 2062, 20-day MA at 2034 and 50-day MA at 1980 at some point forward. The gauntlet of support at the 2058-2062 area may act like a magnet drawing price lower for a test.

Price ended last week sitting at the 2079 support. Last week's low came down to kiss the starting year number at 2059 and bounced. If the bulls break up through the strong 2081 resistance, price will travel to the 2091-2094 to test this resistance area and decide if 2100+ will be on tap, or not. If the bears push under 2079, a test of 2076 is next then 2071 then 2067. If 2067 fails, the large support gauntlet at 2058-2061 will be tested. If this fails, 2056 is next which then sets up the major support test at 2050-2052. This level is very critical. If 2050-2052 fails, stocks will fall like a rock in a potential crash profile like August.

Looking at the big picture the strongest S/R is 2110, 2102-2103, 2099-2100, 2093, 2091, 2081, 2079, 2076, 2071, 2067, 2061, 2056, 2046, 2040, 2032, 2019, 2011, 2002, 1985-1988, 1978, 1973, 1965, 961, 1951, 1942, 1924, 1897, 1884, 1878, 1874, 1872, 1848, 1841, 1808 and 1803. Note the air pockets between 1872 and 1848 and between 1841 and 1808.

2135 (5/20/15 All-Time Intraday High: 2134.72)

2133 (7/20/15 Intraday High 2132.82)

2131 (5/21/15 All-Time Closing High: 2130.82)

2130 (6/22/15 Intraday High 2129.87)

2129

2128 (7/20/15 Closing High 2128.28)

2126 (4/27/15 Intraday High: 2125.92)

2124 (6/23/15 closing High: 2124.20)

2123

2121 (4/24/15 Intraday High: 2120.92)

2120 (2/25/15 Intraday High: 2119.59)

2118 (4/24/15 Closing High: 2117.69)

2117 (3/2/15 Closing High: 2117.39)

2114

2110

2109

2108

2107

2105

2104

2103

2102

2100

2099

2097

2094.32 Previous Week’s High

2094.32 Friday HOD

2094 (12/29/14 Intraday High: 2093.55)

2093

2091 (12/29/14 Closing High: 2090.57)

2089

2086

2084

2081

2080

2079.36 November Begins Here

2079.36 Friday Close – Monday Starts Here

2079.34 Friday LOD

2079 (12/5/14 Intraday High: 2079.47)

2076 (11/28/14 Intraday High: 2075.76)

2075 (12/5/14 Closing High: 2075.37)

2073 (11/26/14 Closing High: 2072.83)

2072

2071 (11/21/14 Intraday High: 2071.46)

2069

2067

2065

2063

2061.59 (200-day MA)

2061.26 (50-week MA)

2061

2058.90 Trading for 2015 Begins Here

2058.84 Previous Week’s Low

2058.47 (150-day MA; the Slope is a Keystone Cyclical Signal)

2058

2057

2056 (11/18/14 Intraday High: 2056.08)

2053

2052.10 (12-month MA; a Keystone Cyclical Signal) (the cliff)

2050

2049.88 (10-month MA)

2049

2046 (11/13/14 Intraday High: 2046.18)

2041

2040

2038

2036.82 (100-day MA)

2036.47 (20-week MA)

2034

2033.53 (20-day MA)

2032

2030

2024

2023

2022.87 (200 EMA on 60-Minute Chart a Keystone Market Turn Signal)

2021

2019 (9/19/14 Intraday High: 2019.26)

2018

2011 (9/18/14 Closing High: 2011.36) (9/4/14 Intraday High: 2011.17)

2009.49 (20-month MA)

2007 (9/5/14 Closing High: 2007.71)

2005 (8/26/14 Intraday High: 2005.04)

2003 (8/29/14 Closing High: 2003.37)

2002

2001

1999

1998

1997

1995

1993 (1/15/15 Closing Low: 1992.67)

1991 (7/24/14 Intraday Top: 1991.39)

1988 (7/24/14 Closing High: 1987.98)

1986 (7/3/14 Intraday Top: 1985.59)

1985 (7/3/14 Closing High: 1985.44)

1983.58 (100-week MA)

1983

1982

1981 (2/2/15 Intraday Low: 1980.90)

1980

1979.98 (50-day MA)

1979

1978

1976

1973

1970

1968 (6/24/14 Intraday Top: 1968.17)

1965

1964

1963 (6/20/14 Closing High: 1962.87)

1961

1958

1956 (6/9/14 Intraday Top: 1955.55)

1951 (6/9/14 Closing High: 1951.27)

1949

1948

1943

1942

1937

1936

1931

1929

1928

1924 (5/30/14 Intraday Top: 1924.03) (5/13/14 Closing High: 1923.57)

1920

1917

1912

1910

1906

1902 (5/13/14 Intraday Top: 1902.17)

1901

1897 (5/13/14 Closing High: 1897.45) (4/4/14 Intraday Top: 1897.28)

1891 (4/2/14 Closing High: 1890.90)

1889

1886

1885

1884 (3/21/14 Intraday Top: 1883.97) (3/7/14 Intraday Top: 1883.57)

1882

1880

1879

1878 (3/7/14 Closing High: 1878.04)

1877

1874

1873

1872

1870

1868 (8/25/15 Closing Low for 2015: 1867.61)

1867 (8/24/15 Intraday Low for 2015: 1867.01)

1865

1862

BPSPX S&P 500 Bullish Percent Index Daily Chart

The BPSPX remains on a strong buy signal. The BPSPX is marching vertical day after day showing that the bulls have no plans in stopping. The 70% and 30% levels are very important as well as the six percentage-point reversals which identify the change in trend. Bears were happy into late August but once stocks went down the rabbit hole and the BPSPX dropped under 30 you knew that a stock market reversal was near, and it occurs.

The bulls reversed the BPSPX by six points and crossed above 30 so that was party time for stocks but then the bears turn the tables again in late September. The BPSPX reversed six points and dipped back under 30 for one day but then the bulls started the long rally from early October to present reversing the BPSPX from 30 to 36 to receive the market buy signal. Stocks never looked back.

The strong buy signal remains and the BPSPX is now at the critical 70 level. If the BPSPX moves above 70 and higher the SPX will be headed to 2130. The bears got nothing unless they can hold the line at 70 and send the BPSPX under 63-64 to receive a market sell signal. 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 Monday evening, 11/2/15, at 5:14 PM EST: BPSPX jumps higher above 70 to 70.60. This is a double whammy buy signal for bulls and all-clear for a run at the record highs at SPX 2130-ish. Since the BPSPX just violated the 70 level today, the bears have a tiny window available to reverse this back under 70 but they have to do it immediately. Otherwise, the bull party continues.

Note Added on Tuesday, 11/3/15 at 10 AM EST: BPSPX 72.00.