CPC and CPCE Put/Call Ratios Daily Charts; Rampant Complacency Continues Despite Stock Market Pullback Thus Far

Wheeee! Whoopie!  The stock market is down for a couple weeks but the bulls do not care. The party continues uninterrupted. That piddly selloff did not even take out the January lows. Everyone remains in the fearless mode with rampant complacency the rule for 2025 thus far. No one is worried that stocks will go down. They go up forever, right? Traders are standing around with fistfuls of cash waiting to buy even the slightest dip. The put/call ratio charts have not changed much since posted a couple weeks ago. There should be lots more selling ahead in the stock market since there is no panic and fear on display yet.

Market participants are a lot smarter nowadays with the internet and are on to the game to buy on the bad news. When King Donnie, the man-child, melted down in the Oval Office on Friday, stocks dropped like rocks. Equities fell as the orange head turned into a red-faced head embarrassing himself in front of the world. Little Donnie was hiding yesterday licking his wounds, and today, but he will put his big boy pants on and be ready to bloviate again on Monday.

How do you like a host that invites you over to their new white house at the end of the cul-de-sac and when you get there, he berates and hassles you? That shameful Oval Office debacle news likely has more legs into the new week ahead and it will drown out some of the major speech by Donnie on Tuesday night. The orange head wanted the Ukraine agreement to wave that in the air on Tuesday but now he has buptkis. Who plans on wasting a couple hours of their time to watch that dribble on Tuesday evening? Raise your hand so we can see who the idiots are. That is 2 hours of your life you will never get back.

Anyhoo, stocks drop on the Donnie made-for-television Whitehouse drama but then explode to the upside with a huge rally so obscene it would make Caligula blush. People know to buy bad news events nowadays. A key example is wars. When the bombs start dropping and the tracers are lighting the sky, and stocks collapse, buy that horrible news because in a few months you will be happy. Humorously, if the war does not go right, it will not matter, right?

The prior put/call ratio charts helped call the top in the stock market especially since that complacency jived with the negative divergences on the charts. The funny thing is how no one is fearful. The selling over the last two weeks is met with a yawn and a scratch of the buttocks. No one believes that stocks can ever go down again. These folks need a comeuppance.

Well, now stocks are really going to have to be taught a lesson. The stock market is a prize fighter that just got punched in the head a few times. He is a bit dizzy and the one eye is bleeding so his vision is a touch fuzzy, and he feels his legs and knees wobbly, and he is out of breath, but he wants to stay in the fight, let me at 'em, let me at 'em. The other fighter, the put/call champion, knows he already won, and as the stock market gets up again, and refuses to stay down, well, you asked for it, there is no choice but to smack it hard and send it way down so it can finally be taught a lesson.

Some sentiment indicators show people professing bullishness but never believe a human's lying pie-hole, believe what they do, and the put/calls show you that. People may say they are worried and bearish but 10 minutes later they are buying stocks. That is bullish not bearish.

Shorting the rallies is prudent. You should not nibble on any longs or consider jumping into a long position until the put/calls print inside the green circles. That is when everyone's hair is on fire and you can get shares on the cheap. You want to run towards the burning building not away from it like all the people losing their shirts. Good luck. The last of the New York Dolls died; that's a shame. They are one of the early punk rock bands that used to play at CBGB's. Babylon. 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 Tuesday Morning, 3/4/25, at 7:28 AM EST: Stocks puke yesterday since the bulls continue to need taught a lesson for being too complacent. Don't panic! Don't panic! The SPX loses 105 points, -1.8%, to 5850. It's Beautiful! Even yesterday, as stocks collapse, face after face on business television said it is a buying opportunity. People are still not panicked or fearful at all. The big bull party continue without a care in the world despite the SPX teasing the 5700's yesterday. These are some of the same people calling for SPX 7K and higher this year. The CPC edges higher to 0.94 and CPCE is at 0.64. Burp. Belly scratch. Yawn. No one is worried at all, thus, the beatings will continue until moral improves.

