SPX S&P 500 Weekly Chart; Fibonacci Retracements; Overbot; Rising Wedge; Negative Divergence Developing

The SPX weekly chart is a bunch of Spaghetti-O's. It is patriotic with reds and blues and whites. It is obvious that the stock market is waiting for the Superbowl next Wednesday, 6/14/23, for the Federal Reserve rate decision and Chairman Powell presser. The 2-day Fed meeting starts on 6/13/23 the same day the CPI inflation data drops and then on Fed day, hump day, the PPI inflation data drops. This is when the stock market story will be told and the charts are set up waiting for this 2-day event next week. Comically, next Wednesday is Flag Day so Powell may be waving a white surrender flag.

The blue lines show the Fibonacci retracements (38%, 50% and 62%) for the collapse from 48 hundo down to 36 hundo. Price is teasing the 62% Fib retracement at 4312. Interestingly, the top standard deviation band is at 4311 and price came up to 4300 yesterday almost a touch. A violation of the upper band will place the middle band, which is also the 20-wk MA, at 4101, on the table, as well as the lower band at 3890.

A pop above the 62% Fib retracement would be a big deal (several days of closes above 4310-4320) with the bulls throwing confetti seeing blue skies and rainbows ahead. However, the chart is not set up for that rosy ending. Chairman Powell remains the wildcard that is in complete control of what direction the stock market goes. Don't you love the garbage crony capitalism system? Don't worry since crony capitalism is in its final throes.

The SPX weekly chart is set up negatively but the negative divergence is not fully in place as yet so a run at the 4320 level is definitely on the table. Keystone's 80/20 Rule says 8's lead to 2's on the way up so a move, and a few days of closes above 4280, opens the door to 4320. A move above 4278 opens the door to 4282.

The red rising wedge pattern is bearish. The stochastics are overbot which is a bearish sign although the RSI is not in overbot territory. The red lines show that as price makes a new high this week, the RSI, histogram, stochastics and money flow are all neggie d wanting to see a spankdown and start of a multi-week down move. However, the MACD line, typically the last kitten that always needs herded, remains long and strong.

The MACD wants to see a higher high in the SPX on the weekly basis which sets up the Superbowl event for next Tuesday and Wednesday as explained above. The expectation is that the SPX price should make the matching or higher high this week and next, as it is doing now, and the MACD should roll over and go neggie d, joining the other indicators, and calling the top on the weekly basis.

The Aroon green line shows that 100% (the absolute maximum) of the bulls believe that stocks will continue higher going forward. The Aroon red line shows that all the bears also believe that stocks will continue higher. This is a contrarian indicator. When everyone is nearly 100% bullish about stocks, that is when the market typically sells off.

The ADX at 13 shows that the multi-month rally in stocks off the October low is garbage and not a strong trend higher. The last strong trend for the US stock market was the cyclical bear market last year (pink box). The strong down move in stocks in 2022 stalled into the current multi-month sideways funk that is beating-up bulls and bears alike. If the stock market rally was a strong trend higher, the ADX would be above 25 or 30 right now heading higher. It's not.

The SPX probably needs to back kiss the 100-wk MA at 4198 and the 20-wk MA at 4101 as explained above. What does all this mumbo-jumbo and technical voodoo mean to the heads that are exploding from knowledge overload?

Stocks may be soggy this week but should rally into the Fed meeting next week (stocks are up 80% of the time during the couple days in front of a Fed meeting) probably tagging the 62% Fib at 4312 and upper band at 4311, call it 4320. At that time, the MACD line will likely go neggie d to mark the top. A multi-week down move should begin for stocks anytime over the next couple weeks. Simply watch the MACD line so you know when the top is in on the weekly basis; you do not have to guess.

Once she rolls over, the down move can be very ugly. The SPX needs a run of the mill pullback of 100 to 400 SPX points to satisfy the uber complacency shown by the put/calls but the failure in utilities points to a far worse outcome; double that fall or more. Watch UTIL 928 this week since that will prevent the worst outcome going forward. The stage is set for next week when Pope Powell brings the tablets down from On High and tells global traders how to trade in the world's corrupt financial system. 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.

