Keybot the Quant Turns Bearish

The Keystone Speculator's proprietary trading model, Keybot the Quant, flips bearish at the SPX 2992 palindrome yesterday on the palindrome date of 91819. Copper is the key these days. As Doctor Copper goes, so goes the market. As always, more information is available at Keybot's site;

Keybot the Quant

CPCE Put/Call Ratio and SPX S&P 500 Daily Charts; Stock Market Top is Near

The put/calls continue throwing off low numbers verifying ongoing complacency and lack of fear in the stock market. Everyone knows the Fed and other central bankers will save markets forever to protect the wealthy class so there is no reason to ever worry about a big selloff. The Whitehouse keeps talking about happy US-China trade negotiations so everyone is waving this banner although there are never any concrete results.

The party is in full swing. Traders sling back shots of Fed whisky and investors sip on ECB champagne. The BOJ sake has quite a kick and the PBOC rice wine is even stronger. Traders are plastered on the easy money booze dancing to and fro with lampshades on their heads buying stocks without a care in the world. Alfred E. Neuman asks, "What could possibly go wrong?"

Markets are in a holding pattern waiting on the Federal Reserve Rate Decision and Dot Plots at 2 PM EST and Chairman Powell's Press Conference that will run from 2:30 PM EST to about 3:30 PM EST. The stock market will move to and fro on Jerome's words.

The put/call ratios remain low so the complacency will whack the bulls at some point forward, any day, any time. The news bites play a major role in trading these days since the minute stocks begin to falter, either the Fed jumps in, or President Trump, or one of his henchmen, to talk things up and provide support for equities.

Today will be a fascinating day. The Fed had to take actions yesterday to support day-to-day liquidity in financial markets. Such action has not been seen since the Great Recession a decade ago so traders and investors are walking on eggshells. Everybody and his brother expects a 25-bip rate cut, even Aunt Mable that does not even watch the stock market, so that is a done deal. More important are Powell's words and how he defends taking action to maintain system liquidity.

The stock market is in a holding pattern waiting on Powell today. After that, the SPX 2-hour chart can be watched to see where it is going to top out at due to the rampant complacency.

Housing Starts drop in 2-1/2 hours. This number is uber important. According to the Keybot the Quant data, the US housing market has dipped into recession starting 7/17/19, two months ago. The housing data is key to see if this new multi-year trend continues. 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. 

MSFT Microsoft Monthly Chart; Overbot; Rising Wedge; Negative Divergence; Upper Band Violation; Price Extended

Mr Softy himself, Bill Gates, says he has over 60% of his wealth in the stock market. He pontificates that no other investment can provide a decent return so he recommends staying in the stock market. When they were playing a bridge card game, Warren Buffett's long term buy and hold philosophy must have infiltrated Gates' noggin. It will be interesting to see what Gates says about his fortune a couple years from now.

Gates no doubt owns lots of MSFT stock and it has been a stellar performer a rocket launch from the lower left to the upper right. The privileged class has made lots of money on this ticker. Alas, all good things come to an end. The rising wedge pattern is ominous since the collapses can be quite dramatic.

The red lines show negative divergence across all indicators in this monthly time frame so the top is in. The one caveat is the MACD line. It is trying to turn down as price tests the prior highs but the jury remains out. If the MACD still has a sliver of juice left in it and is still sloping up, a jog move is likely, down one month, then back up the next month for another test of the highs, then, as the MACD rolls over with neggie d during that price high, the top is in. This outcome would place the multi-month and multi-year top in October/November rather than now.  

The ADX shows a strong trend higher in 2014 and 2015 but this petered out. Then Microsoft was goosed hard starting with the central banker stick save of markets in early 2016. The ADX verifies that the move higher in MSFT is a strong trend higher although the trend higher was stronger in the middle of last year than it is now. As Mr Softy is spanked lower during the weeks and months ahead, watch the ADX to see if it falls out of the pink box.