Note Added Thursday Morning, 3/6/25, at 4:25 AM EST: Oh my. That is hilarious. The CPC and CPCE put/calls move lower again. Pause for laughter. The level of bullishness is off the charts. The only thing traders are focused on is when to buy the dip. Do not be an idiot, folks. The US stock market has a long way down to go from here. Watch UTIL 983 because if that fails, the stock market will go into a crash profile where a significant crash would be a substantive possibility.

SOX Semiconductors Weekly Chart; Sideways Symmetrical Triangle; Tight Bands

At the end of last year, Keystone posted the SOX chart with the sideways symmetrical triangle. The breakout direction was not known but it appears price is dying. Here is the prior chart if you want to read that first then continue with the saga below.

The purple arrows show tight bands. No, not a tight band, say, like the Allman Brothers with Dickey playing and singing Ramblin' Man. Everyone had a Fu Manchu mustache back then. Pass the bowl, grab your guitar, and play all day, 'cause Dickey holds court, and shows the way. No, not that kind of tight band. Tight standard deviation bands. They are not as sexy and do no make the girls get up and shake their money-makers, but they do tell you that a big move in price is at hand. Tight bands, however, do not predict direction. 'Them Delta women think the world of me'.

SOX appears committed to the downside but let the week ahead play out because if she reverses and wants to rocket launch higher, a la the tight bands, it would have to begin in the days ahead. Otherwise, the downside collapse continues with a long ways down still to come.

The other wild card is if Emperor Jensen or some other AI carnie barker proclaims a breakthrough with chip technology. Or perhaps positive news with the tariff drama. The knife cuts both ways. Negative news in the chip sector will crush SOX to fulfill the sideways symmetrical triangle pattern to the downside.

If you reviewed the prior post for the socks, the same triangle is placed above and you can see that price fails out the bottom. Note the fake-out move higher as the year started but that was a sucka's rally and those poor saps are still clutching their semiconductor shares, along with their pearls, hoping that price will come up again. That is funny.

Using the vertical side of the triangle that is one touch in, is about 1400 points. Let's say the breakdown starts at 5200 so taking 1400 away targets 3800. Well, isn't that special, as the Church Lady would say. Because the 3800 level was talked about in the prior post and that is where the gap fill is needed (orange circle). The 4350-ish level is strong price support. Price violated the lower band so the middle band at 5084 is on the table; it should curl over and begin tracking lower.

The bulls do not want to give up the chip ship. They want to keep sailing the turbulent stock market waters and cannot believe that chips will falter. Semi's are the future. People cannot get enough semiconductors. They believe in the big bull story going forward. All that is fine and cool. But that does not mean the stocks are grossly overpriced, right? In other words, all that fun stuff for a few years ahead with chips is already in the price of the chip stocks. Is it? Keystone is not in the chip space long or short currently. 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 Tuesday Morning, 3/4/25, at 8:41 AM EST: SOX collapses to 4575 yesterday. Ouch. That will leave a mark. The chips are down, in more ways than one.

SPX S&P 500 Daily and Weekly Charts

The stock market top occurs a couple weeks ago and the neggie d spankdown is in progress on the weekly basis that Keystone called as usual. What else is new? There remains a lot of chop suey in markets and the baby Trump theatrics are always front and center. It is a historic day in politics with US President Donnie Trump flipping his orange wig in public arguing with Ukraine President Zelenskyy.

King Donnie, King Crybaby, and Jester Vance, two chest-thumping loud-mouthed bullies, sucker-punched Zelenskyy in the Oval Office today causing turmoil in the markets. Zelenskyy was ambushed by the orange-head that turned into a red-faced dude that lost his temper bigtime. That is the true Trump on full display today, folks; an angry old orange-headed, er, red-faced, man. You can tell the loser by the one who is red-faced; it exposes the fact that he is not used to being in a face to face confrontation and instead a paper tiger.

