"Peloton's! Peloton's!" It is funny to hear the sweaty announcer on the Peloton stationary bicycle television commercial yell this proclamation. It sounds like 'pelicans' which are shlumpy birds that eat garbage. The new PTON IPO, that has not even traded long enough to have a 20-week moving average as yet, crashes -9.1% today, although from record highs. Peloton's holiday television commercial has created controversy.
In the tv ad, a wife or live-in honey receives a Peloton stationary bicycle for Christmas from her husband, or boyfriend. As all men know, any male with half a brain, you do not give your honey exercise equipment for a gift. If you are that stupid, you will be sleeping with Fido in the garage for a few weeks. Some folks think the commercial is sexist. Why wasn't the man given a Peloton? Why does the woman always have to lose weight and get in shape? Viewers also criticize the Peloton ad for showing a skinny runway-style model receiving the bike. She does not need any exercise; she needs a meal. The commercial receives a bad rap on social internet so the stock is taken to the shed out back and beaten with a bicycle chain; PTON plummets -9%.
It is surprising to see PTON price take off like a rocket up that green channel which is trying to close in and become a rising wedge. From 21 to 37 is a +76% rally in only six weeks. Wow. The Wall Street criminals made a lot of easy money on this one.
Peloton receives a lot of publicity over the ad and the company believes that the controversy will not hurt its holiday sales. Company executives say plenty of Peloton's will be under the Christmas tree in three weeks and the ad will not matter. One investment house downgraded PTON but another provided an upgrade.
What excitement over a $5,000 clothes hanger. Consumers, with good intentions and high goals, purchase stationary bikes, treadmills, elliptical's and other contraptions that all end up as clothes hangers. The ony people that can buy this huge equipment is folks with big homes. The hot-shot young crowd must think Peloton is the best thing since sliced bread but you can pay less than five hundo for a stationary bicycle or treadmill up at WMT and hang your clothes on them just as easy.
The real funny part is that people pay $60? a month to use the Pelotin. Your wallet sure does lose the weight. It is reminiscent of the silly dotcom bubble days with Webvan and Pets.com. We are in the silly stage of the stock market top.
What most of you young people do not understand is that a recession is on our doorstep and all your lives are about to seriously change for the next couple years. Prepare yourself. Once a spouse loses their job in the months ahead, you are not going to be throwing $60 bucks away on Peloton per month. Keystone can hear the young folks saying "Okay, boomer", but older folks will scratch their bald heads and wonder what is the need for all that exercise equipment fanciness. Go out and run around the block for free. Get some fresh air instead of sucking in formaldehyde fumes and chemical vapors from cabinets and carpets in your sealed workout room, with your Peloton.
On the PTON daily chart, price peaks on Monday at 37 and tanks today to 33 the bottom of that green trend line. The red lines show overbot RSI, stochastics and money flow which conspire to create the spankdown today. However, the RSI, MACD and money flow all made higher highs with their indicators as price made the higher high. That says price should come back up for another higher high. The wildcard is this television commercial trouble and how much damage it may create.
Peloton is to have rumored to pull the ad but it is still running this evening. They may let the ad play since that is their target demographic; young, hip, skinny, healthy, athletic folks with money. They are probably frantically filming a new ad around the clock now, to release it as fast as possible, where the husband receives the Peloton instead of the pretty and skinny babe. Instead of a Peloton, both men and women need to do pushups to lose weight. They need to push themselves up and away from the kitchen table; this is the best way to lose weight.
Considering the Peloton business model, a stationary bike business, perhaps Keystone does not understand all the intricacies to be fair, there are probably many traders willing to short the stock, but that may lead to disappointment as seen with the goofy behavior in TSLA stock. Peloton is similar to Soul Cycle only you stay at home and do not have to smell everyone's sweaty stink at the gym.
As odd as it is, the PTON daily chart wants to print another higher higher in price and it would not be considered a short until the chart indicators negatively diverge against the higher high in price. If you are adventurous, it may set up as a short next week. Keystone will likely not play it long or short since it is a goofball company with a goofball service. "Go Peloton's!" Hahaha. That's funny. Keystone hangs his clothes in the closet so he does not need a stationary bicycle or treadmill. 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 Wednesday, 12/4/19, at 2:11 PM EST: Peloton is fighting back at all the naysayers about its ad proclaiming that 'they are disappointed in how some have misinterpreted the spot' according to a CNBC article. They are dumb; the number one rule of retail is that you do not insult your current or prospective customers. Interestingly, PTON had already recovered and was up over +5% in this morning's trade but the doubling-down by Peloton defending the skinny girl ad, reversed the stock and it is now down -5.6% on the session adding to yesterday's drubbing. Poor PTON is getting beaten with its own bicycle chain.
Note Added Wednesday, 12/4/19, at 4:06 PM EST: PTON finishes down -1.6% at 32.95. LOD 31.22. Go Peloton's! Go pelican's!
Note Added Saturday Morning, 12/7/19, at 9:26 AM EST: The Peloton drama continues. The actress in the ad at the center of the controversy is Monica Ruiz now dubbed "Peloton Wife" and "Peloton Girl." That is hilarious. PTON stock crashed -7.4% this week to 32.63; the stock had collapsed as much as -15% before recovering late in the week. PTON was up on Monday and then collapsed due to social media's criticism of the ad, printing three black crow candlesticks Tuesday to Thursday, and then a rebound on Friday. Peloton says the ad will not impact holiday sales. At least that is what they are hoping. Go Peloton's!