MSFT has violated the upper standard deviation band so the middle band at 111.86, and rising, is on the table, also the lower band at 80.67 and rising. The middle band is the 20 MA and note that price has not touched the 20 since 2016 over 3 years ago. That is uber long. Price will need to go down to show the 20 respect. Price is also extended above the moving averages and desperately needs a mean reversion lower.

Summing up the above, everything is bearish going forward for MSFT although that MACD line may be able to create another month or two of flattish buoyancy. If you made money in Microsoft, exit stage right. Let Gates hold the bag; he appears willing to do so.

A long-term player can begin entering MSFT on the short side now and add to the short each month forward. You will be happy at the end of this year and into Q1. It would not be surprising to see MSFT at 110-115 by year-end and even a lot lower like sub 100 in early 2020. Keystone does not have a position in MSFT currently. It is a momo stock so that has to be taken into consideration if contemplating a short.

The weekly chart topped out with neggie d at the end of July. Price took a tumble but now stumbles sideways on the weekly basis. MSFT has held the 20-week, now at 134.15, for the last two months. If 134.15 fails, Mr Softy is in trouble. The daily chart shows the same sideways consolidation as the weekly, the standard deviation bands are pulling in tight, so price is likely going to jump very strongly in one direction or the other. Tight bands do not predict direction, only magnitude. If it spikes higher, short 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. 

SPX S&P 500 60-Minute Chart with 200 EMA Cross; FOMC 2-Day Meeting Begins; Fed Rate Decision and Chairman Powell Press Conference Tomorrow; Potential Island Reversal and/or H&S

One of Keystone's key ST (short-term; hours and days) indicators is the 200 EMA cross on the SPX 60-minute chart. The bulls are singin' songs and carryin' on for the last couple weeks as stocks run higher. The bears were in charge in August with the SPX below the 200 EMA (red circle). During late August early September (blue circle), the bulls and bears battle for control. Price went above the 200, then back below, then gapped above and the bulls ride to victory (green circle).

The SPX 200 EMA on the 60-minute is at 2948 with the SPX at 2998 which is 50 points above. The bulls scoff at the bears; they remain on easy street for the short-term as long as the SPX rmeains above 2948. The red rising wedge, overbot conditions and neggie d spanks price lower off the top. Price is bumping along now which is understandable considering the important Fed rate decision is on tap tomorrow.

Today begins the two-day FOMC meeting and Chairman Powell speaks tomorrow afternoon. The cobbler is placing new cleats on his tap-dancing shoes today. Markets are a crap-shoot until King Powell brings the tablets down from on high and tells global traders how to trade tomorrow afternoon. What a sick financial system the central banks have created.

Price is on an island above 2960 so a potential island reversal pattern would be in play if the SPX came down to 2960 and then gapped-down to 2938, the reverse of the early September move that created the island. The SPX is also forming a potential H&S with the right shoulder occurring now. A head at 3028 and neckline at 2960 is 68 points difference so the downside target would be 2892, call it 2900, if the neckline fails.

Seasonality factors are on the bull's side. Stocks are higher about 80% of the time heading into a Fed meeting which is today and tomorrow. This week is OpEx with Quad Witching on Friday. Typically, stocks are up from Tuesday into Wednesday during OpEx week so professional traders will likely be buying a dip today.

Tomorrow morning Housing Starts are reported. This is big-time. Keystone has called the start of a housing recession and downturn from 7/17/19 forward so it will be interesting to see what the Starts are at this month.

News bites will move the markets to and fro,especially oil news such as the imminent Saudi press conference concerning the attacks of their oil facilities, but make no mistake, everyone is waiting on Herr Powell to signal how to trade from the podium tomorrow. S&P futures are down -3 about 2 hours before the opening bell for the Tuesday session. VIX 14.85. Powell is trying to edit his comments for tomorrow's speech but has broken the tips off three No. 2 pencils so far this morning. 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.