Zelenskyy remained calm as a cucumber; of course he did. He has been at war for 3 years while Trump and Vance are choosing their cologne and cufflinks each morning. Trump holds a grudge against Zelenskyy for not wanting to get involved in digging-up dirt on Biden a few years ago. Trump expects you to lick his shoes and if you do not he will try to destroy you, your family, and career; retribution is his fave word. Donnie proclaimed that the hallowed, solemn, sacred Oval Office was disrespected by Zelenskyy. That makes you laugh out loud.

Slick Willie Clinton was having sex right there where Trump and Zelenskyy were sitting. Worse, Trump watched television in the Oval Office, cheering for Americans to hurt and maim one another during the Capitol Hill Riot on 1/6/21, and refusing to stop the violence when all he had to do was click his fingers. That is a sick head, and a tarnished disgraced room.

Rise Against the Violence (you know you have a hit song when you play it for the fans for the first time, and halfway through, the audience is screaming the chorus, you cannot buy that, it is magic).

That was sick behavior by Donnie on 1/6/21 but American voters did not care; in truth, they did not want to vote for a cackling communist and felt they had no choice but to hold their nose and vote for the orange-headed bloviating carnival clown.

This dude had the hutzpah to tell Zelenskyy he is the one disrespecting the Oval Office for calling Donnie out for his half-truths and misguided trust in dirtbag Dictator Putin. It is laughable. The Oval Office is just a room in a building, folks. 

Such is America in the final throes of its corrupt and failing crony capitalism system. It is fascinating to watch. Donnie runs home to Mommy at Mar-a-Lago just like Biden would run home to Delaware each weekend. The republicans and democrats are simply two sides of the same corrupt Washington, DC, coin. Get with the program.

Anyhoo, stocks recover into the closing bell but the week remains down. On the daily chart, the standard deviation lines got tight so a big move was on the come and it was down. The tight bands predict a big move but not direction. Price falls through the lower band so a rebound up to the middle band at 6039 is on the table. The SPX comes down to fill that huge gap from January.

Note that price makes the matching low on the daily chart and the indicators are positively diverged (green lines) calling for a bounce, sans the MACD line that remains weak and bleak and would like to see one more price low before there is a relief rally on the daily basis. It depends on Monday. If traders are bullish going into next week the daily chart may continue higher and not look back MACD be damned, or, Monday may be a soggy day for stocks, perhaps Tuesday, where price leaks back down for another look at the lows, and at that time, say mid-week, all indicators are possie d, so the rally on the daily basis will begin again and continue for a few days or week or so. The daily chart is set-up positive.

On the SPX weekly chart, the top call was easy like back in early December. Divergences are the most important metric in technical or fundamental trading; it is all you need to know to make a lot of money. The red lines show the top in the stock market with price making a matching or higher high, and all the chart indicators sloping down, negatively diverged, neggie d, so you knew a smack down was on the come, and voila, it begins and is now 2 weeks along.

Typically, an indicator or two on the weekly chart will chime with the daily chart to help create oomph in the relief rally but there is nothing to pin your hat on with that sick chart so the pending rally in the daily fame may not have much legs. The MACD line and money flow remain weak and bleak wanting to see more price lows occur on the weekly basis. Thus, the expected multi-week pullback remains in progress. Price has not even fallen to the prior low in January at that 5773-ish level.

The SPX violated the upper band so it came down to the middle band at 5966 but not to the lower band as yet at 5765 and rising. The LOD today is 5838 before the huge intraday relief rally.

As always, trading is like playing multi-dimensional chess only time frames are the dimensions not space. The SPX should rally for the days ahead as described above; the bottom is either today or early next week. The rally will be short-lived, however, and shorting the rally is likely the prudent path forward. The SPX should roll back over to the downside to continue the multi-week slide.

The stock market will not bounce with a tradeable bottom until positive divergence forms on the weekly chart and that is likely another 2 to 4 weeks away, simply watch the chart, you do not have to guess. It can bounce before then with happy Donnie, Fed or AI talk, but Donnie is in a nasty mood tonight, the Fed is quiet, and people are tiring of the AI hype without any solid examples of efficiency ever discussed in measurable detail.