Note Added Wednesday Morning, 12/11/19, at 6:53 AM EST: The Peloton drama continues. Social media continues to talk about the television commercial with the skinny needy chick. Management says all is good but investors are becoming more agitated and nervous about the stock price. PTON dumps -6% in the Tuesday trade to 32.78, overall still hanging in there. The 30.7-32.2 support zone is very strong and should hold through the end of year, however, if it does not, look out below. Maybe customers are rethinking the idea of spending thousands on a clothes hanger for the bedroom when the closet works fine. PTON is praying for a Santa miracle to prop it up into the new year. Peloton Wife needs to start peddlin' faster.
The SPX drops below the 200 EMA on the 60-minute chart at 3084 ushering in a VST (very short term; hours and days) bear market. All Hades breaks loose. The negative 200 EMA cross on the 60-minute now confirms the negative 8/34 MA cross on the SPX 30-minute chart. Hence, the bulls are slapped and beaten. Copper sinks. Volatility pops with the VIX above 17 which is above its critical 200-day MA and Keybot the Quant algorithm's key level at 15.11. Stocks collapse. As Bob Dylan would say, "It's All Over Now, Baby Blue."
Now that the 200 EMA on the SPX 60-minute at 3084 has failed; it's ovah. Equities will fall like rocks and a -5% pullback is on the table. The bulls must push the SPX above 3084 to save the day and stop the imminent carnage. The chart is setting up with possie d. You see the MACD line is weak and bleak, and the histo, so price needs another two to four candlesticks, a jog move, up, down, or up, down, up, down, to place a matching low and set the MACD up with possie d. So the S&P will bounce, say, in about an hour or three.
As the SPX comes back up, watch the 200 EMA at 3084; it is for all the marbles. If the back kiss is successful (for bears), the S&P 500 will collapse and potentially accelerate wildly lower. If the SPX comes up for the back test, and then keeps on moving higher and recovers above 3084, the stock market bulls will be fine.
Price has violated the lower band so the middle band at 3127, and dropping sharply, is on the table. Bears need to keep the SPX below 3084 and they will create bloody market carnage and misery each day ahead. Bulls need the SPX above 3084 to start building on a strong relief 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.
Note Added 11:35 AM EST: The SPX is down an ominous 36.66 points, -1.2%, to 3077. VIX is at 16.93 retreating off the HOD at 17.99 which was one penny shy of an 18-handle. For lower lows to occur with stocks, higher highs must occur with volatility. The central banks are in there with their jack boots on the throat of volatility trying to get things under control. Treasury yields are; 2-year 1.52%, 5-year 1.52%, 10-year 1.70%, 30-year 2.15%. The 2-10 spread is 17.5 bips. The 2's-5's are basically inverted again.
Note Added 11:44 AM EST: The SPX is down 32 points, -1.0%, to 3082. VIX drops to 16.44; it is choked lower by Jerome and the gang, so equities pop. The chart indicators on the SPX 60-minute are all positively diverged except for the MACD line so a down-up move with the candlesticks will place the bottom in this 60-minute time frame; so the bottom should be in say in one or two hours, let's call it later this afternoon. The move higher will then begin and the underside test of the 200 EMA at 3084 will dictate who wins going forward. Price is at 3080 now so the bears will need to fight hard to keep it below 3084.
Note Added 12:02 PM EST: Today has lots of moving parts. The SPX 2-hour chart displays positive divergence with the RSI and stochastics indicators, as well as oversold conditions, so this supports the bounce that will be coming for the 1-hour chart. However, the 2-hour shows weak and bleak MACD line and ROC wanting to see a lower low in the SPX in this time frame. Thus, mixing the one and two-hour charts together and sprinkling on some magic dust, the SPX should bottom on the one-hour chart this afternoon. Price will likely come up and test the critical 3084 level, and fail, due to the weak and bleak indicators on the 2-hour. The SPX will then drop away from the 3084 but about four of the 2-hour candlesticks out, say in about 8 hours, which would be tomorrow morning, would be a bottom for the SPX in the 2-hour time frame. This will likely be a more solid bottom and may have a better chance to come up and attack the 3084 resistance. Markets are moving fast and will continue that way today and tomorrow. Note that Keystone's 80/20 Rule works again. 8's lead to 2's and 2's lead to 8's so the failure of SPX 3120 opened the door to 3080, which occurs. The 3082 opens the door to 3078 which occurs. Copper -1%.
Note Added 1:19 PM EST: The SPX is down 29 points, -0.9%, to 3085, one point above the critical 200 EMA on the SPX 60-minute chart at 3084. Even though bloody and bruised, the bulls cheer since they have regained the critical 3084 battleground. The SPX will probably be spanked back down for a potential more healthier VST bottom to be placed tomorrow (as discussed above). The SPX tags 3086 so the bulls are starting to puff their chests out. The fifth 65-minute trading segment of the day begins at 1:50 PM EST and the sixth and final 65-minute segment of the trading day begins at 2:55 PM EST. The stock market may experience inflection points when these time segments switch over.
