Tuesday, July 28, 2015

SPX S&P 500 Daily Chart 6-Month Sideways Channel Island Reversal Important Moving Averages

Stocks log a five-day downtrend after traders had become complacent and worry-free. Price came down to the 200-day MA at 2064 and bounced. The extremely important 10-month MA is also at 2064. The light blue lines show the island reversal pattern that occurred. About two weeks ago, price gapped higher and then spent 10 days on the island above 2080. Price then came back down and fell directly through the same gap as the upside creating the island reversal. Price will likely want to revisit this 2077-2080 area.

The dark blue lines show the ongoing six-month sideways channel through 2045-2130. Bulls win big above 2130. Bears win big under 2045. The battle continues in the middle. The red lines show negative divergence across all indicators across the five month time frame where price punched out new all-time highs. For the last few days, the indicators are weak and bleak wanting to see further lows after any bounce. S&P futures are up a robust +12 three hours before Tuesday's opening bell.

The slope of the 150-day MA is an important cyclical signal that you can use to gauge all your stock positions. Very simply, the stock or index is in a cyclical bull market pattern if the 150-day MA slopes higher and in a cyclical bear market pattern if the slope is downward. The pink line shows the steady rise over the last few months as traders drink Fed booze and inject ECB crack into their veins buying stocks regardless of price. The central bankers will always support the stock market so traders show little concern or worry. The pink circles show recent times where the 150 threatened to roll over but the central banks are always there to keep pumping and save the day. The early July flattening was rolling over but that was saved by the ECB that saved Greece. The spike higher and Greece bailout rally boosted the slope of the 150-day MA to make the bulls happy. Now the 150 is flattening again. Will the 150-day MA roll over and start sloping lower? If so, the stock market will trend lower for weeks, months and perhaps a year or two ahead.

On today's prospective bounce, watch the gap level discussed above at 2077-2080 and if that gives way an important battle will take place at the 150-day MA at 2084. Reference the prior SPX S/R missive for price levels that will attract price.

Keystone's proprietary trading algorithm, Keybot the Quant, remains long and is tracking financials and volatility. The market bulls need VIX under 13.85 to prove they have the beans for a sustainable upside rally. The market bears need to push XLF under 24.82 to accelerate the market selling and Keybot will likely flip short. If financials remain bullish, and the volatility remains bearish (VIX above 13.85), then stocks stagger sideways with an upward bias.

A key gauge to tell you market direction after the opening bell is the VIX 15.38 level (the 200-day MA). As explained in the prior chart (scroll back to review the chart), the bears will growl strongly above 15.38. If the VIX drops back under the 15.38 today, the bears got nothing. 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.

Monday, July 27, 2015

SPX Support, Resistance (S/R), Moving Averages and Other Important Levels for Trading the Week of 7/27/15

SPX (S&P 500) support, resistance (S/R), moving averages and other important levels are provided for trading the week of 7/27/15. Levels shown in bold are strong resistance and support. Bold and underlined levels are very strong and important S/R. The SPX all-time intraday high is 2134.72 on 5/20/15 and the SPX all-time closing high is 2130.82 on 5/21/15. The low for this year is 1980.90 which identifies the starting point of the huge February rally.

For Monday with the SPX starting at 2080, the bulls need to push above 2106 to accelerate the upside above 2110 in quick order, a formidable task. The bears need to push under 2077, only three points lower, to accelerate the downside. S&P futures are -7 about 2-1/2 hours before the opening bell on Monday morning. A move through 2078-2105 is sideways action to begin the week. The CPC and CPCE put/call ratio's are elevated so a near-term bottom should occur any day forward. Stocks may  become buoyant into and through the FOMC two-day meeting Tuesday and Wednesday.

The 150-day MA at 2084 is a critical resistance level. The slope of the 150-day MA is important in determining the cyclical path ahead and the moving average continues to threaten to flatten and roll over to the downside. The 150-day MA will move lower if price stays under. If bulls poke up through SPX 2084, the 2091 level is next and will occur quickly which then sets up an attack of the 2095-2099 resistance.

If the bears push under 2076-2077, a test of the 2072 support will occur quickly. The SPX began the year at 2059 so stocks are positive on the year by a smidge up +1.0%. July begins at 2063.11 with only five trading days remaining in the month. The key 10-month MA is at 2065 which signals serious trouble ahead for the stock market if it fails. The 200-day MA is 2064. The 12-month MA is 2052 which represents a cliff edge where stocks can collapse into complete free fall; at a minimum an acceleration lower would be expected.