She will probably continue trailing lower with fits and starts on the weekly basis down to the 5600-5750 area. That 5700 is awesome price support. If 5773 fails, the 5700 support is next.

The 150-day MA continues sloping higher telling you that the stock market remains in a cyclical bull market pattern, based on this metric. Watch over the coming days and couple weeks to see if the 150-day MA flattens and rolls over to signal the start of a cyclical bear. By definition, this cannot occur until prices start printing sub 5817 so that would be when real market trouble begins.

The weekly chart is an interesting picture. Just think, a couple years from now, if you bring up that SPX weekly chart, it will not be applicable, since price will not be on that chart, it will be below it. 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 Tuesday Morning, 3/4/25, at 7:40 AM EST: Stocks puke yesterday since the bulls continue to need taught a lesson for being too complacent. Don't panic! Don't panic! The SPX loses 105 points, -1.8%, to 5850. It's Beautiful! Even yesterday, as stocks collapse, face after face on business television said it is a buying opportunity. People are still not panicked or fearful at all. The big bull party continue without a care in the world despite the SPX teasing the 5700's yesterday. These are some of the same people calling for SPX 7K and higher this year. The CPC edges higher to 0.94 and CPCE is at 0.64. Burp. Belly scratch. Yawn. No one is worried at all, thus, the beatings will continue until moral improves.

Note Added Monday Evening, 3/10/25: The SPX collapses 156 points today, -2.7%, to 5615. The SPX loses the 12-mth MA at 5664 and the NYA loses the 40-wk MA at 19260 so stocks fall apart. UTIL, however, did not lose the 986 level. Watch it closely since that would usher in Armageddon.

UTIL Utilities Weekly Chart; Utes Teasing Critical 50-Wk MA Trap-Door at 980 that Would Bring on Serious Stock Market Pain

The stock market takes the pipe today continuing its streak of weakness for the last week. The new moon peaks today so it is not surprising to see the bearishness. Stocks are falling and some of that dough flows into notes and bonds seeking perceived safety so Treasury prices rise and yields fall. This is what you see in recessions.

The Fed was worried about inflation the last few months, as they should, but no one was looking at growth that looks like a 98-pound weakling. High inflation and a slow economy is stagflation like the 1970's. Humorously, King Trump is the new Jimmy Carter.

Anyhoo, utilities have not been able to regain the 1030+ level that continues signaling that utes are in a weekly downtrend which means the stock market should be or will be in a downtrend anytime, and it is. Check.

The second key metric for the utilities is the 50-wk MA now at 980.63. Keystone has talked about this key level many times; it is the trap-door. Since UTIL collapses down to 990.42, the bulls have a black hood on and a noose around their neck standing on the trap-door at the gallows. Time to sing, "O Death." The bulls wonder what happened to the days of wine and roses when it seemed like good times would never end?

Well, they did and a major test is about to occur for utes and the US stock market. If UTIL loses the 980 level and the trap-door opens, it is lights-out for the US stock market. The trap-door will tell you if the pull back in stocks is the run of the mill -3% to -5% drop or if it has potential to be a -10% correction, -20% bear market, or far worse. It will be the latter if the trap-door flies open.

If UTIL loses 980 and it remains below, the SPX will drop 20 to 40 points within an hour, and then everything will get far uglier going forward into the Ides of March. "Et tu, Brute?" They all stabbed Julius Caesar, even his friend, Brutus. With friends like that, who needs enemies? Far Behind.

Watch UTIL 980 like a hawk because the fate of the US stock market going forward depends on that number. If the pullback is run of the mill, stocks can recover and possibly still pull-out a half decent year. If UTIL 980 gives way, there is a high chance that the stock market will crash so it will be a lot of fun. If the -10%, -20% and worse drop occurs and we are going into summer, the stock market will probably be sick all year. 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 Friday Evening, 2/28/25: UTIL ends the week at 1005 keeping the trap-door shut, for now. Keep watching it. The 50-wk MA is moving higher so the line of death is at the 980-985 area for next week.