GM General Motors Monthly Chart; Rising Wedge; Negative Divergence; UAW Strike Provides Insight into America's Future Class War

50K General Motors union employees are bringing production to a standstill at 50-plus plants across America. The General Motors UAW (United Auto Workers) are on strike. The strike comes at an interesting time. Global economic activity is slowing and the US is likely heading into recession at any time forward. Peak Auto has likely occurred.

The workers made sacrifices and concessions to keep the automaker afloat during the Great Recession in 2008-2009. GM was bailed out along with the banks and other institutions such as AIG which handles government money discreetly and would not be permitted to go bankrupt. Comically, idiots actually think that free markets and capitalism exists. Bailouts are the exact opposite of capitalism.

America is best described as a faux free market crony capitalism system. Everyone loves capitalism when the stock market is moving higher year after year but once a crash occurs, the weak companies are not weeded out (which is what is supposed to happen under capitalism). Instead, these sick banks and companies, that already raped the financial system for many years, are saved to protect the wealthy elite class that own huge stock portfolios. It's not rocket science.

As Keystone has said many times, the expectation ahead is that once the recession hits, the mood across America will darken. The huddled masses have suffered for a decade under structural unemployment and high debt while watching the wealthy dance with glee and brag about their stock portfolios daily (stocks rising higher courtesy of the central banksters that will receive their quid pro quo's from the Wall Street investment banks when they resign from public life). The crony capitalism system is on full display.

Once the recession turns the mood ugly, America will be looking for someone or something to blame and the rich will become the target. A class war will begin in the United States with protests and violence not seen since the race riot days of the 1960's. The cycles always come 'round again. America's wealthy class will be the targets of the huddled masses that walk down Main Street with pitchforks and torches.

Sad to say, and hopefully it does not occur, but the elite wealthy class in America will become targets of disdain and violence. Politicians and corporate CEO's and executives will experience public ire. Protesters will gather at residences of the wealthy class; CEO's will begin freaking-out at such demonstrations and worry about their safety. McMansions will burn. The rich will probably seek refuge in gated communities with security guards. There is likely a lot of sad and tragic stuff on the horizon. This dreadful outcome is created by the central banks that rewarded the wealthy over the last decade at the expense of everyone else. America's wealthy class, synonymous with human greed, destroyed capitalism over the last five decades. Most of the family generational wealth you see is dirty money.

If you have money, don't flaunt it. China sees class wars coming since a couple years ago they outlawed many displays of wealth by individuals in their communist society.

The reason this is all so fascinating is the timing of the GM strike. The workers are quick to say that they helped General Motors years ago but the company has not returned the favor. More importantly, the average GM worker has an interesting perspective. They are saying  the strike is for all of America and they are fighting for the little guy that has been trampled like dirt over the last decade. Perhaps America's class war is beginning faster than thought?

It is shameful that nine years after GM is saved, it is rated at or near junk by the rating agencies. Of course the wealthy elite class was saved and they took their money and moved on. The privileged class controls the rigged game.

GM scaled up production in recent weeks preparing for a strike. The car lots are stacked-up with cars but folks do not have the money to buy them. The union demands may send GM into bankruptcy again. Both sides typically lose after a strike. The huddled masses may not care if General Motors goes bankrupt again. The workers did their part to save the company after the Great Recession but the automaker never returned the favor. Why would you ever want to help them again?

All this political mumbo-jumbo aside, the chart displays a nasty red rising wedge. The failures from rising wedges can be quite dramatic. The red lines show the universal negative divergence that creates the spankdown off the top. Note how price is trying to hold that 20-month MA support at 36.25. Yesterday's LOD is 36.18 and GM closes at 37.21. If 36.25 gives way, the stock is in a heap of trouble and will likely target the 50-month MA at 32.93. The chart is bumping sideways currently. Bears will need the RSI and stochastics to drop below 50% into bear territory.

