NYUD Advance-Decline Line and NYA NYSE Composite Daily Charts

The NYUD washes out to the downside with the decliners orders of magnitude higher than the advancers in the Friday trade. The green circles show market bottoms when the NYUD prints a low number indicating a wash-out in the negativity.

Note the -600 print from last Tuesday which is a wash-out signal then boom, stocks continued to flush lower printing an uber low NYUD. Stocks should bounce with at least a dead-cat bounce from these uber oversold levels.

One of Keystone's useful tools for the NYUD is the 63 EMA. Note the slope of the moving average over the last six months shown by the red line for a downward sloping ema and a green line for an upward-sloping. What do you see? Yes, the behavior in the NYUD 63 EMA on the daily chart verifies and forecasts the path ahead for the stock market. Bulls have a lot of work to do to right the ship. 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.

SPXA150R S&P 500 Percent of Stocks Above 150-Day MA Daily Chart

The SPXA150R is a useful tool to always watch. Whenever you see it move above 80, bring on shorts, and the higher it moves above 80 the more you short the stock market. It works every 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.

UTIL Utilities Daily Chart; Death Cross

On the utilities daily chart, the 50-day MA stabs down through the 200-day MA for a death cross. The death cross portends trouble ahead for the utes which should filter into the broad stock indexes. Reference the UTIL weekly chart a few charts ago for further study in this important area.

As Keystone always mentions, when a death cross occurs, price typically bounces. It takes a lot of negative effort over many days and weeks to move price lower which will bring the 50-day MA lower to create a death cross so by the time it occurs, there is already an enormous amount of negative energy spent so price typically bounces. This is why death crosses get a bad rap. The death cross occurs but then price rallies so chart-hater's will proclaim that the voodoo science is wrong. They simply never spent the time to understand technical analysis and are not educated enough to speak on the subject.

So a bounce would be expected in the daily time frame. As long as the death cross remains in play, however, UTIL will be weak in the weeks and months ahead. The light green lines show that the indicators are positively-sloped but that is not possie d. The UTIL price has to make a lower low for a divergence to occur. Thus, if you are looking for a trade, playing utilities from the green circle will be a possibility. If price drops into that circle and the indicators remain positively-sloped, that will be positive divergence, which is upside fuel for price, in this daily time frame.

XLU is printing its death cross now lagging UTIL that printed the cross about four days ago. Weakness in utes is a negative signal for the overall stock market going forward. Monitor the death crosses on the utes going forward to see if they remain in place or if the bulls stage a comeback rally to try and turn things around. 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.

TICK NYSE Tick Index and SPX S&P 500 5-Minute Charts

The TICK and TRIN one-minute charts scroll continuously for any serious day trader or investor for that matter. Stock prices are washed out at uber low TICK's of -1000 and lower while TICK's at +1000 and higher indicate too much euphoric bullishness in the stock market. You can see on Friday after the opening the TICK fell to -900 which created an intraday bottom. The negativity continued at lunchtime with another low TICK that created an intraday bottom. The bears rule the day and continue driving the SPX lower and print a -1000 TICK so a bounce is expected, which occurs, but then stocks roll over again into the weekend.

The TICK is useful to give yourself a few-penny advantage while placing trades. Obviously, if you want to put a short trade on for a given stock, do not place the trade if the TICK is down at -1000; that would be stupid. Wait for the TICK machine to be above +500 and preferably near +1000 to put on your short. Conversely, if you want to buy a stock on the long side, any stock, do not buy it if the TICK is at +1000, as soon as you place the trade it will go against you. Instead wait for the TICK to print at -500 and lower, preferably at -1000, to place a long trade.

The low TICK readings on Friday hint that a relief rally is likely on the come. Price is starting to get washed out to the downside with multiple -1000-ish TICK's.

Also of interest, note how the SPX downward channel was well underway on Thursday before the Friday session even began. That steady-eddy downward path is machine-driven by the trading robots dumping blocks of stock with sell programs. 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.

GE General Electric Weekly and Daily Charts; Oversold; Falling Wedges; Positive Divergence

The trading floors are scattered with the bodies of dip-buyers believing that the industrial giant General Electric would recover. The knife-catchers keep buying GE but they run screaming from the ticker with bloody hands giving up and swearing to never buy General Electric ever again.

Now that the landscape is riddled with the GE dip-buyer's lifeless bodies, that have now all given up on the stock, it is of course time for the industrial turd to float higher. Both the daily and weekly charts indicate universal positive divergence across all indicators on both charts. Price is washed out to the downside. The indicators show that strength has been developing for the last month despite the further drop in price. The possie d should launch price higher in the days and 1 to 3 weeks ahead.