The Keystone Speculator's Housing Market Indicator; UNITED STATES IS IN A HOUSING RECESSION FOR 26 MONTHS AND COUNTING

The US is in a housing recession for 26 months over 2 years along. The homebuilder stocks are in shambles. The Keystone Speculator's Housing Market Indicator signaled the US housing recession starting 12/20/22 with no end in sight yet. Some homeowners turn into home moaners.

The housing recession does not end until the red line moves above the green line. Here is the previous housing recession chart that provides more color on the sordid path over the last few years. Here is a chart of the XHB ETF.

How could the United States not be in an overall recession when there is an ongoing housing recession, labor recession and manufacturing recession? In past decades, that trio of pain would guarantee an overall US economic recession and yet it remains missing and nowhere in sight.

The Godot Recession has not yet arrived despite the weakness in housing, manufacturing and labor. The Federal Reserve provided monetary stimulus and the Congress provided fiscal stimulus during the pandemic that created the 3-year housing recovery. The sales agreements were being signed faster than divorce papers. It was one big house party, a la Stevie Ray, come on in, no need to be knockin' when the house is rockin', there's some bad honky-tonker's really laying it down, come on baby, get out on that dance floor and shake something loose.  Wheee!  Whooopie!

The party ends on 12/20/22 as the housing recession begins. All that is left are used red Solo cups on the floor, a thick cloud of smoke that will not dissipate, a few roaches in the ashtray, empty beer cans in the kitchen sink, and two days of clean-up ahead. It was fun while it lasted but all that is left is a crumbling foundation.

Time will tell if an overall recession hits and if Godot finally arrives. King Donnie is doing his best to bring on that US recession. The destruction to jobs has a psychological impact for every worker and employee in America. None of your jobs are safe. You may be sh*t-canned tomorrow. Guess what? That causes people to not spend as much money anymore. If consumer spending continues slipping away, you will say hello to Godot that arrives with the overall recession and a couple years of pain. At that time you may as well put on some SRV. Pride and Joy.

AMZN Amazon Daily Chart; Scamazon in a Correction

Scamazon is taking the pipe as expected and explained by Keystone when he called the top for AMZN on the daily and weekly basis. Amazon receives the neggie d spankdown that is in progress.

The chart indicators remain weak and bleak wanting to see more lows in price on the daily basis. The stochastics are oversold agreeable to a relief rally and the money flow is flat call it positively diverged. The bottom on the daily time frame is a few days away; the chart will tell you when all the indicators go possie d.

Price came down to fill that gap (orange circle) from early December and there are lots more gaps to fill down below. Remember, the weekly chart also topped-out with neggie d so a down move has started that will be multi-week. In charting, you are playing multi-dimensional chess with time the dimensions so marry the daily and weekly charts together and surmise that price should chop and remain sticky at the lows for a few days but then recover on the daily basis. After a few days or week or so, however, AMZN will roll over to the downside again to continue the negativity on the weekly basis.

A substantive bottom will not occur until the weekly chart goes possie d. Nothing to it. Simply watch the charts. Keystone is not in AMZN long or short currently.

Note that price is trying to find support at the 100-day MA at 212.83 so this is a logical place for a bounce, then slump over again, until all the indicators can go possie d (unless some happy talk from Donnie or the Fed or Emperor Jensen occurs).

The Amazon vans are all over the place these days when 5 years ago you were lucky to see one per month. Scamazon is eating UPS and FDX lunches. The UPS drivers have brown shorts because they are so worried about their future that they sh*t themselves. Both UPS and FDX have fallen into and are hanging around bear market territory down about -20% off the top.