The Keystone Speculator's Unemployment Rate Indicator Signals Trouble Ahead

The Keystone Speculator's Unemployment Rate Indicator signals trouble ahead for the US economy and markets. The unemployment rate is 3.7% moving above the signal line at 3.63% for the first time since the COVID-19 pandemic horror began.

After the 2008-2009 financial crisis, and the Federal Reserve printing money like madmen (monetary stimulus) the unemployment rate finally dips below the signal line during the November 2010 to January 2011 period (not shown on chart). From there forward into the covid pandemic the rate remained below the signal line. The Fed sure knows how to goose the garbage markets and economy in the dirtbag crony capitalism system.

The COVID-19 pandemic hits in early 2020 and the rate explodes above the signal line in April 2020. The rate catapults to 14.7% in May 2020 then begins lower as the crony capitalism system is once again goosed by money-printing. What a joke of a financial system. The obscene Fed and Congressional (fiscal stimulus) spending sends the US unemployment rate lower. Companies hired anyone that wants to work but many walk around with wads of easy money cash in their pockets and purses disinterested in the daily drudgery of a job. Who wants to work when the government is taking care of you?

The happy times (low unemployment rate) continue into 2023 with Americans celebrating the crony capitalism system; a Potemkin Village. On 6/2/23, the US Monthly Jobs Report says the unemployment rate climbs to 3.70% which is a harbinger of doom ahead. Give it a month or two since the signal may reverse as it did in February 2019 but the path forward is likely a higher unemployment rate.

If you are a stupid young person, sit down with your significant other and go through the scenarios of you losing your job, your SO losing their job, and both of you losing your jobs. Can you pay your bills? One of those three things are likely going to happen to you over the coming months. Plan accordingly.

The unemployment rate is an interesting number since it typically pops higher when a recession ends and good times are beginning going forward. This is because the surveys ask folks if they are looking for a job and when more people say yes, and are out there looking around, that data increases the rate but it is actually a good sign. Then after a couple-three months or quarter or so, the rate will reverse and come back down as the economic recovery takes hold and is well underway and people are high-fiving each other at their good fortunes ahead.

That did not happen when the pandemic hit. That jump higher in rates was the worry that the Great Depression Redux was starting but money-printing in the corrupt crony capitalism system always saves the day as it does from 2020 to present. Thus, is the bump higher in the unemployment rate a signal that more people are enthusiastic and excited about getting back to work and that good times are ahead, or, is the rate moving higher for the wrong reasons such as a recession starting?

There are other flies in the stock market ointment. Many people were/are dealing with loved ones that are still suffering ill effects from the COVID-19 virus as well as the vaccines. Others cannot keep up with Biden's inflation created by his stupid war on America's energy complex trying to have aluminum smelters run on solar cells (it is beyond stupid). So it is different this time and not in the same camp as a washed-up beaten-down economy when the pop in the unemployment rate may lead to good things. Quite the contrary, the rise in the unemployment rate is likely due to overstressed and sick Americans having to go back to work to stave off inflation. This is not a happy path forward. Sick, disgruntled and increasingly-poor common Americans do not spend money.

The wealthy and privileged elite do not care since they have raped America's financial system for all its worth over the last five decades especially the last 13 years. It was great if you knew how to, and had the money to, play the game. 30 million Americans screwed the other 300 million since the 1970's and now it is payback time going forward for the months and years ahead. It is the bread and circus days like ancient Rome when everything becomes entertainment (work, politics, family, etc..).

If the unemployment rate continues higher above the signal line in the chart above (over 3.63% and higher going forward), the United States is slipping into recession as stock market sentiment is off the charts bullish. Many pundits are touting how great things are going with blue skies and rainbows ahead after the debt crisis was resolved. People are stupid, and/or corrupt and compromised. 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.

