RUT Russell 2000 and SPX S&P 500 Daily Charts; Prices Will Bounce or Die from Critical Moving Averages

Keystone was going to post a chart highlighting the Russell 2000 bouncing off its critical 200-day MA on Tuesday creating a key bottom for stocks, however, it was a good thing that was delayed since look at what happened today only two days later. RUT is back down for another test of the 200. The Russell 2000 flash crashed into the closing bell today and parked itself directly on the 200-day MA support at 1462. The RUT will bounce or die tomorrow from 1462-1463 and take the broad stock market with it. If the Russell fails at the 200, then price will then likely seek the 50-week MA support at 1445 where price would again bounce, or die.

Same story for the S&P 500. The SPX flash crashed to 2581 smack-dab on top of the 150-day MA at 2580 so price will either bounce or die from the 2580-2581 level tomorrow.

Watch these two key pivot points since they will tell the market story on Friday, 2/9/18. 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 1-Minute and 5-Minute Charts; S&P 500 FLASH CRASH ON 2/8/18

The S&P 500 flash crashes twice in the same week and the Dow prints two days that are down each in excess of 1,000 points. Today, Thursday, 2/8/18, during the last one-half hour of trading, stocks flash crash -2% creating a huge -3.8% down day overall.

The day plays out as follows.

Stocks are weak all morning and then deteriorate in the afternoon.

Treasury yields are; 2-year 2.12%, 5-year 2.57%, 10-year 2.85%, 30-year 3.14%.

At lunchtime, US stocks remain weak. SPX 2646. INDU 24482. COMPQ 6953. RUT 1492. VIX 29.63. Most sectors are in the red. Utilities are trying to stay positive. XLU +0.5% CLRE +0.3%.

At 12:22 PM, the SPX is down 45 points, -1.7% to 2636. The Dow is down 505 points, -2%, to 24390. The Nasdaq Composite is down 130 points, -1.8%, to 6921. The RUT is down 21 points, -1.4%, to 1487. VIX 31.53. Twitter is the bright spot in the sea of red ink today. TWTR +18%.

At 12:28 PM, SPX 2631. INDU 24354. COMPQ 6912. RUT 1485. VIX 32.05. The day is ugly. The market mood becomes ugly as the day proceeds. This year’s joyous bullish party with President Trump cheering new stock market highs day after day is long forgotten.

XLE -2.1%. One pundit after another told Ma and Pa to buy energy stocks with both hands over the last couple months. XLE has dropped from 78 to 67, -14%, in only 12 trading days. RRC is down -1.5% falling like a rock and down -60% off its record top almost two years ago. CHK -2.6%. COG -1%. GE -3.2%.

The SPX is down 56 points, -2.1%, to 1625. The Dow is down 590 points, -2.3%, to 24295. The Nasdaq Composite loses 169 points, -2.4%, to 6883. RUT 1481. TRAN -2.4%. WTIC oil 60.88. Brent oil 64.60. Natty 2.715.

Fed’s Dudley says the stock market selloff is “small potatoes.” Those are probably famous last words.

At 12:54 PM, the Dow is down 600 points.

Equities are sinking. The SPX is down 60 points to 2620. The Dow sinks 640 points to 24250. COMPQ 6871. RUT 1477. VIX 34.37.

The Dow is down 666 points, -2.7%, to 24228.

GE -3.8%. CMG -2.6%. CAT -3.8%. NVDA -3.2%. NFLX -3.8%. WHR -3.4%. UPS -1.6%. MMM -3%. GM -2.8%. DIS -6.8%. UNH -1.8%. T -2.666%. PG -1.1%. CVS -3.2%. HBI -10%. KORS -7.7%. NLSN -7.4%. GT -6.4%. IRBT -31%; the iRobot vacuum cleaner is stuck in the same spot wearing a hole in the rug.

There are a few joyous winners. NYT +15%. GRUB +20%. TWTR +21%. COTY +15%. K +3%. VIAB +7.2%. FISV +3%. CAH +2.3%. ELY +2.4%.

At 1 PM, the 30-Year Bond Auction goes off at 3.121% with soft demand.

Stocks remain weak all afternoon so the sell programs are relentless and not letting up. Volatility remains elevated and stocks remain depressed. The bottom falls out.

The SPX is down 57 points, -2.1%, to 2624. The Dow flushes 608 points lower, -2.4%, to 24292. The COMPQ collapses 165 points, -2.3%, to 6887. VIX 31.94.

Oil is down -1.3%. WTIC oil 60.98. Brent oil 64.666. Natty gas 2.69. Gold 1317. Silver 16.37. Copper 3.085. Platinum 975.

Treasury yields are; 2-year 2.13%, 5-year 2.57%, 10-year 2.85%, 30-year 3.14%. The 2-10 spread is 71.5 bips.

At 3 PM, stocks are crashing. SPX 2620. INDU 24265. COMPQ 6882. RUT 1480. VIX31.45.