Looking at the big picture the strongest S/R is 2135, 2131, 2126, 2123, 2121, 2118, 2114, 2110, 2099, 2091, 2081, 2079, 2076, 2072, 2067, 2061, 2056, 2046, 2040, 2038, 2032, 2030, 2023, 2019, 2011, 2002-2003, 1997-1998, 1993, 1988, 1985-1986 and 1982. The SPX moves choppy sideways through the 1990-2120 range for the last nine months with price attempting to break out above the 2120-2130 level in April, May, June and July but failing all four times. The 2050-2130 sideways channel range is in play for the last six months; an 80-point range. The March and July lows are at the 2040-2050 level which would create mayhem if this support fails.

2135 (5/20/15 All-Time Intraday High: 2134.72)
2133 (7/20/15 Intraday High 2132.82)
2132.82 Previous Week’s High
2131 (5/21/15 All-Time Closing High: 2130.82)
2130 (6/22/15 Intraday High 2129.87)
2128 (7/20/15 Closing High 2128.28)
2126 (4/27/15 Intraday High: 2125.92)
2124 (6/23/15 closing High: 2124.20)
2121 (4/24/15 Intraday High: 2120.92)
2120 (2/25/15 Intraday High: 2119.59)
2118 (4/24/15 Closing High: 2117.69)
2117 (3/2/15 Closing High: 2117.39)
2106.01 Friday HOD
2102.26 (50-day MA)
2100.29 (200 EMA on 60-Minute Chart a Keystone Market Turn Signal)
2096.45 (20-week MA)
2095.39 (100-day MA)
2094 (12/29/14 Intraday High: 2093.55)
2091 (12/29/14 Closing High: 2090.57)
2090.57.36 (20-day MA)
2083.88 (150-day MA; the Slope is a Keystone Cyclical Signal)
2079.65 Friday Close – Monday Starts Here
2079 (12/5/14 Intraday High: 2079.47)
2077.09 Friday LOD
2077.09 Previous Week’s Low
2076 (11/28/14 Intraday High: 2075.76)
2075 (12/5/14 Closing High: 2075.37)
2073 (11/26/14 Closing High: 2072.83)
2071 (11/21/14 Intraday High: 2071.46)
2064.75 (10-month MA; a major market warning signal)
2063.64 (200-day MA)
2063.11 July Begins Here
2058.90 Trading for 2015 Begins Here
2056 (11/18/14 Intraday High: 2056.08)
2053.07 (50-week MA)
2051.93 (12-month MA; a Keystone Cyclical Signal) (the cliff)
2046 (11/13/14 Intraday High: 2046.18)
2019 (9/19/14 Intraday High: 2019.26)
2011 (9/18/14 Closing High: 2011.36) (9/4/14 Intraday High: 2011.17)
2007 (9/5/14 Closing High: 2007.71)
2005 (8/26/14 Intraday High: 2005.04)
2003 (8/29/14 Closing High: 2003.37)
1993 (1/15/15 Closing Low for 2015: 1992.67)
1991 (7/24/14 Intraday Top: 1991.39)
1988 (7/24/14 Closing High: 1987.98)
1986 (7/3/14 Intraday Top: 1985.59)
1985 (7/3/14 Closing High: 1985.44)
1981 (2/2/15 Intraday Low for 2015: 1980.90)
1968 (6/24/14 Intraday Top: 1968.17)
1963 (6/20/14 Closing High: 1962.87)

Note Added Monday evening, 7/27/15: The SPX drops to an intraday low to begin the week at 2064 bouncing from the 200-day MA at 2064 and 10-mth MA at 2064. The battle will continue on Tuesday.

Sunday, July 26, 2015

VIX Volatility Daily Chart

The 200-day MA on the VIX chart is a key short term market signal; above the 200-day MA is bearish; below bullish. The VIX begins the week at 13.74 well under the 15.37 level keeping the bulls in charge. The major selling events this year were in January which gave way to the February rally (VIX drops under 200-day signaling the all-clear) and in March and late June-early July. When the VIX drops under the 200 the fix is in and bulls win.