If in GM, it is likely a good time to scale-out. The stock will likely pop if a resolution to the strike is reached. That wlil likely be a good shorting opportunity. On a longer term basis, you can likely open a short on GM and add to it each month forward. By Q1, you will likely be a happy camper. Keystone does not hold any position in GM currently, long or short. If it was played it would be on the short side but the strike resolution is a wild card for strong upside. 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 Morning, 9/18/19: European car sales tank -8.4% the largest monthly drop for this year thus far. Peak Auto is here. Nissan sales are crushed. Germany and Japan, two top car makers, are slapped in the face. Steelmaker NUE lowers guidance blaming a softening auto market.

BRENT Brent and WTIC West Texas Crude Oil Daily Charts; Largest Spike in Oil Prices in a Decade Due to Attack on Saudi Arabia Facilities

The charts show the rocket launch in oil prices on Monday, 9/16/19, due to the drone and/or cruise missile attacks on Saudi Arabia's premier oil facility and oil field. Oil prices print the largest spike higher in a decade. Brent oil catapults +12.4% to 67.68. An initial spike in price almost hit 72 when oil futures trading began trading Sunday evening. Watch for a close above 68 in the chart above which would then pave the way to 72.20-plus.

After the initial spike higher Sunday night into Monday morning, Brent oil pulled back to 65-66 and markets were seeking calm. However, during the Monday trade, Saudi Arabia said the oil facility systems will not come on line as fast as thought and bingo, Brent popped higher again and was sporting a consistent 69-handle.

On Tuesday morning, 9/17/19, Brent oil futures are down 0.41, -0.6%, to 68.61.

West Texas Intermediate Crude Oil leaps +14.7% to 62.90 in the Monday trade. Currently, WTIC oil futures are down 0.89, -1.4%, to 62.01.

Reference Keystone's previous Brent oil chart showing the long-term sideways symmetrical triangle chart pattern and explaining the initial oil drama after the attack. The top trend line of the triangle is at 67.50-ish so it is a big deal for Brent to spend time above this level (it portends far higher prices ahead if price begins logging closes above 67.50-68.00).

On Monday morning, President Trump could not resist waxing bravado telling the world that the United States is "locked and loaded." That is something an adolescent says on Facebook to impress his friends and girls. Trump walked back the hard line rhetoric now saying, "I don't want war with anybody." 

Iran President Rouhani rules out any meeting with President Trump in the future after it is accused of orchestrating the drone/cruise missile attack on the Saudi oil facilities. Trump wants to take a diplomatic path with Iran but countries do not respond well to threats; nations are not able to do that since they will look weak. That approach worked for Trump in real estate deals in the private sector since he had the gold and he makes the rules. Politics and foreign policy does not work that way.

Iran likely feels emboldened to create more trouble in the Middle East. Trump balked at responding to the drone attack by Iran a month ago. Also, Trump has no response to the seized oil tankers. He also removed (or he resigned) National Security Advisor Bolton, a hawk. Now, the president puffs his chest out saying military action is a distinct possibility but he again quickly retreats from the bravado position and says he does not want conflict. Foreign policy was an absolute mess under Emperor Obama, he was inept at handling the world stage, but the US is not in much better shape with the ongoing confusion and angst created by King Trump.

Saudi Arabia was supposed to have a news conference yesterday but did not further adding to yesterday's oil rally. The presser is supposed to be today and will be guaranteed to move the oil and stock markets. The world is waiting for evidence on what type of attacks occurred, who supplied the hardware and where the attacks were originated. The Saudi's say the hardware was Iranian but are not yet pointing the finger at Iran like the US is.

What is likely is that the US and Saudi Arabia are playing a stealth game now and plan to retaliate. Trump will be agreeable to a retaliatory strike since he will feel obligated to back up his three years of macho military talk with some action. Trump is aware that foreign leaders are less impressed with his forceful tactics as time goes on. Thus, we will wake up one morning, probably a couple weeks from now, and there will be some type of retaliatory action occurring. The new moon is Saturday, 9/28/19, so the expectation is for a retaliatory move against Iran, or Yemen, or elsewhere, between 9/26/19 and 10/2/19. America has superior night vision technology.

