The CBOE Skew is elevated again. On the weekly basis, the red circles show tops in the stock market so it appears prudent to tread softly on the long side going forward while bringing on some shorts and buying put protection. The candlestick chart shows price violating the lower standard deviation band so a touch of the middle band, the 20-week MA, at 2036 and dropping, is on the table. The indicators are a mixed bag hinting at sideways action ahead.
The Skew should be respected since its track record is 100% for identifying the tops as the charts indicate. The Skew signals that the stock market will likely print a top this month any time forward. 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: Chart is courtesy of Big Charts annotated by Keystone.
The green circles show the tops in silver prices and the red circles show the bottoms. The low bars on the COT hinted that bottoms were in play for late summer and after price collapsed during September. The positive divergence and oversold conditions shown on the candlestick chart forecasted a rally which occurred. The inverted H&S pattern (pink) shows the head at 14, neckline at 15.5, so upside target is 17 after price broke out above the neck line.
The blue upward-sloping channel is in play. Silver has spiked higher in recent days as the dollar drops. The COT bars continue to expand showing that a rally is in play, hoiwever , the COT bars are consistent where other tops in silver prices occurred. COT chart information lags. There is likely a near term top soon at hand.
The candlestick chart shows negative divergence (red lines) for the indicators but the MACD line is long and strong wanting another price high after a pull back occurs. Price will need to back kiss the 200-day MA at 15.97. Price has violated the upper standard deviation band so a move back to the middle band, the 20-day MA, at 15.27 and rising, is in play.
If you missed the rally in silver the charts urge caution against trying to chase the upside now. Silver should receive a pull back in the near term and take a sideways rest but the weekly chart remains encouraging for more upside. Perhaps silver will stutter sideways at the 200-day MA before plotting another move higher. Silver may move sideways from here with an ongoing upward bias. Price likely needs a rest in the near term to follow the pattern shown by the circles. 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: COT chart is provided courtesy of Cot Price Charts which is an excellent site to find all the commodity COT charts. The chart is annotated by Keystone.
The green circles show the tops in gold prices and the red circles show the bottoms. Remember that Keystone was posting the gold COT a few times a couple months ago as that bottom formed in July-August. The low bars on the COT hinted that a bottom was in play and gold was set to move higher. Marrying the COT in late summer with the positive divergence, oversold conditions and falling wedge shown on the candlestick chart forecasted a rally which occurred.
The blue upward-sloping channel is in play. Gold has spiked higher in recent days as the dollar drops and euro pops. The Federal Reserve likely will not raise rates until 2016 so party time continues with easy money policies and the dollar weakens. US dollar index drops from 97 to a 93 handle over the last three weeks. The move pumps gold higher.
The COT bars continue to expand showing that a rally is in play. COT chart information lags. The COT bars are within where the prior tops over the last few months have occurred so there is likely a near term top soon at hand.
The candlestick chart shows negative divergence (red lines) for the indicators but the MACD line is long and strong wanting another price high after a pull back occurs. Price will need to back kiss the 200-day MA at 1176. Price has violated the upper standard deviation band so a move back to the middle band, the 20-day MA, at 1141 and rising, is in play. The RSI and MACD have short term momo which will also help maintain buoyancy in gold price for a few more days or week or two.
If you missed the rally in gold the charts urge caution against trying to chase the upside now. Gold should receive a pull back in the near term and take a sideways rest but the weekly chart remains encouraging for upside. Perhaps gold will stutter sideways at 1160-1190 digesting this month's sharp rally and the rally in general off the late summer 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: COT chart is provided courtesy of Cot Price Charts which is an excellent site to find all the commodity COT charts. The chart is annotated by Keystone.
WTIC oil is 46.12 as this is typed. perhaps establishing another sideways pattern the current sideways channel through 43-48. The red circles show oil bottoms and green circles are tops in oil prices. The flat nature of the COT bars limits its usefulness as a forecasting tool. The March bottom was a nice flush lower that provided confidence to go long crude.
The brown lines show the sideways patterns that oil slips into for 2 or 3 months, then adjusts higher or lower for 1 or 2 months, then a new sideways pattern. The candlestick chart shows long and strong indicators (green lines) as price made a new high except for the histogram that displays negative divergence and helped create the pull back in oil over the last few days. The expectation would be for oil to move higher again for another kiss of that 200-day MA resistance at 51. Sideways may be the order of the day for oil going forward.