Chips crash with the SOX down -4.2%. Chips are in -10% correction territory. MU -4.8%. NVDA -5%. AVGO -3.3%. XLNX -6.2%. HPQ -6.1%. Banks crash. XLF -3.666%. KRE -3.5%. XLI -3.9%. Everywhere you look stocks are bleeding.

HBI soils its underwear crashing -11%. NLSN -10%. KORS -9%. GT -8%. NFX -8%. TTWO -12%. TSLA -8.6%. Elon Musk pours a shot of booze into his café latte as Tesla lost almost one-tenth of its value in one day. ALXN -7.4%. TEVA -11%. NTES -6.3%.

The following five stocks send the Dirty Thirty over the cliff. AXP -5.6%. INTC -5.4%. CAT -5.4%. HD 0-5.3%. GE -5.2%.

The S&P 500 is down 68 points, -2.6%, to 2613. The Dow Industrials lose 720 points, -2.9%, to 24169. The Nasdaq Composite is down 188 points, -2.666%, to 6864. The Russell 2000 small caps are down 31 points, -2%, to 1477. VIX 32.76.

WTIC oil is down -2.2% to 60.44. Brent oil is down -1.9% at 64.26. Natty 2.69. Gold 1318. Silver 16.35. Copper 3.081. Platinum 974.

Treasury yields are; 2-year 2.13%, 5-year 2.56%, 10-year 2.84%, 30-year 3.13%. The 2-10 spread is 71.4 bips.

Interestingly, the bottom falls out of stocks but the yields are not moving higher. The 10-year was spanked back from the 2.79%-2.80% resistance level and has not come back up again.

Euro 1.225. Euro/yen 133.26. Dollar/yen 108.78. Pound 1.391. Euro/pound 0.8807. Indian rupee 64.26. Mexican peso 18.8425. Canadian dollar 1.26. Dollar/yuan 6.3298.

At 3:40 PM, stocks are at the lows. The SPX is down -2.8% to 2607. INDU sinks -3.1% to 24122. The COMPQ is down -3% to 6841. The RUT loses -2.1% to 1475.

Each time you look away from the computer screen, and then look back, prices are drastically lower. Equities are flash crashing into the close. The trading robots kick into high gear at 3:27 PM at SPX 2631 sending price to 2607 only 13 minutes later. The 2600 level will likely fail.

SPX 2605. INDU 24093. COMPQ 6839. RUT 1474. VIX 33.78. TRAN -3%.

At 3:43 PM, boom. The Dow is down 803 points, -3.2%, to 24087. Flash crash in progress. Indiscriminate selling is taking place. The baby, bathwater and kitchen sink are all thrown out. Margin calls create more selling pressure.

Since 3:30 PM, the TICK machine is throwing off -1000 and lower readings uber over sold). At 3:38 PM the TICK prints -1420. The negativity is off the charts. Traders are throwing stocks out the window. Indiscriminate selling.

The Dow is down 824 points, -3.3%, to 24061. The SPX sinks 80 points, -3%, to 2601. LOD 2600.33. The bulls are trying to hold the psychological 2600. Failure. At 3:51 PM, the S&P 500 loses the 2600 level to 2599.

Stocks flush lower. Trading volume is heavy about two times average but not as intense as the Tuesday flash crash at about three times average volume. There are large blocks of stocks selling into the closing bell. Prices are not recovering but instead sinking more negative into the bell.

TRAN is down 334 points, -3.2%, to 10227. The trannies are now in a -10% correction. The Dow transports and Dow Industrials are making lower lows forecasting more trouble from a Dow Theory perspective. The upside joy for many months is long forgotten. The trannies join the utilities in the -10% correction territory off the record tops. Ditto AAPL down -1.6% today. MSFT, AMZN, GOOGL, FB and NFLX are all down -10% off their record tops in correction territory.

The television pundits told Joe Sixpack, Ma and Pa Kettle, Aunt Mary and Timmy Tech to buy the stock market with both hands. They did and now they receive their heads on a platter. Aunt Mary listened to the nice guy on television and placed her entire life saving in the stock market on 1/23/18; tonight she is eating cat food for dinner wondering what to do.

Stocks wash-out into the bell. It is nasty. The bulls are running for their lives locking in profits and wanting to steer clear of the stock market.

Two minutes before the close, the Dow loses the psychological 24K level to 23957 and dropping like a rock. The Dow topped out at 26615 on 1/26/18. LOD 23849. The Dow has lost 2766 points in nine days, -10.4%. The Dow is in correction territory. This is the worst week for the Dow since October 2008.

The S&P 500 has lost %2.2 trillion in value in the last nine days. The high-flyers such as AMZN, AAPL, MSFT, BRKA and XOM have each lost between $50 billion and 70 billion in market cap. These five alone account for a loss of $300 billion in market value. Lots of novice investors ran into these stocks with their Christmas money and are only left with coal in their stocking.