Keybot the Quant, Keystone's proprietary trading algo, identifies VIX 13.85 as the most important parameter currently impacting broad stock market direction. On Friday, the VIX ran above 14, the HOD is 14.73, and it looked like time for the bears to growl. The growl turns into a whimper, however, when VIX drops back below the 13.85 level. Thus, markets will remain in happy bull mood if VIX is under 13.85. Market selling will occur if VIX moves above 13.85 but bulls should be able to keep the selling to a short term event if the VIX stays under 15.37. Above 15.37, and the stock market will be dropping like a stone. These levels will remain in play all week long give or take a few pennies either way. 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 Monday evening, 7/27/15: The VIX jumps above both the 13.85 and the critical 200-day MA at 15.38 ushering in market negativity. Tuesday is very important trading to see if the bears can keep the VIX above 15.38, or not.

Saturday, July 25, 2015

SPX S&P 500 2-Hour Chart

As mentioned in the prior SPX 1-hour chart, the 2-hour chart indicators were weak and bleak wanting to see price weakness into Friday afternoon, which occurred. Here is a look at the 2-hour and the indicators remain weak and bleak so lower lows in SPX price would be anticipated after any weak bounce occurs, in this 2-hour candlestick time frame.

The RSI is oversold, ditto the stochastics, which sets up for a bounce ahead. Price came down to 2079 stopping at a large gap from 10 days ago at 2076-2080. The SPX is under the 150-day MA at 2084 a negative market signal. The critical 10-month MA, watched by the old-timer's, is at 2065. The 2065 is critical support so price may want to tap on this level and make a bounce or die decision. July began at 2063.11 and the year began at 2058.90 adding more drama to this general price area. The 200-day MA is 2063-2064.

Encompassing the 150-day MA, 200-day MA, 10-mth MA and horizontal price S/R, this 2063-2086 level is an important bounce or die battle zone. Bulls win big above 2086 and stocks will likely run to 2100 in quick order. Bears win big under 2063. Under 2056 and large serious losses will begin mounting for the stock market as equities slide down the rabbit hole and the potential end to the six-year rally begins.

The indicators are weak and bleak as highlighted above so it may take from one to four candlesticks to turn the indicators into positive divergence, especially the MACD line, so 1 to 4 candlesticks are 2 to 8 hours trading time; so a bottom may occur in stocks anytime Monday or Tuesday. One or two up-down jog moves, with a lower low in price, may occur until the MACD line turns possie d, then the bulls will be back at bat. 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 and CPCE Put/Call Ratio Daily Charts Signal Near-Term Bottom At Hand

The CPC and CPCE put/call ratio's leap higher on Friday indicating palpable worry, fear and angst by traders. A tradeable bottom in stocks is at hand and will begin anytime in the days ahead. Usually the snap-backs are sharp which hints that Monday may be a rally. The central banks control the markets so if the PBOC (China) announces more stimulus today or tomorrow, of if the BOJ (Japan) or ECB (Europe) print more money early next week the bounce will begin quickly. If the central bankers remain quiet some further weakness in stocks may occur early in the week to further develop a bottom but the put/calls say a near-term bottom is on tap for stocks in the days ahead say beginning anytime next week.

The FOMC two-day meeting is on Tuesday and Wednesday so stocks will likely float higher into Fed Chair Yellen's promises to run the printing presses dropping dollars from helicopters indefinitely. This bullish outcome is in sync with the charts above.

The green circles show the recent forecasts for stock market bottoms and the red circles are predictors of market tops all of which occur. The put/calls are elevated right now; what do you think will happen? 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.

Friday, July 24, 2015

SPX S&P 500 60-Minute Chart 200 EMA

The SPX is above the 200 EMA on the 60-minute at 2101.17 signaling bullish markets for the hours and days ahead, however, price fell under the 200 EMA yesterday but closed above. This battle will continue today and the stakes are high. Bulls win big if the 2101 support holds; the SPX will move up to the all-time highs. Bears win big if 2101 fails; the 2080's will be targeted as a first stop lower.

The green lines show a 'W' pattern bottom (bullish), positive divergence and oversold conditions that created the bounce. The Greece resolution occurs and the bulls never looked back. The SPX jumped above the 200 EMA punching the bears in the face. For the 'W' pattern bottom, the 'W' is from 2045 to 2085, to keep the math easy, 40 points, so the 2125 level is targeted to the upside, which occurs satisfying the 'W' pattern. The red lines show the rising wedge pattern (bearish), negative divergence and overbot conditions creating the spank down from the top. Price is now attempting to bounce and S&P futures are up +5 with the Friday session set to begin in about three hours.