CPC Put/Call Ratio and SPX S&P 500 Weekly Charts; Significant Top At Hand and/or Developing

Plan accordingly. Prior tops were 2 to 3 week events then down hard. 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, NVDA and MRVL Weekly Charts; Artificial Intelligence (AI) Orgy Party in Full Swing

The AI orgy party is in full swing. The House is Rockin' as Stevie Ray used to play. There's some bad honky-tonkers laying it down here today for Memorial Day. Thank you to all who gave their lives for the United States.

Companies are saying the words "artificial intelligence" to watch their stock prices jump instantly higher. It is reminiscent of the bitcoin/blockchain hype. You coul be selling shoes or plumbing supplies but when you said blockchain your stock doubled. Same-o now.

Marvell rocket launches on the AI hype. The orgy is marvelous if long MRVL. Booiiiinnnng. The green lines show the falling wedge, oversold conditions and positive divergence for all chart indicators that guarantied the bottom and move higher. The blue inverted H&S has a head at about 35 and neck at 46 so that is a difference of 11 so the upside target for the head and shoulders pattern is 46 +11 or 57 and it occurs satisfying the H&S.

MRVL is at 66 with upside momentum in play for all the chart indicators so she likely needs about 2 to 4 weeks to top-out. Keystone's 80/20 Rule says 8's lead to 2's on the way up and 2's lead to 8's on the way down. A cross above 68 will likely open the door to 72. The 71 to 76 zone is a good candidate for where Marvell may top-out on the weekly basis in about 3 weeks. Simply watch the progress of the chart and you can call the top when the indicators all go neggie d.

NVIDIA is the poster boy for the AI orgy. The CEO is in Taiwan waving chips around in the air as if it was the Holy Eucharist. Traders buy NVDA with both fists knowing there will be a bigger fool around the next day to unload the shares. When you look around and there is no one there to sell your shares to, well, you realize that you are the bigger fool.

NVDA takes out its prior high from late 2021 which hints that MRVL may want to do the same. NVDA prints the new price high with the histogram, stochastics and money flow in negative divergence. The RSI, stochastics and money flow are overbot agreeable to a pullback. The MACD line is working up towards nosebleed levels. The negativity hints that a rest may be needed on a weekly basis (pulse backward for price) but the upside is not finished.

The MACD line remains long and strong wanting another price high after price retreats due to the negativity (red lines). A potential outcome is a jog move, down one week, then back up for the following week to a matching or higher price high at which time the MACD line and RSI will go neggie d joining the other indicators and calling the top for NVDA on the weekly basis. You do not have to guess; simply watch the progress of the chart and you can call the top.

NVDA also displays an inverted H&S pattern. With a head at 110 and neckline at 190 that is 80 difference so the upside target, if the neck is violated, is 270. Price breaks up through the neckline and tags 270 satisfying the H&S.

The SOX semiconductor index is shown above and it also enjoys a two-week orgy rally due to the AI hype. Folks, artificial intelligence is not going to clear your stuffed-up toilet during a graduation party or fix the flickering light and faulty wiring in your dining room. However, Joe the Plumber and Edna the Electrician will.

The SOX is hitting some price resistance from a year ago. The new high over the last 3 months comes with the histogram, stochastics and ROC in neggie d and the RSI and stoch's at overbot levels agreeable to a pullback on the weekly basis. However, the RSI remains sloping higher. Ditto the MACD line and there is momentum in price due to the AI hype.

Thus, a jog move is needed before she can top-out (down-up). The red lines will create sogginess probably in the week ahead but the green lines will try to create more lift in price after the pullback. Thus, the socks should top-out in a week or two; the chart will lead the way and once the weekly chart is ready to give up the ghost, the daily and hourly charts can time the short entries.

In the previous Amazon chart, Keystone told you these babies were not ready to short as yet. Anyone shorting NVDA or MRVL is now wearing a loin cloth and holding a tin cup. The charts show that SOX and NVDA have a good chance of topping-out in a week or two but MRVL may take 3 weeks or so. There is no reason to become involved in the AI orgy long or short right now. Wait for the charts to set up as described above and you can probably begin to short in a couple weeks. Let the charts tell you when. 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.