Note Added 1:27 PM EST: The SPX is at 3086. The bears are trying to beef up the resistance and hold the line at 3084-3086 and push price lower. Bam. Comrade Powell and the gang jam volatility lower smacking the VIX down to 16.02, check that, bloop, 15.97, so stocks rally. The SPX recovers to 3087 starting to put distance between itself and the critical 3084 level. The Fed members are huddled around the flat screen in the conference room at the Eccles Building and shout a cheer of joy as stocks slowly ramp higher. SPX 3088. Herr Powell and the gang call the local pizza joint for a delivery. VIX 15.94.
Note Added 2:18 PM EST: Price pulls back to the key 3084 and may be sticky around here the remainder of today and tomorrow morning. VIX 16.34. It is difficult for the corrupt central bankers to keep the VIX beachball underwater. The bottom in the VIX at 15.85-ish, and the drop off the day's high at SPX 3090, both occur during the handover from the fourth trading segment to the fifth between 1:45 PM and 1:55 PM. Watch that 2:50 PM to 3:00 PM time slot for potential market excitement.
Note Added 2:23 PM EST: The SPX is down 30 points, -1.0%, to 3084. VIX 16.32.
Note Added 7:05 AM EST: The SPX finishes down 21 points, -0.666%, to 3093. The 200 EMA on the SPX 60-minute is 3084 so the bulls are in control for the VST. VIX 15.96. The bears must push the SPX below 3084 pronto or they got nothing. The MACD is weak and bleak on the SPX 2-hour so price likely needs to come back down tomorrow to the sub 3080 area and that may place a bottom in the VST. The battle for 3084 continues.
Time marches on. A few years ago, as the inflation talk ran rampant, Keystone told yinz that in a few years, all the inflationists will disappear and everyone will be resigned to the fact that low rates and low inflation, disinflation, is here to stay for the foreseeable future, many years ahead. Honey, we're home. Keystone has been in the deflation and disinflation camp for many years and everyone has finally come over to the house and joined him for the festivities. Well, that tells Keystone it is time for him to think about slipping out the back door and starting a new party down the street.
After over one-decade of obscene Keynesian money-printing by the Federal Reserve, inflation is finally appearing in the distant sunrise. Do not look for any big bump higher in inflation or yields over the coming months, however, yields should only bounce along the bottom from here on out and as the months, and year or two play out ahead, begin lifting, and then taking off firmly with inflation 2022 and on.
The jury remains out over the coming months and year or two as we enter into and live through a pending recession so the expected inflation behavior may be delayed for another year or two as 25% of Americans are handed pink slips. Things will likely become quite ugly, worse than the 2008-2009 Great Recession, in the weeks and months ahead, and a class war will begin in the United States that will continue for many years forward.
The gap between rich and poor is the widest in 50 years. America is the land of the have's and have not's. The American Dream has become the American Joke; few talk about such lofty aspirations anymore. The central bankers are the market and it is only a question of whether they can save the day again when a massive stock market selloff occurs.
Market participants, strategists, analysts, traders, investors and money managers have been calling for inflation to occur since late 2009; all were wrong. Former Fed Chairman Bernanke, Helicopter Ben, implemented QE 1 (quantitative easing) in March 2009 to save the stock market and protect America's wealthy class (that own large stock portfolios). Fed members are rewarded for their loyalty to the Wall Street investment banks once they leave public office by receiving lucrative speaking fees to appear at token luncheons. Such is the crony capitalism system. No wonder it is on its last legs.
Anyhoo, to circle back around to the inflation theme, or more correctly the low inflation and disinflation theme, the 30-year bond yield chart above tells the story. Remember, US Treasury notes and bonds are in an epic three-decade rally (higher bond and note prices and corresponding lower yields).
Keystone calls the end of the massive three-decade bond rally. Keystone's call coincides with the universal consensus on Wall Street that low inflation will continue for many months and years forward (they were wrong saying inflation would appear between 2009 and now and will likely be wrong predicting continued low inflation and rates for the future).
The 30-year yield chart has and is bottoming out and will move flat and then sideways to sideways higher for yield for the many months and years ahead. The chart does not require yield to come back down again for a lower low unless something very bad happens in the economy or markets that will have to be priced-in. The thin blue lines show a steep downward channel that then mellows out into the softer green sideways channel with a downward bias. Yield popped off that lower green support line.
The chart indicators are in universal positive divergence (red lines). In addition, the RSI and stochastics are oversold needing to move higher. Yield is extended below the moving averages needing a mean reversion higher. Look for a potential cross on the Aroon that would pave the way to higher yields.
The ADX shows that for the dramatic collapse in yield this summer into the Fall, at 27, it is not registering as a strong downtrend. The last tiny sliver of a strong trend lower for yield was the move lower during 2011 into 2012 but very short-lived. All these parameters tell you that the 30-bond yield has bottomed on a long-term basis. If you look back to prior years, you will see the ADX above 30, indicating a strong trend lower, for yields each time they flushed lower during the years prior to 2012. That's when things changed. The ADX petered out over time and now says the trend lower in the 30-year bond yield has NOT been a strong trend lower since 2012.
The expectation is for multiple months of sideways to sideways higher yields. The wildcard is any potential stock market selloff and recession. Today stocks are selling off so some money seeks perceived safety in Treasuries driving yields lower. Thus, the yields may bounce around the lows into next year but as per the chart above the bottom is in for the 30-year yield and it should not take out that low point just under 2.0%. The only caveat is if some black swan or major market crash occurs since folks will be buying Treasuries like madmen driving yields lower which may take out the 2% level, and then the chart will price that action in.