Traders are relieved that the closing bell finally rings. There is carnage and blood on the trading floors. For the last 25 minutes, the TICK machine is pegged at from -1000 to -1400 so this uber negativity hints that a relief bounce should be on tap for stocks. A -1400 TICK indicates nearly every stock was thrown out the window in a mini panic.

The stock market flash crashes for the second time this week. In the last 32 minutes of trading, the S&P 500 falls 50 points, -1.9%. That is a flash crash in the final half hour.

At 4 PM EST, US stocks are bludgeoned and bloodied beyond recognition. The SPX drops 101 points, -3.8%, to 2581. That beating is going to leave a mark. The S&P 500 finishes smack-dab on the 150-day MA at 2580. LOD 2580.56. This is the big test. Price will bounce or die from this 2580-2581 level tomorrow. The decision will be epic. The SPX lost the 20-week MA at 2651.

The Dow plummets 1033 points, -4.2%, to 23860. LOD 23849. The 100-day MA support/resistance is at 24076. The 20-week MA at 24227 is lost.

The Nasdaq Composite finishes down 275 points, -3.9%, to 6777. The 100-day MA at 6856 is lost. The 150-day MA is at 6683. The 20-week MA at 6898 is lost. NDX -4.2%. TRAN -3.8%. SOX -4%. XLF -4.4%. What an ugly day. Hide the women and children from such a gruesome sight.

The RUT loses a stunning 44 points, -2.9%, to 1463 under the 150-day MA at 1483. The Russell 2000 stops directly at the 200-day MA at 1462. Like the S&P 500 above, the RUT will bounce or die from this critical support level at 1462-1463 and take the broad market with it.

The pivots from the SPX and RUT moving average support levels are key at tomorrow’s opening bell. The RUT 50-week MA is at 1449. If RUT loses the 200-day at 1462 tomorrow, price will seek that 50-week at 1449 for a test at that level. VIX 33.46. VIX HOD 36.17. The VIX printed at 50 during the Tuesday flash crash so for this event, stock prices print lower lows but the VIX does not print a higher high.

It will take a couple hours for the smoke to clear. Traders are filling the Manhattan bars comparing notes on the historic selloff and epic nine trading days that have sent major indexes into immediate -10% and lower correction modes. AAPL is down -14% off the record top. Uncle Frank bragged all of January about buying and owning Apple stock but he does not mention it anymore.

After the closing bell, AIG sinks -5% on earnings but a short time later is up +1%. ATVI +3.7%. BECN beats on earnings. EXPE crashes -15%. FEYE rallies +13%. MTW flat. MOBL sky rockets +19%. Flooring king and housing sector bellwether MHK beats on earnings but misses on the top line. NCR +0.7%. Chip darling NVDA rallies +5% on earnings and stronger guidance. NUAN +3%. SKX +4.8%. ZG crashes -7.5%.

Qualcomm rejects the takeover offer from Broadcom but talks will continue. AVGO +0.4%. QCOM +1.5%.

The Senate spending bill that needs passed by midnight to avert a shutdown hits a snag in the House. The rumors exacerbated the stock market selloff to a small extent. Conservative members in the House do not want to raise the government debt although they are in favor of military spending. The vote on the bill was supposed to take place today but it is delayed. The midnight deadline is approaching. Tick, tock.

The lawmakers should pass the bill this evening but there are worries that a partial government shutdown will occur again. The politicians are incompetent. The republicans and democrats both want to spend money on their pet concerns. There is no fiscal restraint. The budget office verifies the big increases to the debt if the bill is passed.

If the bill is passed to avert the midnight government shutdown, the democrats receive money for domestic giveaways and the republicans receive money for the military. Fiscal responsibility is spit on. The Tea Party is dead although conservatives voice concern over the big increase in debt. The politicians spend, spend, spend. The bread and circus days continue.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.

(above excerpt is from Keystone the Scribe)

SPX 1-Minute and 5-Minute Charts; S&P 500 FLASH CRASH ON 2/5/18

The SPX flash crashes on Monday, 2/5/18. At 3PM EST, the S&P 500 flushes -2% in 7 minutes and then recovers +2% in 7 minutes. The epic and historic market action leading into the flash crash event  is chronicled below.

At lunchtime on 2/5/18, after the European close, stocks roll over to the downside and begin accelerating lower. Boom, Both the SPX and INDU take out the days lows. That spells trouble. The machines are becoming more aggressive with the sell programs. There is another serious selling event underway in the stock market.

SPX 2738. INDU 25255. COMPQ 7197. RUT 1533. VIX 18.98.

Euro 1.2408. Euro/yen 136.50. Dollar/yen 110.01. Pound 1.401. Euro/pound 0.8857. Indian rupee 64.07. Mexican peso 18.6217. Canadian dollar 1.2499. Dollar/yuan 6.2926. USD 89.51.