The gray circle shows the death crosses occurring for oil. WTIC prints a golden cross in August and actually slipped back to a death cross in recent days. This will be nullified due to the huge spike higher in price. The 50-day MA will quickly curl higher.

The world awaits the Saudi press conference that will provide details on the attacks. After that, we wait for the US and Saudi retaliatory action against Iran, Yemen, or others. King Donny and Crown Prince Mohammad Bin Salman are discussing the retaliatory options; a tricky situation since action is required but it should not be so large that it starts a war in the Middle East (which is what Iran is likely trying to create since there is probably no relief from sanctions). 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 5:13 AM EST: Saudi Aramco says oil loadings will be delayed a few days going forward. Oil prices bump higher. Brent oil is down -0.4% at 68.73 moving up towards 69. WTIC oil is down -0.9%, also recovering intraday, to 62.33. The world awaits the Saudi Arabia press conference. The Arabs should trade in their white robes for top hats, tails and canes. That way they can tap dance easier.

Note Added Wednesday Morning, 9/18/19: Brent and WTIC oil drop during the Tuesday trade after Saudi Arabia says much of the production will be restored quickly and all of it by the end of the month. The premium comes out of price as tight supply will not be as much an issue. Over 3 days, oil is up about +7%, so that is the premium put into price due to the drone/cruise missile attack. The biggest worry is if this type of attack will occur again and if it will also begin targeting other sites such as government buildings. Drone warfare may drive all humans underground in future years. WTIC oil is marginally lower at 59.14 and Brent is marginally higher at 64.71. Brent oil's 20-week MA support is at 63.43 and 200-day MA at 63.99.

UTIL Utilities Weekly Chart; Overbot; Rising Wedge; Negative Divergence; Upper Band Violation; Price Extended; Potential Tweezer Top

Keystone continues to like utilities on the short side but keeps taking his lumps each day. Here's some more. Slap, slap. Utes are key since they will tell you if the long multi-month and multi-year down move for the US stock market has begun. If the utilities move lower a month or two before the stock market, or coincidentally lower with the stock market, that tells you that the downside in equities is extremely real and serious blood shed is ahead. If stocks roll over lower but utes remain buoyant, equities will then likely recover.

The monthly charts for indexes and sectors continue indicating a multi-month and multi-year top occurring now. The utility weekly trend is identified by looking back 15 weeks and comparing prices. For the week ahead, UTIL must drop below 806.60 to begin a weekly downtrend. Price is at 847 so the bulls are feeling pretty good about themselves. Next week, the comparison number will be 815.55 so watch this 806-816 area closely this week.

The 50-week MA at 773, and rising, is key. This represents a trap-door for the stock market should prices begin falling steadily. But before this dire outcome occurs, market bears will first need to violate the 807 area this week.

Note the long candlestick shadows for the last two weeks indicating a potential Tweezer Top (brown circle). When price action prints a tweezer at the highs, or at the lows, that typically indicates a trend change. Wow, that is a horrendous red rising wedge. The drops from rising wedge patterns can be quite dramatic and bloody.

The red lines show universal negative divergence across all indicators wanting to see a pullback. The chart is overbot agreeable to a pullback. Price is extended above the moving averages so a mean reversion lower is desperately needed. UTIL violated the upper standard deviation band so the middle band at 816.50 is on the table, which is in that 806-816 window mentioned above. How do you like them apples?

The UTIL monthly chart is also topping out with neggie d. Everything says down but utes have momentum and traders and investors believe they are hiding in a safe place with a dividend; in actuality, they are only covering themselves with a fig leaf.

The Fed and other central bankers have destroyed the business cycles over the last decade-plus with their obscene Keynesian money-printing. These sick central bankers financially-engineered the longest economic expansion in US history to protect the wealthy elite class at the expense of the middle class (now lower middle class), poor, disadvantaged and future generations. Human greed. The crony capitalism system gone amuck. One ponders what the market, economy and society will look like a year or two from now. What degree of ugly? 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.