Things are buttoned-up down there at the bottom a gap is at that 2.18%-2.19%-ish area so that is where yield may want to go down to for a look. The way to look at it is that Treasury yields will chop sideways for several months perhaps through 2020; yields moving lower but not taking out the low above unless the economy is in very dire straits in the future. Yields are expected to move sideways to sideways higher for the months and years ahead. Credit goes to A. Gary Shilling the only analyst on Wall Street that correctly called the 30-year bond rally and corresponding deflationary impacts.
The 30-year yield will likely chop sideways, likely moving down to 2.18%-ish in the near-term, and then up to 2.45% and 2.60% likely next year some time, but favor a sideways chop through 2.2%-2.8% in 2020 overall. 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 10:17 AM EST: Stocks are tanking the SPX losing 35 points, -1.1%, to 3078. Thus, traders are seeking the perceived safety of notes and bonds so the 30-year bond yield drops to ..... wait for it........ wait a bit longer for it........ 2.19%.
Note Added 10:31 AM EST: 30-year yield 2.18%.
Note Added 10:55 AM EST: 30-year yield 2.16%.
Note Added Wednesday Morning, 12/4/19, at 8:11 AM EST: The 30-year yield bumps around the 2.16%-2.19% area now at 2.19%.
Note Added Wednesday, 12/4/19, at 11:54 AM EST: 30-year yield 2.24%. So far, yield comes down to play around that 2.16%-2.18% area and then move higher again.
The bears came to play today stabbing the bulls in the eye with a stick and kicking them in the knees. 90 minutes into trading, the SPX dips 28 points, -0.9%, to the 3113 palindrome. The overnight S&P futures have reversed about 40 points to the downside. Futures were joyous overnight after the PBOC said they will remain accomodative with loose monetary policy despite positive manufacturing data. The sick central banks cannot help themselves. They pump the global stock markets whether the economy is sick or healthy. Global equities are on a permanent easy-money intravenous drip and hooked on central banker liquidity. The central bankers are the market.
So everything was hunky-dory in the early morning hours until President Trump imposes tariffs on steel and aluminum imports from Brazil and Argentina. S&P futures lost about 10 handles but remained a hair positive when the 9:30 AM EST bell rang. Commodities were goosed higher to try and save the day but that rolled over. Copper is negative. Stocks roll over lower.
At about 10:30 AM EST, Commerce Secretary Wilbur Ross, after chugging down a bottle of Geritol, says the US will implement tariffs on 12/15/19 if a deal is not reached. The stock market sinks on this news bite that comes from a Fox TV interview.
Keystone's SPX 30-Minute Chart with 8/34 MA Cross Indicator shows that the 8 MA has stabbed down through the 34 MA ushering a VST (very short term) bear market. However, Keystone's SPX 60-Minute Chart with 200 EMA Cross Indicator shows that the S&P 500 remains 33 points above the 200 EMA at 3082 maintaining a VST bull market. The 60-minute says the bulls are in charge over the VST but the 30-minute says the bears are; one of them will flinch.
Either the 60-minute fails into the bear camp proving that market carnage is coming bigtime, or, the 30-minute turns bullish with the 8 crossing above the 34 which will push the stock market to more joyous new highs. If the 200 EMA on the SPX 60-minute at 3082 fails, it is over for the stock market (equities are likely heading at least -5% lower).
Looking at the 60-minute chart, you see the W pattern bottom. These are typically powerful bullish indicators and you can see the rally that followed. As a short term trader, and if you like to be a bull most of the time, simply scan charts for W pattern bottoms. If a W forms below the 50-day MA or 200-day MA that gives the stock or index more upside power and if the W forms below both the 50 and 200 (on the daily), it has big-time bullish power that it is about to unleash. 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 11:14 AM EST: The SPX is down 30 points, -1.0%, to 3111. The VIX spikes to 15.24. Ho, whoa, ho! Keybot the Quant algorithm calls out 15.11 as the key bull-bear line in the sand. In addition, the critical 200-day MA is at 15.10 so this level is for all the marbles. If the VIX remains above 15.11, stocks are toast. Standby. This could get messy. Copper -0.4%.
Note Added 11:25 AM EST: The VIX slips back to 14.90. Nothing to see here folks, move along, move along. The SPX is down 25 points, -0.8%, to 3116. Copper flat.
Note Added 11:33 AM EST: Here comes the VIX up to 14.98 ready for another look at the 15.11 bull-bear line in the sand. Keystone is strapped into his Office Max chair, with the worn arm rests, ready for any fast-moving action that may occur. Whoa. VIX 15.10. Here we go.........
Note Added 11:36 AM EST: The bears are all bluster. The VIX falls back to 15.01. It is on a silver platter if the market bears want it. All the bears have to do is reach out and take it. VIX 15.07. Whoa, ho. 15.14. Here we go, ..... checking the straps and helmet.... okay, let's do this........