Treasury yields are; 2-year 2.12%, 5-year 2.56%, 10-year 2.84%, 30-year 3.11%. The 2-10 spread is at 71.6 bips.

WTIC oil 64.666. Brent 67.99. Natty 2.75. Gold 1336. Silver 16.77. Copper 3.2275.

The SPX collapses to 2723. Boom. The S&P 500 is down 149 points off the record top at 2873 on 1/26/18 a -5.2% drop. After 402 trading days, the SPX finally makes a -5% correction. This is the longest streak in stock market history.

At 1:25 PM EST, the Dow is crashing 415 points to 25102. The SPX sinks 39 points, -1.4%, to 2722. LOD 2720.

The COMPQ drops 75 points, -1%, to 7165. The RUT is down 22 points, -1.4%, to 1524. Whoa. Look out below. The VIX catapults higher to 22.07. Equities are in free fall. The Dow is down 455 points in collapse.

Defense stocks are punished. ITA -2.3%. BA -1.8%. UTX -2.5%. LMT -1.6%. GD -1.666%. Energy stocks collapse. XLE -2.9%. Banks are bludgeoned. XLF -2.3%. KRE -1.7%. Industrials, chips, biotech and consumer staples all fall down the rabbit hole. XLI -1.5%. SOX -1.4%. IBB -2.1%. XLP -1.5%.

The weakness in semiconductors is taking stocks lower. SOX -2%. Equities are trailing steadily lower in programmed trading. The robots are taking price steadily downwards in a straight line. The computer algorithms are executing steady sell programs. The trend lower is orderly.

Bitcoin flash crashes -20% to 6583 well under the 7K level at lows not seen since November. Ethereum crashes -14% to 712. Ripple loses -11% to 0.727. The cybercurrency arena is a mess.

All 30 stocks in the Dow Industrials are negative. BA -5.7%. XOM -5.7%. MMM -5.6%. HD -5.6%. UTX -5.5%.

At 2:50 PM, the S&P 500 falls to 2700 hesitating at this key psychological level. Boom. It fails. The SPX stumbles at 2685-2695 a few minutes and then flash crashes. The bottom falls out of the stock market. Jaws drop.At 3:05 PM, The SPX plummets 82 points, -2.9%, to 2679. Investors are panicking. Stocks are in free fall with a flash crash occurring. The Dow drops 911 points, -3.6%, to 24619. The COMPQ collapses 169 points, -2.3%, to 7074. The RUT plummets 42 points, -2.7%, to 1505.

VIX jumps to 29.83. Humorously, three different analysts proclaimed this morning that there is nothing to worry about unless the VIX climbs above the 22 to 25 area. That trio of Einstein’s are likely part of the group that is now panicking.

At 3:07 PM, the Dow is down 1028 points, -4%, to 24468. Wow. The S&P 500 is down 96 huge points, -3.5%, to 2666. Equities are crashing.

The Nasdaq Composite is down 196 points, -2.7%, to 7044. WTIC oil is down -2.6% to 63.75. Brent oil is down -1.8% to 67.33. Natural gas is down -3.4% to 2.75. Gold is up 6 bucks to 1339. Silver 16.75. Copper 3.2055.

At 3:09 PM, the VIX spikes to 34.07. Stocks are crashing dropping faster than the numbers can be recorded. The SPX is down 105 points, -3.9%, to 2655. The Dow drops 1215 points, -4.8%, to 24290. The COMPQ loses 229 points, -3.2%, to 7013.

Wow. Markets are crashing. It is amazing to see in real-time. The numbers are dropping in big block increments. It is a full-fledged flash crash. Each time you blink the numbers drastically change for the worse.

The S&P 500 is down 121 points, -4.3%, to 2641. INDU is down 1507 points, -5.9%, to 24004. The Dow is down -6% and about to lose the 24K level! The Dow was above 26600 only six days ago! That is a 2600 point drop!

The COMPQ loses 256 points, -3.5%, to 6983. The RUT drops 51 points, -3.3%, to 1495.

The flash crash event ends and stocks recover with an intraday sharp V bottom. At the low, the Dow Jones Industrial are down 1597 points, -6.3%, the largest point drop since September 2008 when markets were crashing during the financial crisis and the largest point drop in the history of the stock market. It takes your breath away. The Dow is down 1600 points in one day.

Trading volume is heavy at 50% to 150% above the 30-day average. In other words, equities are dumped with volume at double and triple a day’s normal volume. Stocks are being tossed into the garbage with reckless abandon. No doubt margin calls are hitting investors and they are selling anything they can to raise funds. One trader cannot take the pressure and jumps out the window. Fortunately, he was on the ground floor.

The flash crash started at 3:03 PM at SPX 2693. The S&P 500 crashes to 2638 at 3:10 PM a -2% drop in 7 minutes and then immediately flash spikes back to 2695 at 3:17 PM a +2.2% gain in 7 minutes.