Keybot the Quant Turns Bullish

Keystone's trading robot, Keybot the Quant flips back to the long side at SPX 4197 on Friday. It is more choppy slop as the debt talks continue. The thieves on Wall Street knew ahead of time that Treasury Secretary Yellen was changing the drop-dead date for the debt crisis from June 1 to June 5, extending the deadline, so they were already on board as Joe Retail jumped in to chase the AI orgy rally higher. Such is America's corrupt crony capitalism system in its last throes.

Watch NYA, VIX and RTH. One of them will flinch and tell you the path forward for the stock market.

Keybot the Quant

NYA NYSE Composite Weekly Chart; NYA Loses 40-Week MA at 15138 Ushering-In Cyclical Bear Market but Battle Continues

NYA loses the critically important 40-week MA at 15138 which places the US stock market back into a cyclical bear pattern. It's All Over Now, Baby Blue. The vagabond is knocking at your door.

However, just like when price popped above the 40, caution was warranted since it may not stick. It did not. Same-o now. Give it a few days or week or two to see if NYA remains below 15138. If so, there will be lots of downside pain ahead 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 Sunday, 5/28/23: Despite the euphoric AI orgy rally on Friday, the NYA was unable to move back above the 40-wk MA at 15139. Price rallied to 15119 on Friday then fell on its sword. If you are bullish and chasing the rally, you better hope that NYA moves above 15139, otherwise, you will lose your shirt.

Note Added Friday, 6/2/23, at 6:05 AM EST: The NYA comes back up to 15031 with a HOD yesterday at 15070 within striking distance of the 40-wk MA at 15139. NYA fell through the critical 40-wk MA last week so price may be performing a back kiss now to make sure it wants to go down (bounce or die decision at 15139). If price goes up to 15139 and fails, Katy bar the door since there will be very bad stuff beginning for the stock market. Bulls may be able to usher-in a couple more weeks or so of buoyancy in stocks if NYA pops above 15139. US Monthly Jobs Report drops in a couple hours.

Keybot the Quant Turns Bearish

Keystone's trading robot, Keybot the Quant flips to the short side yesterday at SPX 4128. Watch volatility, the NYA, retail stocks and chips. VIX 19.25 is a key bull/bear line in the sand right now with VIX trading in real-time at 19.38 only pennies away. If stocks rally today due to the NVDA AI hype, and the VIX does not drop below 19.25, the rally is phony-baloney and will roll over to the downside. Bulls must send NYA back above 15138, otherwise the stock market will fall apart.

Keybot the Quant

CPCE Put/Call Ratio Daily Chart; Rampant Complacency Forecasts Big Drop in Stocks Coming

The fuse is lit. The low put/call ratios predict selling ahead for the stock market probably between 150 and 400 points of downside for the SPX. More worrisome is the failure in the utilities that tells you a far more serious breakdown is in play going forward for stocks for the weeks and months ahead that may make a 400 point drop in the SPX look like child's play.

Plan accordingly if long. Keystone does not own many longs. Pot stocks are still favorites on the long side. Perhaps in a big selloff people are going to want to smoke their worries away. 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.

AMZN Amazon Weekly Chart; C&H; Overbot; Negative Divergence Developing

The C&H (cup and handle) pattern mentioned 3 weeks ago for Scamazon continues on its merry way. Tech stocks are on a big run higher, the Nazzy 100 is an orgy, the AI hype is off the charts, chips are bid higher, and AMZN, AAPL, NVDA and other big players continue higher one fool buying off the other fool.

The bottom call in AMZN as the year began was easy-peasy as the green lines show. All the indicators were positively diverged so price was loaded up with rocket fuel and on the launchpad. Stochastics were oversold, as well as the RSI near and previously at oversold levels, both agreeable to a recovery move higher. The Aroon green circles show that at the bottom in price, bearish traders (red line) were at their maximum and bullish traders (green line) were also convinced that AMZN would simply continue lower. It is a contrarian indicator and price bounces from all this positivity to begin the year.