Note Added 11:38 AM EST: Pssffft, ffftttt. Volatility fizzles again the VIX drops to 15.05. The bears do not have the juice as yet; all they need is a few pennies more of VIX upside and market carnage will begin. The bears did not eat their Wheaties this morning. The drama increases. VIX 14.97. The bulls are trying to jam commodities higher and volatility lower to save the day today. So far they are succeeding in holding the losses at bay. Looking at the commodity action, the bulls may be having trouble goosing them, so the VIX, volatility, may come back up for another try at 15.11+. VIX is at 14.94. Stealing some data from the Keybot algo, if the GTX (commodities) move above 2446, the bulls win going forward. If the VIX moves above 15.11, it is over for the stock market. Who will win?.
Note Added 11:48 AM EST: The SPX is down 24 points, -0.8%, to 3117. VIX is at 14.78 dropping to the lowest price in an hour so the bulls breathe a sigh of relief. The bears hopes for more downside are starting to vanish; bears need higher volatility. Copper -0.1%. GTX is at 2437. Keystone's 80/20 Rule says 8's lead to 2's and 2's lead to 8's. Thus, if the SPX closes below 3120, that opens the door to 3080.
Note Added 12:41 PM EST: The SPX is down 27 points, -0.9%, to 3114. VIX is at 14.76 and rising after it played around with a 14.33 low a few minutes ago. Copper -0.3%. GTX 2435. There is a Mexican standoff in progress between the bulls and the bears each side is waiting for the other to flinch. The bulls smack the bears across the face; the VIX drops to 14.61.
Note Added Tuesday Morning, 12/3/19, at 9:10 AM EST: The bears win out yesterday with the SPX puking 27 points, -0.9%, to 3114. VIX finishes at 14.91 teetering at the 15.11 deciding line. Copper finishes flat still deciding which way to go. Overnight, copper futures fall apart down -0.8%. The VIX leaps higher above 17 to 17.02. President Trump said the US-China trade deal may be put off until after the November 2020 election. The futures markets are harpooned by the comment. Of course futures tank with the S&P's down -28 with the opening bell for the regular session minutes away. It is a good think Keystone remained strapped into his Office Max office chair all night long; the chair with the squeaky wheel and worn out arm rests. The new helmet may also come in handy for today's price action. The face shield is lowered to prepare for today's drama.
Keystone's Eclipse Indicator is an obscure, esoteric-style market signal that identifies potential significant market topping areas based on eclipses. Metaphysically, humans tend to behave oddly one month before and/or one month after an eclipse cluster, which sometimes correlates to stock market tops.
For this year, an eclipse occurred on 1/21/19 so a potential top was predicted for either 12/21/18 or 2/21/19 give or take a couple weeks from each date. The eclipse signal identified the December 2018 weakness which took all of the negative energy so the early March pullback was paltry.
An eclipse cluster occurred on 7/9/19-ish so a potential top was predicted for either 6/9/19 or 8/9/19 give or take a couple weeks from each date. The June date was a bust as stocks chose to run higher but perhaps the negative energy was saved for the second date, late July-early August, which caught the top. The downside in the stock market never gains big-time acceleration because the Federal Reserve and other global central banks always step in to save the day.
An eclipse occurred on 11/11/19, three weeks ago, so a potential top was predicted for either 10/11/19 or 12/11/19 give or take a couple weeks. The October date was a bust as markets were heading higher not lower. Thus, perhaps the negative energy is stored up now for the second target date.
An eclipse cluster will occur 1/2/20, a month from now, so a potential top may occur 12/2/19 (now) or 2/20/20 give or take a couple weeks from each date. The thing that jumps out at you is that the December target dates are overlapping; one at 12/11/19 (red circle) and the other at 12/2/19 (maroon circle) so this early December area, now, in real-time, into mid-month and even Christmas, is very susceptible to a significant stock market selloff. It will be interesting to watch and see if it occurs, or not. 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 Bradley Siderograph turn dates are always interesting to follow. The models use esoteric inputs to arrive at turn dates give or take a few days. Some years, the Bradley turns can do no wrong and they are dead-on and other years the target dates are unimpressive. This year is a mixed bag. The turn date predicts a change in trend, or, in some cases, a super acceleration in the current trend.
Bradley turn dates for 2019:
1/18/19
6/4/19
8/8/19
10/30/19
11/29/19
The January turn date results in a little top and pullback but the rally is in full gear to the upside; this is not an impressive prediction for a trend change turn but price does rapidly accelerate higher after the turn date. The June turn date is dead-on exactly where a market bottom occurs. That turn date was 100% correct. August was another mixed picture in that sideways choppiness, however, the day and days before price bottomed in early August and that is a long rally into the record tops last week.
The October 30 date was a bust as well since a turn did not occur but instead a rapid acceleration. The turn date is actually correct, however, since it may not only indicate the change in trend but sometimes, a wild acceleration occurs in the current direction. This is what happened at Halloween so the Bradley did call out the wild acceleration move higher.
So that leaves us with the 11/29/19 turn date which was Friday, the shortened trading session after the Thanksgiving holiday, and stocks reported losses of about -0.4% off the top. Today, Monday, 12/2/19, the first trading day of December, we see if the bulls can push to new higher highs, or, if the top is in as per the Bradley and down we go. The acceleration move higher is a possibility as well which makes these first couple trading days of the week uber importante.
S&P futures are up +12. VIX 12.63. During the next few hours and day or two we find out the results of the Bradley turn projection.