At 3:20 PM, the SPX is down 89 points, -3.2%, at 2672. The Dow is down 1060 points, -4.2%, to 24464 under 24.5K. The Nasdaq Composite slips 187 points, -2.6%, to 7056. The Russell 2000 is down 41 points, -2.666%, to 1506.

XLF -4.1%. XLE -4.2%. XLV -3.7%. XLI -3.2%.

The VIX is above 34 at 34.02 the highest level since September 2015.

At 3:30 PM, SPX 2691. INDU 24696. COMPQ 7088. RUT 1513. VIX 30.59.

Bitcoin crashes -12.2% to 7216. Ethereum crashes -12% to 729. Ripple crashes -11.3% to 7236. Bitcoin cash crashes -19% to 934.

Treasury yields are; 2-year 2.07%, 5-year 2.50%, 10-year 2.77%, 30-year 3.04%. The 2-10 spread is 68.9 bips.

There are 10 decliners to every 1 advancer but interestingly, in Friday’s selloff which was not as bad as today, there were 12 decliners for every 1 advancer.

XLE -4.1%. XOP -3.2%. XAL -2.5%. BA -4.5%. VOX -2.4%. VNQ -1.7%. MMM -3.7%. KRE -3.4%. XLF -3.8%. XLV -3.3%. UNH -4%. IBB -2.7%. XLU -1%. XLI -3.1%. CAT -3.4%. XLP -2.6%. XHB -2.4%. XLRE -1.5%. SX -3.1%. XLK -2.5%. XRT -2.3%. XLB -2.7%. TRAN -2.7%.

At 3:42 PM, stocks remain weak. SPX 2674. INDU 24566.60. COMPQ 7057. RUT 1508. VIX 31.57.

The computer screens are bleeding blood red but market pundits remain bullish on the stock market.

As stocks collapse, television pundits proclaim, “Let’s take a longer view,” also “don’t forget you are an investor for the long-term” and the ever-popular talking point “it’s a buying opportunity.” These are all the things said after your short-term trade blows up in your face. The old Wall Street adage asks, “What is a long-term investor?” Humorously, it is a short-term investor whose trade went the wrong way.

Indiscriminate selling is taking place. No doubt that many retail investors are running for their lives thinking the stock market was a dream but instead it turns into a frightening nightmare. Young folks that chased into stocks this year are losing about -10% across the board the last few days. Welcome to the stock market. You will learn that those making the money on Wall Street are the insider traders that know how the game ends ahead of time. The daily charts show distribution days over the last month where the smart money was sluffing off shares to the dumb money that now serves as the bagholding sucka’s.

There is $3.2 billion in stock lined up to sell into the closing bell. This is off-the-charts ugly. It will sink the indexes into the bell although many of the trades will be pared off in the coming minutes. The selling event is historic.

Those crazy short volatility ETF’s are blowing up. Novice traders in these dangerous instruments are being taken out on stretchers. XIV crashes -14%. SVXY -32%. The long-volatility plays catapult higher. UVXY +66%. VXX +33%. Smart investors know to stay away from these flawed volatility instruments.

Several trading platforms and websites go down including T Rowe Price, Fidelity, E-Trade, Vanguard and others. The robo-advisor websites such as Wealthfront and Betterment are in an outage unable to handle the traffic and data load. Lots of people are trying to gain access to account to find out how much money they are losing.

The day is wild with the partial Euronext outage this morning, the loss of fund platforms this afternoon and of course the flash crash in the stock market. History is written in real-time as the blood flows in the streets.

After several failed restarts this morning, the Euronext platform resumed trading in the CAC40 futures, commodities and AEX-related futures. The partial Euronext outage lasted about four hours. The computer systems are being tested today.

Over $1.5 trillion in market value is lost over the last couple days. President Trump will have to revise his talking points when he brags about all the wealth he created in the United States over the last year.

At 3:50 PM, the SPX is down -3.4% to 2666. The Dow sinks -3.9% to 24534. The Nasdaq Composite loses -3.1% to 7014. The RUT is down 50 points, -3.2%, to 1497. The Russell is testing the low of the day at 1495. Hold on tight.

At 3:54 PM, the Dow is down 1106 points, -4.4%, to 24409 under 24.5K. The SPX is down 104 points, -3.8%, to 2658. The COMPQ is down 246 points, -3.4%, to 6992.

Euro 1.2393. Dollar/yen 109.24. Pound 1.3984. Bitcoin 7314. USD 89.49.

WTIC 63.83. Brent oil 67.38. Natty 2.75. Gold 1341. Silver 16.695. Copper 3.1935.

Fed’s Kashkari, a dove, speaks with Bloomberg and says, “I do not see a financial crisis on the horizon but we are paying attention to it (the stock market selloff).”