VIX Volatility Daily Chart

Look at that crushing drop in volatility over the last 3 weeks. The price action has the central bank foot print all over it. The central bankers, led by Herr Powell, maintain their jack boots on the throat of volatility to sustain buoyancy in the stock market and protect the wealthy class. Crony capitalism rules the day, every day.

The bulls cheer when the VIX fell below the 200-day MA at 16.81. More importantly, the VIX fell through 15.80, a bull-bear line in the sand identified by the Keybot the Quant algorithm, so the bulls began throwing confetti and singing joyous songs. Bulls are in control of markets with the VIX below 15.80. The bears will be fighting back and stocks will no longer be moving higher if the VIX moves above 15.80. The bears are in full control if the VIX moves above 16.81 and the stock market will begin falling apart in earnest. 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.

SOX Semiconductors Weekly Chart; Rising Wedge; Negative Divergence; Price Extended

Analysts, strategists, pundits and other talking heads proclaim that semiconductors and tech stocks are the future with guaranteed stock gains, rainbows and blue skies ahead. The SOX weekly and monthly charts, however, are not pretty and indicative of a sector that is topping out on a multi-month and multi-year basis.

Right now, the SOX is running higher wanting to tease the record high at 1625. The price poked through 1580, and 8's typically lead to 2's, as Keystone's 80/20 Rule says, so the 1620 prints. The red lines show negative divergence in play spanking price down from a couple of tops already. The current buoyancy in price is due to the analyst and business television hype telling folks to buy chips before its too late.

The stochastics are showing some strength over the last couple months but the neggie d from April to now is firm and remains in place. Price may tag that upper band at 1635 but that would likely be a great area to short from. The middle band, the 20 MA, at 1465, is in play. Before that, price would have to fail through the lower trend line of the rising wedge. The rising wedge is ominous since the price collapses from these patterns can be epic.

The ADX pink box shows the strong trend higher in the semi's in 2017 into early 2018. That strong trend petered out. Note how chips were soggy from February 2018 providing an early warning signal for the Fall 2018 trouble ahead. Stocks and semi's crash in Q4 2018. Chips recover but the ADX never developed into a strong trend higher in fact the ADX is weaker on each price high.

Watch for the negative Aroon cross which will tell you trouble is afloat. Keystone does not hold any positions in the chips right now long or short but would be looking for short possibilities. TXN may set up nicely as a short in a couple weeks say late September early October. Interestingly, the USD semiconductor ETF is showing the three price highs as level or weaker while the SOX chart above shows each price higher slightly higher. The smart money is looking for chip bag holders for the rest of the year. Are you one of them? 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.

Brent Oil Weekly Chart; Sideways Symmetrical Triangle; Saudi Arabia Oil Refinery and Field Attacked

International news reports say drones attacked Saudi Arabia's largest oil facility as well as its major oil field. The smoke is visible by satellite. 

The Tadawul All Sahre Index (Saudi stock market) slipped a couple percent at the open but then recovered to down about -0.5% as well as neighboring countries. The day looks to finish down -1.1% a modest drop. Analysts are calling for a $2 to $10 jump in oil prices depending on the extent of the damage. About 5% or the world's production will be off line. The price shock should only be a short-term thing since the world remains awash in oil. The Saudi's, OPEC nations and Russia have all been holding back on production to maintain buoyancy in the oil price. These nations depend on oil revenue to provide the cash flow to run their countries and meet their obligations to the huddled masses.

Days ago, traders rejoiced at the dismissal, or resignation, of National Security Advisor John Bolton who is a hawk on Middle East policy. US Secretary of State Pompeo and Treasury Secretary Mnuchin laughed and danced with glee at Bolton's departure. Pompeo says Iran is behind the attacks. Houthi rebels in Yemen claim responsibility. Iran backs the Houthi. Saudi Arabia and Iran are fighting a proxy war in Yemen.