Bradley turn dates for 2020:
3/17/19
5/11/19
8/19/19
12/2/19
Interestingly, the US presidential election, where the world finds out if King Donny has four more years, is 11/3/19. There are no turn dates exactly at that time but a month after the election the Bradley predicts a turn. Perhaps the month of November will be a confusing mess after the election and then when it is resolved, good or bad, the early December turn date occurs. The Bradley turn date site is linked here and above. 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 new week of trading is set to begin in the States which kicks off December trading. The bulls, with the help of the Fed and other central banks, are driving volatility lower this morning to pump the S&P futures up +12. VIX is down marginally to 12.59. Futures started to ramp higher after the European markets opened at 3 AM EST. Interestingly, copper was up +0.3% to +0.4% overnight but now slips to +0.1%. Commodities and copper are the main parameters controlling broad stock market direction these days.
On the political front, dictator Xi must be going ballistic behind the scenes. President Trump had no choice but to sign the Hong Kong bill supporting the demonstrators since the majority support from both parties in Congress would overrule him. Xi warned the United States for the last five months not to meddle in their domestic affairs but it occurs anyway.
The impact of the Hong Kong bill, however, has steam coming out of Xi's ears. The relationship between Xi and Trump is likely permanently damaged. After Trump signed the bill, which he attempted to keep as a low-key event, the Hong Kong demonstrators began waving the US flag in the streets. In addition, thousands of protesters march to the US consulate to thank the United States for their support. Xi must be livid. Good. He's a filthy communist. Global traders wait for China's retaliatory response against the US for signing the Hong Kong bill.
Economic data out of China overnight is positive showing a slight pick-up in growth. The stimulus programs from the PBOC provide the growth. It is the same in the US. Everyone becomes all excited about encouraging economic data proclaiming that a sustainable recovery is now underway and the all-clear has sounded.
However, after a quarter or two passes, the central bank stimulus wears off and the data droops. These few-quarter central bank-induced cycles have been going on for a decade (since the Federal Reserve started this ongoing sick Keynesian money-printing financial experiment with QE 1 in March 2009) and it is comical to see the learned analysts continually pretend that the growth is real. It is only growth created by another central bank sugar high that wears off after a while. These cycles continue as long as investors and traders have confidence in the central banks. When that is lost, all will be lost.
Today is Cyber Monday typically the biggest, or one of the biggest, internet shopping days of the year. People go to work today but sneak time on their computers for shopping while the boss is not looking. Employers realize productivity will be low in December. The Christmas holiday is 12/25/19 on a Wednesday, mid-week, like New Years. There will be very low productivity, and lots of goofing-off, at US companies during the back-half of December with the holidays landing on hump day. Black Friday retail sales were weak at the malls but robust online. Small-Business Saturday occurred on the weekend. The American consumer (women perform over two-thirds of the buying in the US) is carrying the economy on her thin shoulders.
Tax-loss selling will peak over the coming days which may create negativity in the stock market. The new month begins so new money may enter the market counteracting the tax-loss selling.
The red circles in the SPXA150R and SPX charts above mark the tops over the last year. The tops all occur within days after the SPXA150R peaks. February is a 91 point drop, May a 220 point drop, August was a 198 point drop and September lost 164 handles. The average pullback is 168 points. Throwing out the largest and smallest is a 181 point average drop. What do you think will happen?
The Friday high for the SPXA150R is 77.35-ish so keep an eye on this. If stocks rally today and the SPXA150R moves higher again above 77.35, the bulls will continue the top for a few more days. If the SPXA150R cannot move back above 77.35, the top is in, and correspondingly, the top is in for the stock market. 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 4:44 AM EST: S&P futures +11. VIX 12.64. Copper +0.1%. Gold 1456. Silver 16.93. 10-year yield 1.83%. Yields are moving higher.
Note Added 8:35 AM EST: S&P futures flat. Dow +6. Nasdaq -8. Russell +2. VIX 13.12. Copper -0.5%. Gold 1465. Silver 16.82. 10-year yield 1.83%.
Keystone's proprietary trading quant, the best algorithm on Wall Street, Keybot the Quant, flips to the bear side late in the holiday-shortened Friday trading session at SPX 3142. Commodities failed into the bear camp and copper is hanging on by its fingernails. These two parameters continue to control broad stock market direction over the last few days. Bulls win with higher commodities. Bears win with weaker copper. More information is found at Keybot's site;
Keybot the Quant
The stock market is at an interesting juncture. When the utes roll over from zero to 2 months ahead of the broad stock market, and trend lower, equities will fall like rocks. It will not be a run-of-the-mill pullback like the last decade where the dip-buyer's rush in because it is guaranteed that the Fed and other global central bankers will always print money to support markets and protect the wealthy elite class.
The action in utilities over the coming days and couple-three week period is uber importante. If the utes roll over from here, resuming the downtrend, it is over for the stock market. If utes rally from here heading back up towards the highs in September and October, the stock market bulls are fine and no matter what selloff is occurring in the broad stock market, equities will recover.
The two key parameters to watch with the utilities is the 15-week lookback number, which determines if utilities, and correspondingly the broad stock market, is in a weekly uptrend, or downtrend, and the 50-week MA currently at 801 and rising.