The year-to-date (YTD) losers are sinking like stones in the water. CHK -7.1%. TSCO -3.3%. MET -3.5%. EQT -5.1%. HOG -1.6%.

Energy is whacked. XLE -4.2%. Pundits told Ma and Pa to buy energy stocks this year and sent the novice traders straight into a buzzsaw. HES -6.2%. XOM -6%. CVX -5.3%. BHGE -5.3%.

The FAANG stocks are defanged. FB -5%. AAPL -2.5%. Apple was up on the session earlier but gave up the ghost. AMZN -2.7%. NFLX -5%. GOOGL -5.1%. The chips are smacked hard. SOX -4.7%. XSD -4.6%. SMH -4.5%. LRCX -5%.

Traders are selling stocks and buying Treasuries as noted by the yields falling (note and bond prices rising).

NYSE President Tom Farley appears on CNBC business television trying to look relaxed and encouraging investors to remain calm. Of course he does. Farley wins the Captain Obvious award declaring, “It is an extraordinary day.” Despite the flash crash, Farley says the trading is “smooth.” He says, “We are prepared for it.” If that is the case, why did a flash crash occur?

Farley is pressed on why the flash crash occurred. Is it a fat finger? Computer glitch? A computer system malfunction? Excessive trading traffic? Foley says he does not know what happened. That is reassuring. He says the matter will be investigated and he proclaims, “The system worked.” The NYSE was within 2% of triggering a circuit breaker which would have temporarily halted trading.

There is carnage on Wall Street. Floor traders are relieved to hear the closing bell to allow the dust to clear and figure out what happened. The Dow is negative on the year. The stock market experiences the largest point-drop in history. There is a lot of technical damage in the markets.

At 4 PM EST, US stocks end the session in a bloody mess. There is market carnage in all directions. The SPX is bludgeoned 113 points, -4.1%, to 2648.94. LOD 2638.17. The stock market crashed. The all-time high is 2873 from 1/26/18 and only six days later prints 2638 a 235-point loss, -8.2% off the record top.

The SPX has lost the 20 and 50-day MA’s and is testing the 100-day MA at 2634. Price closed below the critical 20-week MA at 2654. Market bulls need to move the S&P 500 above 2654 otherwise the downside will continue.

The 402-day streak of the S&P 500 trading without a -5% correction ends. The last 18 months is the lowest volatility period in stock market history. Obviously, that ended today with the VIX spiking to 38.80. The VIX is at levels not seen since a short spike in 2015 when stocks were selling off and also back to 2011. The VIX will begin trading at 3 AM EST when the European stock indexes open tomorrow.

The NYMO McClellan Oscillator drops to an uber low of -118 which indicates that a stock market bounce should occur at any time. Ditto the low NYHL. Ditto the low NYUD that plummets to -1235. The TICK machine prints -1633 today and uber low number that hints that a recovery relief rally is needed. The CPC and CPCE put/call charts are not updating so there are problems with the data feeds.

The TRIN spikes to 4.00 which indicates intense selling pressure. Interestingly, however, for today’s flash crash, a TRIN of 8, 9, 10, 13 and something wildly higher would have been expected. The 1.3 to 2.0 area for the TRIN represents orderly selling.

The Dow Jones Industrials crash 1175 points, the largest point-drop in history, -4.6%, to 24346. The 100-day MA at 24005 serves as support. LOD 23923. The all-time high is 26615 from 1/26/18 and drops 2692 points intraday, -10.1%. INDU, DJI, is temporarily in correction mode down more than -10% off the top. The Dow has lost 2,700 points in only six days on an intraday basis. The Dow is down 2269 points off the record top a -8.5% drop. Several traders were taken off the floor head-first today.

The Nasdaq Composite loses a huge 273 points, -3.8%, to 6967 losing its 50-day MA at 7070. The 100-day MA is at 6840. The NDX drops 264 points, -3.9%, to 6495. The NYA sinks 512 points, -3.9%, to 12573 losing the 100-day MA at 12615.

The Russell 2000 small caps collapse 56 points, -3.6%, to 1491. RUT stabs down through the 100-day MA at 1518. The 150-day MA support is at 1481. TRAN loses 337 points, -3.2%, to 10350. The 100-day MA support is 10210. The chips are slaughtered. SOX crashes 62 points, -4.7%, to 1255 losing the 100-day MA at 1264. 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.

(The above excerpt is from Keystone the Scribe)

SPX S&P 500 2-Hour Chart

Remember for a couple weeks the SPX 2-hour chart was highlighted to identify the top. Price kept sneaking out new highs with the long and strong MACD line but all the indicators negatively diverged at that top candlestick so the the fix was in. The neggie d needed to spank price lower and that is what it did. Price violated the lower band so the middle band at 2806 and falling is on the table.