Price is also extended way below the moving averages requiring a mean reversion higher. It is tricky, however, to play stocks in the opposite direction of a strong trend. On the bull side, to have possie d across all indicators on both the daily and weekly charts, and falling wedges, and oversold conditions, that is a recipe for an upside launch.

The fly in the ointment is the monthly chart that still wants to explore lows on a monthly basis going forward. Thus, if you play the bounce now do not hold GE for the long run. Simply take the profits as it bounces probably during the month of February. GE will then likely roll over again due to the monthly chart but an upward bias may continue through February and March. GE would be expected to roll back over to the downside again and perhaps place a more substantive low at 12-15 in the spring and summer. That will likely at least stabilize the stock and set up a sideways range through 12-17 through the end of the year.

For now, in the short term, a bounce should occur to the 16-17 area this month. Keystone does not hold a position in GE currently but will buy some this week on the long side holding out his hands, with the palms facing up, to see if he can step in and successfully catch the GE falling knife. 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.

NYMO McClellan Oscillator and NYA NYSE Composite Daily Charts; Bounce Signal

The NYMO drops like a stone during the market selloff last week and at -91 is uber oversold so a bounce is on tap for stocks at anytime in the daily time frame. The prior green circle bounces either occurred coincidentally with the NYA price bottom or the NYA bottomed within a few days time after the low print in the NYMO.

Note the rising channel in the stock market until the summer time when happy tax bill talk was occurring and of course most importantly, continued easy money from the ECB and BOJ. That sent stocks on a steeper upside channel. The tax-cut bill was signed at Christmas time and everybody and his bro are throwing money at the stock market afraid they are missing out. On the NYA above, anyone that went long after the fifth trading day of the year is now holding their heads on a platter. That NYA chart pattern behaves like a run-of-the-mill commodity ending in a parabolic spike that then quickly retreats. 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.

BPSPX S&P 500 Bullish Percent Index Daily Chart

Here is an update to the prior BPSPX chart. Scroll back to that one for further information.

For the BPSPX, the 6 percentage-point reversals are key and also the 70% level. The BPSPX remains on a double-whammy buy signal ever since price moved above 70 in late September early October. The double-whammy buy signal sends stocks to new record highs in January. The SPX all-time high is 2872.80.

The BPSPX tops out at 83.3 so taking away 6 is 77.3 the level where a market sell signal is triggered. If BPSPX fails at 77.3, then fails at the 70 level, that would be a double-whammy sell signal and big trouble for the stock market. Equities would be falling in earnest.

For now, the bulls remain in charge based on the BPSPX. The market bulls need to keep the BPSPX above 77.3 and that will keep the stock market bumping along sideways with an upward bias.

Note that the bears are making headway lower but need another 50 cents lower to get under that 77.30 for a market sell signal. If the BPSPX stays above 77.30 and begins moving higher again, the market bears got nothing and the bulls will be singing and dancing once again celebrating higher equity prices. 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.

RUT Russell 2000 Small Caps Monthly Chart; Overbot; Rising Wedge; Negative Divergence; Upper Band Violation; Price Extended

The monthly charts receive a new data point last Wednesday and the February candlestick is in progress. Houston, we have a problemmo. It is surprising how negative this chart is since the other monthly charts for the major indexes received a strong boost pointing at further buoyancy; but Keystone will have to take a look at them. The RUT chart is not well and considering that the monthly chart is a long-term period, the small caps are likely printing a multi-month and multi-year top currently.

The red rising wedge is ominous and extremely worrisome considering this is a monthly chart. In a worst case scenario, a drop to 700-900 is very much possible over the next couple of years. The RSI and stochastics are overbot and agreeable to a pull back. The red lines show universal neggie d across all indicators which was surprising to see. The indicators are saying that price is completely out of gas and topping out currently.

The upper band has been violated and the middle band, also the 20 MA, at 1396 is on the table for the weeks and few months ahead. Price is extended above the moving averages and needs a mean reversion lower.

The ADX is at 31. When the 2008-2009 crash was occurring, the ADX was showing that it was a strong trend lower in early 2009. That is when former Federal Reserve Chairman Bernanke stepped in to save the stock market and bailout the banks to protect the wealthy elite class in America. Thus, that strong downtrend in price quickly ended. As the small caps rally on the easy money from 2009 into the 2015 top, the ADX was showing that the upward trend in price was a strong trend in 2014 but it peterred out ahead of the spring 2015 top. Note that RUT price is way above the May 2015 highs but the trend is not as strong (ADX is lower).