Oil has been tracking with the stock market for the last few months but over the last couple days this relationship is wavering; this morning oil is lower with futures higher. The lack of oil demand due to a slowing global economy, ongoing robust oil inventories and Middle East turmoil may be in balance. 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: COT chart is provided courtesy of Cot Price Charts which is an excellent site to find all the commodity COT charts. The chart is annotated by Keystone.
Keystone's trading algo, Keybot the Quant, flips bearish today at SPX 2005. Markets remain erratic and unstable so caution is required and a whipsaw may occur tomorrow. Bulls need UTIL above 589.27. Bears need VIX above 18.04. More information is found at Keybot's site;
Keybot the Quant
The Baltic Dry Index, BDI is down in the basement continuing to indicate that the global economy is a deflationary funk. Ocean dry bulk goods and other shippers are beaten severely. The shippers seem to take turns going bankrupt over the years. In good times, the shippers order many ships but by the time they take delivery the economy is in the crapper. Ships only make money fully loaded and moving cargo.
GNK went bankrupt a couple years ago. After the July 4th celebrations this summer, the wine was flowing like water as Genco shareholders toasted each other's brilliance, however, the stock then nose dives from 7.85 to 3.23; a -60% crash. The ships are sinking and taking on water fast. Long traders are yelling, "Abandon ship!" The price is in free fall and traders have given up on the stock. There is blood in the streets, or, since this is a shipper, there is blood in the ocean. Sharks are circling.
The green lines show a falling wedge, and positive divergence with all indicators. The RSI, money flow and stochsatics are oversold and have nowhere to go but up. Price has violated the bottom band (pink) and needs to back kiss the middle band at 4.02 and dropping fast. The weekly chart is positively diverged across its indicators and violating its lower standard deviation band. The 2-hour chart is positively diverged. All of these indications are bullish.
It is called speculative insanity but Keystone leaps into the Genco ship and begins bailing out water from the hull with a coffee can. Keystone bot GNK today opening a new long position expecting a bounce from the possie d. As all knife-catches are, this is a very dangerous and speculative trade. 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.
Antares daily chart was highlighted the other day with the positive divergence expecting a bounce which occurred; a big bounce off the bottom. Keystone took profits in the long trade this morning and then reentered ATRS this afternoon reestablishing a long position. The daily and weekly charts remain attractive with positive divergence for the indicators. The 2-hour above shows possie d with the green lines. The falling wedge pattern is bullish.
ATRS remains an attractive risk reward play for the long side. As always, these are speculative dangerous trades. 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.
Keystone posted the SPX 2-hour, daily and weekly charts on the weekend so scroll back or type 'SPX' in the search box at the right to bring up those charts. The idea on the 2-hour chart was to wait for the negative divergence to print (red lines) to know the market near-term top is in. From Friday to now it is like waiting for Godot. The new moon peaked last evening and stocks are typically weak moving through the new moon about 65% of the time. Price peaked at 2019 yesterday and printed at 2006 this morning. But the bulls recover.
The SPX remains elevated but the 2-hour chart is negatively diverged wanting to see a roll over to the downside. The negative MACD cross occurs. It is an interesting and a tricky top since price is staggering sideways showing a strong battle between bulls and bears.
The VIX is at 16.50 under its critical 200-day MA at 16.65 which is a market signal for bullish versus bearish markets ahead. The VIX closed under the 200-day MA yesterday for the first time since mid-August nearly two months ago. VIX is 15 pennies under the 200 so watch this as a key market gauge. Market bears will win and roll the SPX over to the downside with the neggie d if VIX moves above 16.65. The bulls will keep ruining the bears day and extend the near-term market top if VIX stays under 16.65.
The expectation is for equities to sell off and retreat from the 11-day rally due to the negative divergence. Price continues to need to touch the middle standard deviation band at 2005 and rising since the upper band was violated.