The RSI and stochastics are oversold in this 2-hour time frame and agreeable to a bounce in price. The RSI is possie d, also the stoch's and money flow so that can create a one or two candlestick bounce but note the MACD line and histogram making lower lows. These indicators want to see price come back down again after it bounces for a candle or two. When price then comes back down and makes lower lows say 2 to 4 candlesticks ahead, the bottom is in if the MACD turns possie d so that is what you have to watch for. It is the mirror image of waiting for the top to form with neggie d.

Stocks are falling like a rock as this is typed. Wow. The S&P 500 is down 38 big points, -1.4%, to 2724. Wow. Bingo. The SPX is now down 149 points from the record top at 2873 a -5.2% drop. After 402 days, the SPX finally makes a -5% correction. This was the longest streak in the history of the market.

Watch for the positive divergence to show up with the MACD line; that will be the bottom. For now and probably 2 to 4 candlesticks, which is 4 to 8 hours trading time, price will chop sideways (it is in freefall as this is typed) looking for the bottom. 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 12:16 PM EST on Tuesday, 2/6/18: There was more downside on tap as per the above chart but who knew an epic and historic flash crash would occur? The short-VIX instruments are blowing up and going insolvent. Keystone has warned all followers to never play a VIX ETF or ETN; you will lose your money; cross them totally off any watch list; now you see why since anyone long XIV or SVXY, and others, lost all their money in a heartbeat. On the SPX 2-hour chart at munchtime on Tuesday, the indicators are all possie d except for the MACD line. So you know the drill. There is probably a jog move needed, up, then back down again to a matching price low, to allow the MACD line to go possie d, that will be the bottom, say a couple candlesticks out, say 2 to 4 hours, so that would be this afternoon or tomorrow morning. The SPX daily chart indicators, however, remain weak and bleak. So the stock market will likely bounce starting this afternoon or tomorrow morning due to the 2-hour then up for a few hours say tomorrow and Thursday, then likely roll over to the downside again to print more lows for the stock market going forward.

SPX Daily Chart; S&P 500 Sets Record for 402 Trading Days Without a -5% Selloff

The last selloff in excess of -5% was back in June 2016 when the SPX fell nearly -6% during the Brexit drama. But the central bankers led by the BOE during this event, promised more easy money, as usual, so stocks quickly recovered and continue on to joyous highs month after month as global traders drink Fed wine, BOE gin, ECB champagne and BOJ sake buying stocks at the ask without fear or worry.

The all-time record high for the SPX is 2872.80 on 1/26/18. Price is at 2762 so that is a 110-handle pull back off the record top, -3.8%. So the bears will need to growl more if they plan on creating a selloff in excess of -5%. Sooner or later it will show up. A -5% drop off the record top would be 144 points, so the bears need another 34 points, which would take the S&P 500 price down to 2729.

The prior record was a streak of 394 trading days without a -5% selloff which occurred from late 1994 into July 1996. The beat goes on. 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 12:54 PM EST: Stocks dropped like a rock with the Dow down 355 points after the opening bell then recover then soften again during sandwich time. SPX LOD 2733. The S&P 500 dropped 140 points off the record top at 2873, -4.9%. Close but no cigar. The S&P 500 has not made a -5% correction in 402 days and counting. The Dow all-time high is 26615 and the LOD is 25165. INDU, or DJI, has dropped 1450 points off the record top, a fall of -5.5%. So the blue chips are hit harder than the broad market.

Note Added 1:17 PM EST: Stocks are dropping like a stone. SPX LOD 2723. Bingo. Sound the Seven Trumpets! The S&P 500 is down -5.2% off its record top, 149 points, and finally makes a -5% correction after 402 trading days the longest record in stock market history.

Superbowl Indicator Predicts a Bullish Year for Stocks

Millions of Americans were excited about the big football (American football) championship game between the New England Patriots and Philadelphia Eagles last evening. The Superbowl Indicator is watched by traders as a novelty; no one puts money on it but it is something fun with a surprising positive track record.

Simplifying the indicator, since football teams have changed leagues over the years, if the American Football Conference (AFC) team wins (Pats), the stock market should have a bad year. If the National Football Conference (NFC) team wins (Eagles), the stock market will have a great year.

Ironically, the Superbowl Indicator has a track record of about 75% correct. However, the indicator has struck out the last two years. The Pats won the Superbowl last year but the stock market printed one of the best years ever. The year before that the Denver Broncos took the top prize, another AFC team, but the stock market rallied that year as well. Humorously, the central bankers are the third man on the field.

Thus, take the Superbowl Indicator with a grain of salt. Nonetheless, the stock market bears wanted a New England win while the bulls wanted Philadelphia to take the top prize. The big game was very exciting.

The Philadelphia Eagles defeat the New England Patriots 41-33 and receive the coveted Lombardi Trophy. The NFC team wins so the Superbowl Indicator predicts the stock market should be bullish this year. Bears moan. Bulls cheer. The Superbowl Indicator, however, is not helping the US futures that remain negative. S&P -16. Dow -213. Nasdaq -38. Russell -12. VIX 18.69. The VIX is at the highest level since November 2016.