For UPS, the -20% drop off the top from 141.23, on the infamous 11/25/24, is 112.98 and price is at 116. For FDX, the -20% drop off the top from 307.01 on the infamous 11/25/24, is 245.61 and price is at 253.54. FDX peaked on 7/15/24 at 310.77. Wowza, that was many moons ago.

How far down is Scamazon? Is it comparable to UPS and FDX to show that all three are in the same boat and people are simply not buying as much junk, or, is AMZN not down as much showing that they may be taking share, or, is Amazon down more showing a collapse in the consumer?

AMZN tops-out at 242.52 on 2/4/25. A -10% correction is 218.27 and a -20% bear market is 194.02. AMZN is in a correction now at 212.71 and not down as much as FDX and UPS so the consumer is hanging in there still trying to spend money on crap they do not need and Amazon continues taking share away from UPS and FDX.

Ask yourselves, folks, do you really need all that crap from Scamazon? The sweatshirts, leggings, travel mugs, shoes, whey protein powders, baby wipes, cat litter, wireless microphones, countertop ice machines, and surge protectors? When you are out of work in the weeks and months ahead, you will have time to drive down to local shops to purchase the things you need. The only thing that ever stops the great American consumer is a recession. 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 Thursday, 2/27/25: AMZN 208.74. There was a LOD two days ago at 204.16 an important number.

Note Added 3/4/25: AMZN 197.

XHB Homebuilders ETF Daily Chart; Homebuilders Crumble into Bear Market

Homebuilders crumble into the dust, now in a bear market collapsing more than -20% off the top in late November.

Wall Street labels a -10% drop from record highs as a 'correction' and a -20% off the top is called a 'bear market'. These are bonehead metrics but everyone watches them so they are important. They are bonehead because an index or stock may quickly recover after falling below one of these metrics.

Nonetheless, the top in the XHB, the homebuilders ETF, was at 125.88 on 11/25/24, the same day as when the S&P 600 and Russell 2000 small cap indexes peaked. 11/25/24, around Thanksgiving, is a day of infamy.

XHB falls through correction territory and now dabs its big toe into the ice cold bear market waters. Will XHB completely collapse into those cold waters and drown? It is almost March so the spring home construction season will pick-up so perhaps stocks will stabilize. Keystone has been highlighting that the US has been in a housing recession for over 2 years.

The bell tolls for Toll Brothers with TOL taking the pipe. DHI, LEN, KBH, NVR and FERG are all sinking in the same house boat. If you want to look at horrible charts, take a look at that crap. We don't need no steenkin' McMansions. Keystone is not holding XHB or any of the homebuilder tickers long or short currently. 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 Thursday, 2/27/25: XHB 100.72.

Russell 2000 and S&P 600 Small Cap Indexes Daily Charts in -10% Corrections

Small cap stocks bite the dust and are now in a correction. Wall Street labels a -10% drop from record highs as a 'correction' and a -20% off the top is called a 'bear market'. These are bonehead metrics but everyone watches them so they are important. They are bonehead because, as the chart above shows, an index or stock may fall into correction but if you blink it comes out quickly.

At the start of the year, the small caps gave up the ghost and fell into a correction. But by the time Keystone got up to get a cup of coffee, feed the animals, and return, the correction was over. So take the metrics with a grain of salt. There are other gauges that dictate bull and bear markets, in all time frames, far better.

The Russell 2000 tops out at Thanksgiving, 11/25/24, at 2466 so anything below 2219 is a -10% correction. The RUT gave it up to start the year but then gapped up on the happy Donnie talk, Fed escapades, and AI hype. Alas, the little ones could not bear the weight of the market, so their knees buckled and the Russell 2000 is now firmly in correction.

The S&P 600 Small Cap Index is the same dealio. SML topped-out on 11/25/24, the same day as the RUT, at 1560. A -10% correction is 1404 and below. The S&P small caps followed the same path as the Russell 2000 small caps.