Also of note is the MACD line. Remember n the SPX the MACD line took out the highs from 2014 a bullish development but the small caps have not. In addition, look at the MACD  line currently from January to February it is flat with price flat. If that MACD line rolls over to the downside this is likely the long-term top in the Russell 2000 small caps.

The chart is very straightforward. The overbot conditions, rising wedge and universal negative divergence should spank price down towards the 1396 area for the weeks and months ahead. You can develop a feel for things as it all plays out but one potential path ahead is to short the small caps on bounces going forward.

On the RUT weekly chart, price was spanked down by some negative divergence but the RSI made a high when price made a high in January so the RUT will likely want to come back up again after a week or three. That will likely set up a nice shorting opportunity. 

On the RUT daily, the neggie d spanked price lower and the indicators are weak and bleak  in the daily time frame. Stochastics are coming into oversold on the daily chart and price is beginning to violate the lower band. So RUT may find its sea legs in this 1510-1550 area and rally back up to 1580-1600 say a couple-three weeks out and then likely roll over with a serious long term downward bias 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.

UTIL Utilities Weekly Chart

The roll over in the utilities in late November early December was very important as Keystone pointed out at the time. As utes collapse, they are typically a harbinger for trouble in the stock market from zero to two months out. As UTIL plummets into correction territory now down in excess of -10% off its top, the stock market prints record highs. What's up with that? It is very rare market behavior and likely the result of nine years of obscene Keynesian intervention from global central bankers. Price discovery has been destroyed over the last few years.

The 50-week MA is key for UTIL as well as the weekly trend determined by the price 15 weeks prior. Utilities are in a weekly down trend since price is below the price from 15 weeks ago (purple circle). As long as the weekly downtrend remains in play for utilities, it should create sogginess in the broad stock market for the weeks and months ahead. UTIL failed at the 50-week MA five weeks ago. A flush lower in stocks typically occurs but alas, these are not your grandfather's markets due to the last few years of global central banker collusion, and instead stocks print record highs. Only last week did the broad stock market roll over to the downside.

You can see the 15-week lookback numbers only become more difficult to attain going forward since UTIL was moving into the top in October and November. So the weekly downtrend for utes should remain in play for at least another 7 or 8 weeks which is plenty of time to create mayhem in the broad stock market.

If UTIL could at least get above the 50-week MA at 722 this will stop the selling in the broad stock market and boost a relief rally in stocks. The lower standard deviation band was violated so the middle band at 731 and dropping is on the table. You can see that middle band which is also the 20 MA, is going to intersect the 50 MA probably later this month of early March. This confluence may create a magnetic effect that will pull the UTIL price up to 720-ish about 3 to 6 weeks out. So if the market bears want to do some damage they better seize the opportunity now without delay.

The red lines show the late November top that Keystone called. It was an easy call with the universal neggie d for all chart indicators and overbot RSI and stochastics and of course the ominous red rising wedge. Remember, the collapses from rising wedges can be quite dramatic and the one above is testimony to what would be expected from a rising wedge.

The MACD line and money flow remain weak and bleak wanting to see another low in UTIL after any bounce occurs for a week or three. The green lines are positively-sloped for the RSI, histogram and stochastics, however, this is not positive divergence since price did not make a lower low at the same time. UTIL is staggering sideways at these levels and remains ill.

If price comes down during the week ahead that will set up possie d wihtthe green lines and bounce price for a week or three but that weak and bleak MACD line and money flow will likely bring UTIL back down again for another low. At that time, maybe a month or two out, we can see if she wants to head higher in a more sustainable way and target the potential confluence at 720-ish.

The main takeaway is utes remain weak for two months and this appears to be continuing. The longer that utilities remain weak, the sicker the broad stock market will become. Pay attention to the UTIL 50-week MA at 722 going forward. Bears remain in half decent shape as long as UTIL remains under 722. 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.

January Publication of the Daily Chronology of Global Markets and World Economics 2018-01 is Available from Amazon; US Stock Indexes Print All-Time Highs; Global Stock Indexes at Record and Multi-Year Highs; Dow 26,600+; SPX 2,870+; Utilities Crash -13%; Treasury Secretary Mnuchin “Weak Dollar Policy” Mistake; Government Shutdown; Davos; Protectionism; Bank Earnings; Greenspan Says Stocks and Bonds are Bubbles; BOJ Announces Unlimited Bond-Buying; Global Yields Climb Higher

The January Publication of the Daily Chronology of Global Markets and World Economics 2018-01 is available through Amazon. The historic market action continues with more all-time and multi-year record stock market highs printing in the major indexes and individual stocks around the world. The S&P 500 crosses above 2,800 for the first time in history running to the all-time high at 2,872.80. The Dow Jones Industrials cross above 26,000 for the first time in history printing the all-time high at 26,614.85. Investors were joyously celebrating until the week of 1/28/18 where stocks drift lower and on Friday, 2/2/18, the Dow plummets 666 points.