NYHL NYSE New Highs-New Lows and NYA NYSE Composite Daily Charts

The big drop in the stock market ushers in lots of new lows for stocks that greatly overcome the new highs. The uber low numbers are consistent with a bottom in the stock market like August and November. The bulls should be able to stage a relief rally 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.

LIT Lithium ETF Weekly Chart; Neggie D and Rising Wedge Spankdown

LIT was lit up like a Christmas tree for two years pounding out record highs month after month. People have chased into lithium believing in the need for batteries. Timmy Tech was bragging at the water cooler as the year began that he placed his life savings in LIT since it is guaranteed to go higher because of the need for batteries. Timmy does not talk about LIT anymore although he says now he is a long term investor.

The top was an easy call with the neggie d (red lines), overbot conditions and rising wedge. The collapses from rising wedges can be quite dramatic. LIT receives the neggie d spankdown. Anyone believing in Elon Musk and the tech industry's need for lithium batteries, that bot LIT from last September to now, has lost money.

The indicators are weak and bleak wanting to see more lows in LIT going forward on a weekly basis. Price may bounce since it is at the lower trend line of the blue channel but the downside should resume. Perhaps the demand that everyone says is guaranteed this year for electric cars and gadgets and electronics of all shapes and sizes, may be in error.

As Nirvana's classic Lithium song refrains, "I'm not gonna crack." Well, lithium cracked. 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.

TYX 30-Year Treasury Bond Yield Weekly Chart; Potential Bull Flag

Here is some bond drama. The 30-year yield moved above the 3% level last week for the first time since last spring. The blue lines show a potential two-leg bull flag pattern. The first leg is the up in yield from 2.1% to 3.2% that is a 110 basis point rise. Then yield stumbles and bumbles through a sideways consolidation pattern with a slight downward bias. This is textbook behavior for a bull flag.

If yield fulfills the bull flag and the second leg continues higher from 2.65% it will target 3.75%. The late 2013 and early 2014 highs in yield are at 3.75%-4.00% which would be the target area should the bull flag play out for the weeks and months ahead this year.

The first test for yield is the purple line which is the highs from a year ago at 3.2%-ish. Those looking for inflation and higher rates will cheer if the 30-year travels above 3.2%. Note, however, that currently the red lines show that the indicators are nowhere near the prior highs from one year ago. If yield breaks out above 3.2%, those red lines become negative divergence and hamper any upside in yields.

The short green lines show long and strong strength in the VST time frame. This is carrying yield higher currently. The chart will have to be monitored going forward to see how it plays out from the inflation and deflation perspective. Keystone is expecting inflation to remain Godot. The 30-year yield will likely overtake the 3.20% level but will likely stall after that and travel through the year sideways. If the stock market sells off this year, people will be flocking into Treasuries which will keep yields low.

The forecast would be for a move to as high as 3.30% over the next month or two but then yields should relax lower again and likely travel through 2.7%-3.3% into the end of the year.

What sometimes happens with bull flags is it will peter out and keep moving sideways for a few more months but eventually does move higher towards the second leg target but perhaps the 3.75%-4.00% area is something more on tap for 2019. It will be easier to tell more after a month or two 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.

AAPL Apple Monthly Chart; Overbot; Rising Wedge; Negative Divergence; Upper Band Violation

Keystone has been describing the topping process with Apple over the last few months. The AAPL monthly chart is looking bleak. Apple is cooked. Stick a fork in it. Humorously, anyone that took their Christmas and Hanukkah money and bot AAPL stock are now -10% poorer. AAPL is negative on the year.

The negative divergence (red lines) is universal across all indicators. The RSI and stochastics are coming off overbot levels. Ditto money flow so they are agreeable to a downward path ahead. Price violated the upper band so the middle band, the 20 MA, at 139, and rising, is on the table. The rising wedge is bearish and price is beginning to collapse out the bottom.

The MACD line has that tiny sliver of bull juice remaining but this may only be enough fuel to create a short-term recovery rally for a few days or week or three, but price would be expected to roll back over to the downside due to the ugly neggie d, rising wedge and overbot conditions in this monthly time frame. From the long-term perspective, the best years for Apple are in the rearview mirror.

Since this is a monthly chart, you are seeing Apple's swan song after those many years of upside joy. It's all over but the crying. Of course Apple will be a dominant company for years to come but the stock price has peaked and is rolling over on the monthly basis. Apple will create a negative drag on the broad stock indexes.

The negative divergence on the weekly chart spanked AAPL lower in this near term. If you are in AAPL on the long side, the most prudent path forward is to sell it on the bounces going forward. Apple is expected to trade sideways to sideways lower for the months and years forward. CEO Cook will likely feel pressure as each month ticks by and the stock price seeps lower. 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.