What happened to all the jackasses on television that kept telling everyone to buy small caps with both fists? Well, they are laughing since they cashed-out, pumping and dumping their stock to Joe Sixpack, Carlos Bagholder and Melissa Sucka, that always show up to hold the bag. It's fun. 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 Thursday, 2/27/25: SML falls to 1351 and RUT collapses to 2140.

XLP:XLY Consumer Staples/Consumer Discretionary Ratio and SPX S&P 500 Weekly Charts; XLP:XLY at Historic Lows

The XLP:XLY ratio is way down in the cellar so that represents a lot of consumer discretionary buying (denominator) and weak spending on consumer staples (numerator). Hey, nobody said this would involve fractions. Do not worry, the math is basic.

Consumer staples are the things you need in good times or bad and the things you hoard and make sure you have when the economy goes south and people start losing jobs left and right. A little bit like now. You buy toilet paper, and detergent, and hygiene products, and paper towels and stock all that stuff from floor to ceiling in the laundry room. Then you buy food rations and canned goods to stock the pantry to where cans fall when you open the door. In the evening, you open a can of baked beans that you heat over a Bunsen Burner and the family sits around candles talking about past recessions and depressions. You worry about getting ill because you must pay for healthcare in good times or bad. Staples are in demand.

Consumer discretionary is Party Town. Whoopie. Yee-haw! Time to buy motorcycles, Ski-Doo's, Rolex watches, snowboards, new cars, jewelry, fur coats, diamonds for honey and other adult middle-age-crisis toys. Do not worry about tomorrow, live for today! Expensive haircuts are new threads are required for the elaborate parties where money, and wine, flow like water. Real estate is bot at any price. Stocks go up forever. Life is one big party and it will never end. Spend that money on any piece of frivolous crap you see. It is the New Gilded Age. Discretionary items are in demand.

For ratios, or fractions, same-o thing, when the top number (numerator) moves higher, the ratio moves higher. When the top number moves lower, the ratio moves lower. For the bottom number (denominator), when it moves higher, the ratio moves lower. When the bottom number moves lower, the ratio moves higher. Is that clear as mud? That kid in the back looks like he is dizzy. This girl's eyes just glazed over.

The top number is XLP, staples, think PG for hygiene products and diapers (no, the diapers are not for Keystone), and CL, Colgate to scrub your rotted teeth, CLX, Clorox to clean your dirty clothes, etc..., things you need even if times are bad. When people chase these items, XLP prices rise, and the ratio chart will run higher. It means the stock market is in trouble because people are getting bigtime worried. It is time to sell stocks, like now.

When times are great, like when the year started, everyone drunk as skunks, and buying any stock with a heartbeat, no one was thinking about staples, they were thinking about fancy new clothes and shoes, and a new car, so XLP stocks drift lower and the ratio moves lower. Stocks are rallying.

The bottom number is XLY, discretionary, think auto stocks like the new Tesla piece of crap truck, or hotel stocks like MAR for travelers, maybe BBY for folks splurging on electronics since times are great and the good times will never end. When people chase items like motorcycles and other high-end items, XLY prices rise. XLY is in the denominator so when XLY moves higher, the ratio drops. These are good times with stocks rallying.

When XLY drops as all the fun items become less interesting and realization hits that the money should be spent on toilet paper, diapers and canned goods instead of adult toy crap, the ratio will move higher. This represents people becoming worried knowing that the splurging and decadence, in this New Gilded Age not golden age, has run its course and a recession is likely on the come, like now.

The purple line shows that stocks are still headed higher partying on but note that the ratio stopped going down and did not go down as far as three years ago. People know they have splurged too much and are starting to feel that something wicked this way comes and it would be prudent to begin preparing for Hard Times. The DOGE stuff by the Donnie and Elonnie Show drives fear into all workers across the United States that any job, no matter what you do, is expendable and may be gone tomorrow. Are you worried? Donnie and Elonnie were questioning an engineer today asking him what he does for the government.