The candlestick on the right-hand side of the chart is in progress since today is Friday and the last day of the week to effect the candle. Counting back 15 weeks is the brown circle which is the weekly close of 831.22. This number only matters today. For next week, 12/2/19 through 12/6/19, the first week of December, counting backwards 15 weeks is the purple circle at the weekly close of 832.03. Thus, if UTIL fails at 832-ish over the next 6 trading days, the stock market is in big-time trouble. Note that the thick blue lines, that show strong price support levels, call out 830 as a key support level. So lump the two together and over the next 6 trading days, the UTIL 830-832 support level is uber important. If it fails, stocks will be falling apart in a serious way.
UTIL is at 853 so the stock market bulls are feeling pretty good about themselves. They have a full belly of turkey, mashed potatoes, pumpkin pike and Fed wine and feel great about the future. Every day is sunshine and rainbows in the US stock market and the month will not end in a November Rain, as Guns 'n Roses would sing (one of the top videos in rock 'n roll history noted for its cinematic imagery and Slash's epic and haunting guitar solo's).
The interesting week is 12/9/19 through 12/13/19. In those few short days ahead, for that week, the 15-week lookback number is at 845.52 (orange circle). Thus, stock market trouble starts in earnest if UTIL slips below 846 during the week of 12/9. With price currently at 853, that is only a few dollars lower. Obviously, if UTIL fails below 832-ish the week of 12/9, the stock market trouble is well underway and by the week of 12/16, stocks will be tumbling sharply lower. All the bulls have to do is keep UTIL above 832 for the next six days and then above 846 during the week of 12/9 and they will be singing and dancing into Christmas.
Tax loss selling typically hits its peak in early December so this may be a drag on the stock market in the coming days. New money typically comes in to start a new month so the first few days of December may have lift trying to offset the tax-loss selling negativity.
The thick blue lines show strong price support at the 818 palindrome and 806 levels. If the utilities are collapsing, the 818 and 806 levels will serve as temporary support on the way down. The very important 50-week MA is at 801 and rising. You can see that moving average perhaps coming up near that strong price support at 806 so that 801-806 support level would be for all the marbles. Think of it as a trap-door. If UTIL is dropping, stocks will be selling off in force, and if price comes down and fails at the 50-week, carnage begins. The trap-door will open and within a half hour or so of this failure will likely see the SPX down 30 handles, for starters. The stock market could potentially go into a crash once the UTIL 50-week MA fails.
Summing up, UTIL is at 853. If the 830-832 level fails before 12/6, the stock market is toast and equities will be tumbling lower in earnest. Stocks will remain buoyant if the 830-832 does not fail before 12/6.
If UTIL loses the 846 level during the week of 12/9, the stock market is toast and equities will be tumbling lower in earnest. If UTIL remains above 846, moving sideways or higher over the next couple weeks, the bears got nothing and the stock market bulls will be fine.
If UTIL is dropping like a rock and takes out the 818 palindrome support, the stock market is in serious trouble and may be headed for a crash. At this time, watch the UTIL 50-week MA like a hawk. If it fails, stocks will be taking out stops like they are not even there with prices dropping drastically. A crash or flash crash would be on the table. The table is set; what part of the menu would you like to dine on in the days ahead? You should be watching utilities every day forward into mid-December. It will tell you the fate of the US stock market in the intermediate and longer-term. 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.
Happy Thanksgiving to all! Beware the tryptophan; you don't want to fall asleep in Aunt Sally's mashed potatoes. The November rally continues higher fueled by Soybean Donny's happy trade deal tweets. The bears have thrown in the towel resigned to eating franks and beans on this Turkey Day. The bulls are celebrating at Itchycoo Park, what great fun it is, the bulls dance while singing, "It's all too beautiful."
For the last two weeks, we have been looking for the top, the elusive Godot Top, since the uber low put/calls, low volatility, record short VIX positions, and other parameters verify the off-the-charts euphoric bullishness and rampant market complacency. Complacency marks a top which did occur, followed by three or four days of downside, however, if you blinked, you missed it. The negativity was gobbled-up by the ongoing US-China trade deal hype.
Traders remain relaxed about all-time record stock market highs since even if equities choose to sell off, the global central banks will collude and step in to save the day as they have for over a decade. Money managers, traders and investors sing Praise and Honor to the Four Horseman of the Perpetual Rally; the white Fed, red BOJ, black ECB and pale PBOC. During any stock market downturn, these modern-day Money God's, that guard the Temple, ride in to save the day to protect the wealthy elite class.
These harbingers of near-term gratification at the expense of long-term capitalism, the central banks, have engineered the longest recovery and rally in stock market history. The world remains awash in liquidity. Easy money fuels stock repurchase programs (buybacks) that artificially send earnings numbers, and equity prices, higher. It is a fantastic world if you are wealthy and own a large stock portfolio. Too bad for the one half of Americans that do not own one single share of stock.
The low put/calls hint at a potential 150 point, or more, sell off on tap, but humorously, it may occur after rising 70 handles. The SPX daily and 2-hour charts lined up with neggie d a few days ago which identified the short-lived top, and now price is higher at new records again (only due to trade news since the chart indicators do not want the SPX to move higher). The SPX, the US stock market, the S&P 500 cash index, prints an all-time high at 3154.26 and an all-time closing high at 3153.63 on Wednesday, 11/27/19, the day before the Thanksgiving Day holiday, in light volume.