During OpEx week a Tuesday low typically leads to a Wednesday high so this is a wrench in the bear case above. However, balancing this seasonality factor against the negative divergence on the chart the chart should carry more clout. Perhaps a big selloff occurs today to create a deep low into the closing bell today? Or perhaps softness today and tomorrow morning may lead into a huge upside rally tomorrow afternoon. Just some scenarios to consider. For now, things should be kept simple and the idea is that stocks should roll over due to the neggie d. 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 12:46 PM EST: The VIX is at 16.62 and its 200-day MA is 16.65. This is for all the marbles. Market bears need three more pennies for VIX and the neggie d in the chart above should kick into gear. The bulls are fighting to keep volatility, the VIX, under 16.65. Bingo. In the time it took to write this message VIX is now at 16.72. The bears are growling. Will it continue?
Note Added 12:51 PM EST: The VIX is 16.83 above its 200-day MA at 16.65. SPX 2013.
Note Added 1:04 PM EST: The VIX is 17.03 above the 17 level. SPX 2011. UTIL is at 587.61 and its 50-week MA is at 589.22 so the bears continue to apply pressure. Bulls need UTIL above the 50-week to receive upside market juice (reference previous chart).
Note Added 8:56 PM EST: The neggie d spankdown occurs. SPX LOD 2001.78. SPX ends the session at 2003.69. VIX 17.67. The selloff is fishy. The SPX daily chart shows a long and strong MACD line which wants another higher high in price in the days ahead. The CPCE put/call ratio is at 0.80 which is more consistent with stocks at a bottom rather than a top so something does not smell quite right. The SPX 2-hour chart is moving lower and the indicators are weak and bleak so there should be at least several hours of market weakness ahead for Wednesday.
The GoPro daily and weekly charts were posted on the weekend; you can scroll back a page of so or type 'GPRO' into the search box at the right to bring up prior charts. The charts were set up with positive divergence so Keystone thought a knife-catch was a good risk-reward trade. They do not always work out as well but GPRO launched the next day from 27 to above 30 a +11% pop in a heartbeat. Keystone took the dough and exited the trade (left some on the table exiting a tad early) and has been watching to reenter. There is a gap below and note how price keeps playing coy not filling the gap completely although on the 1-hour chart price did fill the gap if including intrahour price prints.
Keystone bot GPRO a short time ago opening a new long position. The gap below, the purple support line and the lower green trend line are all in play but the attractive positive divergence from the bounce this week remains a strong force for upside. Since all the indicators went possie d on the chart there is no reason for price to come back down; it may simply start higher from here. If it does come down to the gap or lower green line Keystone will add. GPRO looks encouraging from the long side and with the high short interest a strong move may occur to the upside. As always, the knife-catches are extremely dangerous trades only for those willing to lose their money. GoPro will be interesting to watch going forward. 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 weakness in oil prices create a pall on the stock market to begin the new week of trading, however, utilities cross above a major milestone which is positive for stocks. UTIL crosses above the 50-week MA at 589.29, call it the 589.15-589.30 area. Many Wall Street algorithms have this indicator programmed so it should boost stocks. The utilities' 50-week MA is programmed into Keybot. Despite the positive impact utilities should create in the the broad indexes, weakness in energy, oil, banks, materials and healthcare stocks are ruling the market action as the day begins.
Another key level to watch for utiliites is the closing price 15 weeks ago. This is also programmed into many algo's, such as Keybot, and is followed by the old timer's as a broad market signal. UTIL is above the price from 15 weeks ago at 560-ish so the weekly uptrend is higher which is positive for stocks. Keep a close eye on the UTIL 50-week MA level today and all of this week. UTIL price is at 590.31 a smidge above the 50-week. 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 11:05 AM EST: UTIL price is at 587.93 dropping back under the 50-week MA at 589.22. This drama will likely continue all week long. Use it as a gauge for overall stock market direction.
Note Added 11:22 AM EST: UTIL is at 590.07 back above the 50-week. Whoops, here it comes down again ...... you put your right foot in, you put your right foot out, you put your left arm in, you put your left arm out, you..........
Note Added on Tuesday, 10/13/15, at 12:57 PM EST: The drama discussed above continues through today's trading. UTIL is now at 588.01 and the 50-week MA is at 589.23. The battle continues. Keep watching; a firm winner will eventually emerge.