The XLP:XLY ratio is at 0.38 heading higher. As it heads higher, it means selling is already underway in the stock market, like now. When price crosses above the 85-wk MA at 0.40 all hell should break loose with stocks falling like rocks. The bottom in stocks will occur after the ratio pops above the 85-wk MA and peaks, like the other fractals in the red circles display.

What are you doing? Are you buying something fancy, maybe an expensive kitchen gadget you do not need that will be out on the curb a year from now (XLY)? Or are you cleaning out your pantry shelves and closets to prepare for the stockpiling of paper towels, toilet paper, hygiene products, canned goods, water and other staples because you are getting concerned about the future (XLP)? There goes neighbor Harriet. She just sold all her stocks and now she is driving to Costco yelling out the window that she needs to stock-up on stuff. 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 Thursday, 2/27/25: XLP:XLY is up to 0.39. The plot thickens. Are you still out there buying a bunch of worthless crap you do not need? Buy canned goods instead. XLP is up +5% this year while XLY is down -5% in 2025. People are buying toilet paper, detergent, and diapers and putting the new boat and diamond bracelet on hold. The New Gilded Age from 2003 to present, courtesy of the Fed's easy money making the wealthy class filthy rich beyond their wildest dreams, is starting to wilt.

SPX S&P 500 60-Minute Chart with 200 EMA Cross; Short-Term Bear Market for Stocks if SPX is Below 6047

The 200 EMA on the SPX 60-minute chart, now at 6047, is one of Keystone's fave ST and VST indicators. You can see the bulls have controlled the game a long time. Bears threatened to take the ball away as February started, that was after the FOMC meeting, and stocks took off higher. There is a bunch of Donnie Trump hype upside action in that chart as well.

Price also came down mid-month to test the critical 200 EMA only to bounce again. Last Friday she came down, and the support ruptured, and it is a bigtime negative for the stock market. The bears control the direction of stocks ahead, which is down, as long as the SPX remains below the 200 EMA at 6047.

The bulls will be back in business if the S&P 500 moves back above 6047. If stocks rally, and S&P futures are up +23 Sunday evening on the East Coast, but the SPX is unable to move above the 6047, the rally is meaningless, and will reverse and fall apart.

All that said, and knowing that the 200 EMA on the 60-minute at 6047 is a critical market metric, means price will want to come up for the back kiss at the 200 EMA at 6047. If price begins Monday at 6013, that is +34 points of upside the bulls need to back test the 6047. The bulls are pumping futures tonight so they are going to come ready to play tomorrow.

The SPX will likely come up to 6047 for the bounce or die decision. If price bounces above 6047, it is rainbows, blue skies, flowers, delicious meals, and stocks rallying higher. If the back test of 6047 takes place, and price dies, she will likely start going down extremely hard and fast and there will be carnage on Wall Street.

The Keybot the Quant robot is short and says bears win big if SOX drops below 5119 but bulls win big if VIX drops below the 16.61 palindrome. Dylan and Donovan sitting around playing guitar. It's all over now, baby blue? 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 Thursday, 2/27/25: SPX pukes its guts out down to 5861.

Note Added Tuesday Morning, 3/4/25, at 7:41 AM EST: Stocks puke yesterday since the bulls continue to need taught a lesson for being too complacent. Don't panic! Don't panic! The SPX loses 105 points, -1.8%, to 5850. It's Beautiful! Even yesterday, as stocks collapse, face after face on business television said it is a buying opportunity. People are still not panicked or fearful at all. The big bull party continue without a care in the world despite the SPX teasing the 5700's yesterday. These are some of the same people calling for SPX 7K and higher this year. The CPC edges higher to 0.94 and CPCE is at 0.64. Burp. Belly scratch. Yawn. No one is worried at all, thus, the beatings will continue until moral improves.

Note Added Monday Evening, 3/10/25: The SPX collapses 156 points today, -2.7%, to 5615. The SPX loses the 12-mth MA at 5664 and the NYA loses the 40-wk MA at 19260 so stocks fall apart. UTIL, however, did not lose the 986 level. Watch it closely since that would usher in Armageddon.