January Cover Highlights;

US STOCK INDEXES PRINT ALL-TIME HIGHS

GLOBAL STOCK INDEXES AT RECORD AND MULTI-YEAR HIGHS

DOW 26,600+

S&P 500 2,870+

UTILITIES CRASH -13%

TREASURY SECRETARY MNUCHIN “WEAK DOLLAR POLICY” MISTAKE

GOVERNMENT SHUTDOWN

DAVOS

PROTECTIONISM

BANK EARNINGS

GREENSPAN SAYS STOCKS AND BONDS ARE BUBBLES

BOJ ANNOUNCES UNLIMITED BOND-BUYING

GLOVAL YIELDS CLIMB HIGHER

The January chronology highlights the non-stop all-time record breaking stock market highs in all seven major US indexes (SPX, INDU or DJI, COMPQ, NDX, RUT, NYA, TRAN or DJT) and the SOX. The Dow overtakes 26,600 and the S&P 500 prints above 2,870 (last week’s selloff shaves 108 points off the high with the SPX now at 2762).

The World Economic Forum took place in Davos, Switzerland, where Treasury Secretary Mnuchin inserted his shiny wingtip into his mouth by professing a weak dollar policy. Heads turned. Jaws dropped. A strong dollar policy is supposed to be the standard talking point of US officials (even though behind the scenes a weak dollar is desired). Mnuchin backtracked but the currency and trade wars and protectionism shots across bow have started.

Yields climb (the 10-year prints 2.854% not seen in four years) as February begins creating angst in the stock markets especially on Friday 2/2/18. The 2018-01 publication runs through Saturday 2/3/18 so the Jobs Report and the big selloff in stocks is recorded in detail as it played out in real-time.

President Trump continues boasting about the new record highs in stocks taking full credit and responsibility for the upside joy during January sans the last few days. Oil prices remain elevated with both West Texas and Brent printing at 2-1/2 year highs.

The chronology explains the price moves in global stock, bond and currency markets after key geopolitical events, central bank monetary policy meetings and economic data releases such as the monthly jobs report. If you are trying to make sense of the markets this is the resource for you. No other publication exists where the stock, bond and currency moves are detailed and explained as world events and economic news take place in real-time.

You can relive the real-time price moves and excitement in markets for any past events including the May 2015 stock market top (2015-02 through 2015-10), Brexit (2016-06 and 2016-07), the US election (2016-10 and 2016-11), the drama behind the French election (2017-04 and 2017-05), economic data releases, monthly jobs reports, Fed meetings and much more. The wild overnight crash in the S&P futures, and quick recovery, after President Trump’s election last November is chronicled in real-time, as it happened minute-by-minute, in the 2016-11 publication.

The 2017-11 publication chronicles the 400-point intraday drop in the Dow on Friday, 12/1/17, when it was thought that former Trump adviser Michael Flynn had implicated the president in nefarious deeds. This news story turned out to be not true although Jared Kushner and Donny Trump, Jr, may be in trouble.

The 2017-12 issue highlights all the wild action in the cybercurrency arena with bitcoin, ripple, etherum, litecoin and others. You can relive the excitement of the SPX 2,700 and Dow 25,000 levels in the 2017-12 publication as well as reference all the key statistics for the year for the world’s stock indexes, bonds, commodities, currencies and important individual stocks. Warren Buffett stands up and performs a jig of joy as his Berkshire Hathaway stock crosses above 300,000 for the first time ever in December 2017.

As always, all monthly publications of the Daily Chronology of Global Markets and World Economics are available from the links in the margins of the K E Stone blog sites or simply searching on Amazon or Google. The monthly publications contain updated information not posted on the Keystone the Scribe web site as well as clarifications, corrections, edits and refinements to the ongoing daily blog text.

The February 2018-02 chronology is tentatively set for publishing by Amazon on Saturday, 3/3/18.

The popular “Keystone the Scribe” daily market chronology blog, “The Keystone Speculator” stock charts and technical analysis blog and the “Keybot the Quant’ algorithm blog are visited by over one-half million people around the world each month. The free original content on these sites is not available anywhere else on the internet and content is only posted in proportion to the support received. Thank you.