The C&H pattern forms with 103 head and 84 bottom of the cup so that is 19 points. Adding 19 to the breakout brim level of the cup at 103 is 122 upside target. Keystone's 80/20 Rule says 8's lead to 2's on the way up and 2's lead to 8's on the way down. Thus, pay attention to 118 because a move higher and couple days of closing above 118 tells you that 122 is likely.

The red lines show neggie d in play. The MACD line and stochastics, however, remain long and strong wanting another high in price on the weekly basis. Amazon is close to topping-out on the weekly basis but not yet. It appears the timing is in sync with the debt ceiling talks that are ongoing between the corrupt demopublicans and republocrats on crony Capitol Hill. The stoch's are overbot and agreeable to a pullback so even though the line slopes higher, she will probably top out over the coming days and couple weeks.

The MACD line likely needs a jog move (down-up) to put her into negative divergence. Price is soggy to begin this week, hence the red candlestick, and displaying neggie d as described. The Aroon also shows that the bulls are completely confident that Amazon will continue far higher and the bears are also convinced that the bulls are right. Aroon is a contrary indicator so it is telling you that the price action is toppy on the weekly basis.

What does all this mumbo-jumbo mean? Amazon may be soggy this week but the long and strong MACD line says another high is ahead on the weekly basis probably the first few days of June as the debt ceiling deadline comes to a head. At that time, check to make sure the MACD goes neggie d as price makes the matching or higher high, joining the other indicators in negative divergence, and if so, you can call the top in AMZN on the weekly basis. A multi-week downturn will then begin as price receives the neggie d spankdown.

For now, she is not there yet. Watch 118 since that may paint the way to the 122 C&H target. If bearish, you want price to tag 118+ and the MACD line to show neggie d and the top in place. The next week or two will tell the story.

Keystone is not in AMZN long or short. Best to wait a week or two and watch the chart as described. The low put/calls and utilities collapse tells you bigtime selling in stocks is at hand and will begin anytime forward (probably 150 to 400 points of downside for the SPX). Stay alert if long stocks because you may only be wearing a loin cloth a couple-three weeks from now.

As soon as the MACD line goes neggie d and joins the other chart indicators, the top is in on the weekly basis, probably anytime over the next 2 weeks. You can use this same analysis for the other high flyers like NVDA and AAPL. When the weekly chart goes neggie d, you can look at the 2-hour chart to time an entry for the short side. 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.

USD US Dollar Daily, Weekly and Monthly Charts; Sideways Channel at 101-105; H&S; Megaphone (Expansion) Pattern Long-Term

It is a good time for another dollar dissertation. Here is a link to the previous charts of the US dollar to come up to speed with the saga. A few weeks ago, Keystone highlighted the battle on the greenback's weekly chart between the potential H&S (head and shoulders) chart pattern and the developing positive divergence. That is a good place to start.

On the dixie's (DXY; USD) weekly chart, the blue H&S remains in play. Price fails at the 102 neckline and teases the 100 psychological level and bounces. The neckline was violated hinting that the H&S will likely play out in the future. The head is 113 and neck at 102 so that is 11 points difference. Thus, the downside target for the H&S pattern is 102 minus 11 bucks or 91.

The green lines on the weekly chart, however, show the possie d in play (that was mentioned a few weeks ago). USD was loaded up with fuel to rocket higher 2 weeks ago since all the chart indicators are positively diverged (sloping higher; diverging higher against the dollar price that drops to matching or lower lows). Voila, the dollar bounces.

You can clearly see the positive divergence on the daily chart making the rally call simple. The weekly chart shows long and strong indicators so more upside on the weekly time frame is expected. Watch the RSI to see if it moves higher into bull territory above 50%, or not. If so, it verifies that a few weeks of up will continue.

Typically for a H&S pattern, price will fail at the neckline, then come up for a back kiss of the neck, sounds sexy, then a failure with price dropping to the downside target. The dollar bounces after the neckline failure but pops up through the neck and tests and overcomes the 20-wk MA at 102.68 (this will likely need a back kiss before price moves higher on the weekly basis).