The Dow Jones Industrials (INDU; DJI; DJIA), Nasdaq Composite (COMPQ), Nazzy 100 (NDX), the tech sector (XLK) and consumer staples (XLP) all print new record highs. Sound the Seven Trumpets!
The Semiconductor Index (SOX) did not print a higher record high this week thus far; ditto the XSD and SMH. The RUT small caps and trannies (Dow Transportation Index; TRAN; DJT) lag the broad stock market. Real estate (XLRE) and consumer discretionary (XLY) also do not move above their prior highs. Real estate and utes are defensive plays, along with consumer staples.
Utilities (XLU) have not printed higher record highs since late September. This is a big, big deal. Keystone always preaches about the utes. Utilities topped out 2 months ago. If you see utilities roll over and drop from here, it is very likelly that the broad stock market is about to have a religious experience. Watch the utes like a hawk over the next couple weeks. If they fail lower, it is over for the stock market. If utilities rally in the days and weeks ahead, the stock market bulls will be on easy street.
Nothing has changed in the SPX daily chart above. The overbot conditions have opened the door to a move lower. The red rising wedge pattern is ominous. The red lines show universal negative divergence. Price made it to the new highs on light volume and fumes. The SPX nails the upper band at 3153 so the middle band at 3100, and rising is on the table, as well as the lower band at 3046 and rising. Price is way extended above its moving averages requiring a mean reversion. Usually stocks would be expected to be weak the last couple days of a month that went all up. Tomorrow, Friday, is EOM. For the last few days, it is all systems go for the bears but Soybean Donny keeps tweeting every couple hours that the trade deal is almost ready. It is in its final, final, double-quadruple final stage.
King Donny promised that the US-China trade deal is in its "final throes" which lit a fire under markets to the upside. Xi and Trump talked on the phone so the deal looked like a done deal. Comically, in true Trumpian fashion, an hour after waxing optimistically, Donny says he is holding back a deal to get a better deal. Obviously, he continues talking out of multiple sides of his mouth and tells the crowd in front of him whatever they want to hear.
President Trump insinuated that he waits until the team comes up with a deal then he will review it to make a decision. It is surprising that he is not more directly involved. Then again, it is not surprising at all; he is a politician. Donny is employing plausible deniability. If the trade deal blows up, he blames Mnuchin and Lighthizer for not handling things correctly. If it is successful, Donny will brag and bloviate that he directed the process at every turn and of course he will announce it as the greatest trade deal ever known in the history of mankind.
So the stock market prints its joyous highs and then sly ole Donny Boy, hiding in the bushes, the evening before Thanksgiving, quietly signs the Hong Kong bill that sides with the protesters. Dictator Xi told Donny for the last five months to not meddle in Chinese affairs. Again, in true Donny fashion, he signs the bill and says he is doing it to help Xi who probably blew a head gasket when he saw that message.
S&P futures immediately dipped -10 and sat there overnight and on Thursday, Thanksgiving Day, morning are hanging around the -5 to -10 area a paltry drop considering the implications of signing the Hong Kong bill. The thinking is that the bill will not have much impact in the near-term, so perhaps a deal can get done, and then worry about the impact of the bill on Hong Kong and China and US relations down the road.
Trump had no choice but to sign the bill since it has huge bipartisan (republican and democrat) support and his veto can be overridden. Donny took his medicine and signed the bill in the cover of darkness. It was odd to not see Trump hold a gala signing event. He usually demands that his loyal cabinet kneel in a semi-circle around him applauding each stroke of his Sharpie.
China does not celebrate Thanksgiving. Perhaps Donny forgot about that. So the signing of the Hong Kong bill is a direct slap in Xi's face in real-time. 'Hey communist Xi, are you going to take that off of Donny? He wants to fight you in the parking lot behind the stock market.' Equities will be on eggshells, probably into the weekend since the US Friday session is a half day, waiting to see how China retaliates.
Watch that RSI that is trying to sneak out a higher high. That would be bullish for another day or two if the bulls can pull it off. Price has gapped-higher for three consecutive days, however, and the MACD line lags, so the expectation would be that the RSI will stall. As always these days, the stock market direction takes its orders from what President Xi and President Trump say about the trade deal. The chart says down but Soybean Donny's tweets say up.
Perhaps Dictator Xi will be the fly in the stock market ointment going forward? Xi cannot afford to look weak and Donny's signing of the Hong Kong bill and the patronizing words afterwards makes Xi look like a little b*tch. The communist dictator plans his retaliation. 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 7:44 PM EST: S&P futures -4. Dow -35. Nazzy -8. Russell -5. WTIC oil flat. Brent oil -0.3%. Gold 1455. Silver 17.01. Copper sinks -0.9%. 10-year yield 1.78%.
Note Added Friday Morning, 11/29/19, EOM, at 4:56 AM EST: S&P futures -7. Dow -57. Nazzy -25. Russell -6. WTIC oil -0.2%. Brent oil -0.3%. VIX 12.35. Gold 1456. Silver 16.98. Copper sinks -1.1% to an ominous 2.666. Treasury yields are; 2-year 1.62%, 5-year 1.62%, 10-year 1.76%, 30-year 2.18%. The 2-10 spread is down to 13 bips. The 2's-5's yield spread is flat or call it inverted if you want.