The whole drone story is fishy. Drones did not fly over the long distance from Yemen to the Saudi Arabian target; use your common sense. If there were drones, they had to be launched closer or perhaps from sea. Now there is talk of cruise missiles which makes far more sense. Maybe there were one or two drones spotted but the bulk of the damage was by missiles? Who knows? You will never know the actual truth.

Nonetheless, oil prices will react in the near-term. You can save yourself 5 or 10 bucks by filling up the gasoline tanks today and also the containers for the lawn mower. Oil prices may be 25 cents higher by Friday in the States. As mentioned, the pop in price should be short-lived.

Interestingly, oil price shocks can precede and act as a catalyst for recessions. The images of burning oil facilities and fields in the Middle East brings back memories of the wells burning during the Iraq War. Folks watching television become anxious as they watch the Middle East burning. Consumer confidence and sentiment suffers. Worried consumers do not spend as much money. Sentiment correlates to retail spending data. Analysts continue proclaiming that the consumer will carry the stock market and economy forward.

Adding to the intrigue, is the Israel elections. Perhaps heightened conflict will bolster Netanyahu's election possibilities. In the world of covert operations, you never know what is actually going on behind the scenes. It is also perplexing that the Saudi facility did not have a moratorium on any planes, drones or flying objects within a couple miles of the plant. The event is smelling more fishy. The world is a corrupt place and few things are as they appear. The Saudi's will not be complaining about a rise in oil prices; it will improve their government budgets.

Oil prices were sliding the last few days and you see the red candlestick from last week. Price came up to tap on the 20-week MA resistance at 63.79 but the oil bulls did not have the strength to punch up through. The bears spanked oil lower from the 20. The 20 MA is also the middle standard deviation band and once the bottom band was violated in early August, the middle band was on tap, which occurs.

The yellow lines show the sideways nature of the chart. The chart indicators are not tipping their hand. Price is simply chopping sideways and will have to make a decision about exiting the sideways symmetrical triangle. The vertical side is 50 to 80; call it 30 bucks. So a breakout higher above the upper triangle trend line at 67.50 would target 97-98 for the weeks ahead. A breakdown from 58-ish would target 28-ish. The latter scenario carries more clout with the global economy slowing down. However, again, especially in the near and short-term, oil prices will pop higher. The geopolitical tensions are the oil bulls best friend.

The timing of the attacks occurs exactly when price is testing the lower trend line of the triangle. How convenient. Of course it does. Watch the 20-week MA at 63.79. It is a big deal to get above this resistance since the bulls could not last week. The 50-week MA at 65.46 is next; watch that closely. Then there is the triangle top trend line at 67.50. Above that, oil price may seek the 70-72 level to tap on the upper standard deviation line. Keystone's 80/20 Rule says 8's lead to 2's so a breach of 68 likely hints that 72 is coming down the pike.

As the smoke clears, literally, Brent Oil likely chops through 58-68 for the weeks ahead. Oil begins trading Sunday evening in the States time-wise, this evening, as daybreak hits in Australia, Japan and Asia, so that will tell the tale for prices. The damage assessments during the next couple days are key and will send oil prices to and fro depending on the extent of the damage. 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 6:00 PM EST: Bingo. Brent oil explodes +19% higher above 70. Price tags 71.95. S&P futures tank -18. Dow -160. Nasdaq -64. Russell -11. The US 10-year yield is at 1.90%. President Trump says the strategic oil reserve can be tapped if needed.

Note Added 6:20 PM EST: Brent oil is up 7.82, +13%, to 67.88. WTIC oil is up 6.49, +12%, to 61.23. S&P futures -11. Brent is hanging around....... wait for it...... 67.50-ish which is the upper trend line of the sideways symmetrical triangle pattern. Price popped to 72-ish because the 68 was breached. Watch the 50-week MA support at 65.46 and the battle at 67.50-ish.