The 101 to 105 multi-month sideways channel remains in play as shown by the thick purple lines on the daily chart and the thin purple lines on the weekly chart. Keystone likes purple crayons because they taste like grapes. Obviously, dollar bulls win big above 105 and dollar bears will be euphoric below one hundo one. It is noise between 101 and 105.

On the daily chart, the orange circle shows a juicy upside gap at 105-ish that needs filled so perhaps price wants to go up to finish that business before beginning the longer-term downside again. As mentioned, the green lines on the daily chart show the possie d that developed during April launching price higher. USD bounces from the lower standard deviation band, through the middle band, which is also the 20-day MA at 101.78, and up to the upper band violation. This puts the middle band at 101.78 and rising sharply on the table as a downside target.

Staying with the daily chart, you see price rallying higher each day, jumping above the 50-day MA at 102.06 that will need a back test, and the MACD line and ROC remain long and strong wanting to see more price highs on the daily basis. The RSI, histogram and stochastics, and overbot stoch's, want price to roll back over to the downside but she will not top-out until all the indicators go neggie d. Thus, the upper channel rail and juicy gap at 105 are very much in play.

The possie d on the daily and weekly charts team-up to create the rally in the dollar over the last 2 weeks that wants to continue for a few more days in the daily time frame and continue for another 1 to 4 weeks, or more, on the weekly basis.

So it looks like the US dollar has short-term oomph and 105 is the upside target over the next couple weeks. Interestingly, a rise in the dollar would jive perfectly with a pullback in the stock market as the complacent put/call ratios and the ominous utilities predict (see previous charts).

Okay, so short-term, the dollar should remain buoyant and try to float up to 105 in the coming days and couple weeks or so, but what happens after that (when the weekly chart once again forms negative divergence so a top can be called on the weekly basis)? The monthly chart will help answer that question.

Remember, trading is playing 5-dimensional chess where you must balance the time frames (minutes, hours, days, weeks, months) against each other to form the path forward for price.

The USD monthly chart shows the megaphone pattern, or expansion pattern if you prefer, in play over the last decade. It is easy to see that dixie has a date with sub 90 numbers in the long-term (months and years ahead).

For now, the dollar bulls rule the roost in the daily and weekly time frames and the RSI, histogram and ROC on the monthly chart help create the buoyancy in the buck over the last couple weeks. Note, however, the MACD line and stochastics remain weak and bleak wanting to see lower lows in the dollar as the months play out in sync with the expansion pattern that wants price to venture lower over the long-term.

The blue two-leg bull flag pattern was satisfied on the monthly chart. Price is clinging to the 20-month MA at 102.35 making a bounce or die decision. Watch the RSI on the monthly chart because when it rolls back over and drops below 50% into bear territory it will tell you that the demise of the buck is beginning and the H&S pattern on the weekly chart will begin to flex its muscles.

What does all this mumbo-jumbo mean? All this fancy talk is something you hear from used car salesmen, politicians or a guy selling refrigerators to Eskimos. Balancing the time frames for the US dollar, the expectation is for further upside in the buck for 1 to 4 weeks, perhaps a bit more, with 105 the target, in concert with US stocks dropping, but then the buck will roll back over to the downside on the longer-term basis (months ahead) to honor the weak and bleak indicators on the monthly chart.

For now, the US dollar is making a New York Comeback, as Lucinda and the Boss sing. Keystone is not trading currencies 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 6:09 AM EST: USD is at 103.51 teasing the highs from Thursday. It is important to see if price continues higher from here, or not, since it is testing the resistance from a few days ago. Euro drops to 1.0774. Check that, dixie is now up to 103.56. She's starting to run higher.

Note Added Thursday Morning, 5/25/23, at 5:03 AM EST: Bingo. Old guys say bingo a lot. USD 104.06. The high in the dollar a few minutes ago was 104.16.

Note Added Tuesday, 5/30/23: USD 104.44.

Note Added 5/31/23: USD 104.61 (very close to the 105 upper channel rail).

Note Added 6/1/23: USD prints a high at 104.44 then falls on its sword down to 103.44 now at 103.50.