The indicators are positively diverged (thin green lines) supporting a bounce, however, the MACD line is weak and bleak wanting price to come back down again for a lower low after the bounce. So stocks may start the day buoyant but into lunch time may falter and perform a major test of the 200 EMA. The RSI never reached oversold levels as yet so that remains on the table. A falling wedge pattern (bullish) may be developing and an up-down jog move would print in the apex of the wedge at the 2097-ish level. After a couple hours of trading check the chart to see if positive divergence is occurring with the MACD line, or not.

Watch the 200 EMA at 2101.17 since it determines the winner going forward for the hours and days ahead. The SPX begins at 2102 giving the nod to the bulls to begin the day. The SPX 2-hour chart shows stochastics wanting to support a bounce early in the day but the RSI, MACD line, histogram and money flow are all at lower lows, weak and bleak, so in the 2-hour time frame lower lows in price are desired for at least a couple candlesticks forward which would be 4 or 5 hours out which places stocks into this afternoon's trading. 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 Saturday, 7/25/15: The market bears came to play yesterday slapping stocks lower. The SPX tumbles through the 200 EMA signaling bearish markets for the hours and days ahead. The bears are in good shape going forward as long as the SPX remains under the 200 EMA on the 60-minute chart at 2100.29 drifting lower; call the 2100 level the line in the sand for the 200 EMA and for the stock market for near-term trading.

SPX S&P 500 Daily Chart Three Black Crows

The SPX prints three down days in a row creating a 'three black crows' candlestick pattern. The pattern confirms the trend change off the top and forecasts a weak stock market ahead. The pattern occurred in March with prices closing at the intraday lows, however, after a fourth down day stocks recovered in the spring time rather than fail. Interestingly, price did retreat again in late June early July to come back down to the late March lows, where the Greece resolution bounce occurred.

The 50-day MA is 2103 and price is at 2102 so a pivot will occur from this level today. Bulls win above 2103. Bears win below 2103. Time will tell if the three black crows lead to further market weakness this time around. 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.

Thursday, July 23, 2015

CPC Put/Call Ratio Daily Chart

As highlighted last week, the low CPC and CPCE put/call ratios signaled a near term market top due to complacency and lack of fear; and it occurs. Stocks floated higher for a few days and are now reversing receiving the spank lower. The expectation is that the bears should flex their muscles sending the stock market lower until the CPC moves above 1.20 to show that fear and panic is in the markets. A move above 1.20 will signal a tradeable near-term 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.

SPXA150R S&P 500 Stocks Above 150-Day MA Weekly Chart

The chart shows the number of stocks above their respective 150-day MA's. During the robust stock market party in 2013, 2014 and into this year, there are consistently 75% or more of stocks above their critical 150 MA. Now, there are only one-half of the stocks in the S&P 500 above their respective 150 MA. This is a bearish signal for equities going forward. A strong bull market should maintain the SPXA150R above 68%-70%. Bears are in control under 70% (for a continuing trend lower). If the chart drops under 38%-40% that will signal a reversal to the upside on tap for equities just like after the August 2011 market crash. 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.

NYHL NYSE New Highs-New Lows Weekly Chart

In a robust and strong stock market, you want to see a broad-based rally since that has staying power and long legs. The green upward-sloping channel verifies the upside party in stocks after the August 2011 waterfall crash. As stocks made new highs, more individual stocks were printing new highs verifying broad market strength. Now, not so much.

The red channel shows the consistent lower lows and lower highs in the NYHL going forward. This signals that fewer and fewer stocks are making new highs. Since the stock indexes remain near record highs, these stocks are obviously propping up the market. The concept is verified by the wild upside party in tech stocks a couple weeks ago including AAPL, FB, AMZN, NFLX, GOOGL. The lock was broken open on the liquor cabinet door at the NYSE so traders could celebrate the never-ending bull market fueled by central banker Keynesianism.

The problem with fewer stocks leading the gains in the indexes is that when these stocks pull back the shock to the broad indexes to the downside can become very dramatic. Less new highs and more new lows in the stock market indicate trouble ahead for equities. 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.