Sunday, May 1, 2016

RUT Russell 2000 Small Caps Rising Wedge Overbot Negative Divergence Battle for the 150 MA Slope

The 150-day MA slope is a critical cyclical (weeks and months) stock market signal. The other three major indexes, SPX (S&P 500), INDU (Dow Industrials) and COMPQ (Nasdaq Composite), already display upward-sloping 150-day MA's signaling a cyclical bull market pattern ahead. The RUT is the lone dissenter and the drama now reaches a creschendo since the 150-day MA is dead flat. The last two days the moving average is 1105.46 on Thursday and then 1105.41 on Friday. The slope is still dropping losing 5 cents but the bears are running out of runway. The only way to curl the 150-day lower is for price to move under it but price remains about 25 handles above.

If the RUT 150-day MA slopes higher over the coming days, couple weeks, say over the coming month, then the stock market is in a cyclical bull market pattern and bulls will celebrate. However, if the RUT 150-day MA remains flat and then rolls back over to the downside (which means price will be dropping under 1105 and under 1000 and lower), that is big trouble for the stock market as the other three indexes will likely follow and the stock market could  take a serious stumble lower.

Check the 150-day MA slope for all of your stock positions. If you are long a stock, you want the 150-day to be sloping higher to prove you have the wind at your back. If you are short that ticker, you want the 150-day MA to be sloping downward to prove that you have the wind at your back for the trade.

The red lines show an ominous rising wedge pattern, overbot stochatics, and negative divergence across all indicators. The MACD cross is negative. All these bearish signals create the spankdown (red arrow). The chart is weak hinting at lower lows ahead for price unless, of course, if the central bankers pump. The green lines show the oversold conditions, falling wedge and possie d (positive divergence) that created the mid-February low and bounced stocks higher. The collapses from rising wedges can be quite dramatic. 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

Market bulls remain relatively relaxed during the last few days with stocks drifting lower. The VIX remains under the 200-day MA at 18.56 and also under the 18.72 level which is identified by the Keybot the Quant algorithm as a key bull-bear line in the sand. Rest assured, if VIX moves above 18.56-18.72, the stock market will be tumbling lower in earnest.

But the VIX could not even close above the 50-day MA resistance at 15.70 which will be the first upside target for volatility. The bulls dab their cigarette ashes in the bears face remaining unworried or concerned about the minor stock market pull back. Bulls are fine with VIX under 18.56-18.72. Bears will be creating serious market carnage if VIX moves above 18.56-18.72. 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's and SPX S&P 500 Daily Charts Near-Term Bottom Approaching

The CPCE spikes higher to 0.86 and CPC to 1.16. Just as the lows put/calls indicate complacency and lack of fear (market top) the elevated readings indicate a tinge of panic and fear developing (a market bottom approaching). The elevated numbers are where prior recent put/call highs occurred which is where stock market lows occurred, however, note that these are only 3 to 5 day rallies that then peter out. In addition, there has not been a real good whiff of fear since the mid-February bottom so perhaps this time around markets may sell off further to spike the CPC and CPCE higher and create a more firm market bottom as traders are screaming and throwing stocks overboard with reckless abandon.

China economic data is soft on the weekend so traders will listen for talk of PBOC stimulus which would likely goose global stock markets higher. If the PBOC remains quiet, markets may start the week in a bad mood instead.

The put/calls suggest that chasing the short side may not be prudent. If already short, a move lower would be a good time to exit since the put/calls would likely print higher and commit to an imminent bottom in the stock market. A wash out lower on Monday and/or Tuesday would likely create a firm bottom for stocks while a move higher in stocks to begin the week will continue the choppy erratic malaise 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.

April Monthly Publication of Daily Chronology of Global Markets and World Economics 2016-04 is Available from Amazon; The "Panama Papers"; Central Bankers Active; Brexit; Exxon Credit Downgrade; Dollar/Yen 106-Handle

The April publication of the Daily Chronology of Global Markets and World Economics 2016-04 is available through Amazon (AMZN). The epic market action continues. The global stock markets begin the year by crashing and collapsing into 2/11/16. The prior monthly chronologies explain the huge crash from late December into mid-February. Then, as everyone was convinced that the stock market would go into free fall and sentiment was extremely negative, the bottom occurs and stocks rally from mid-February through April.

Italian, Spanish and Portuguese banks are a major problem in 2016 but the concerns temporary subside allowing for a recovery in global stocks. 
The US POTUS primary elections continue with Clinton the likely democrat nominee. Clinton may be undone by the ongoing email scandal. On the republican side, Trump and Cruz are battling for the nomination and the media is already awarding Trump the victory but they have been wrong every step of the way. The general election for the next US president is 11/8/16.

Central bankers such as the Fed, ECB, BOJ and PBOC keep pumping stocks higher. The chronology explains how the central bankers are the marketThe oil rally continues in April as the US dollar index drops like a stone now at the bottom of a key long-term range. The "Panama Papers" are released exposing secret accounts of governments, corporations and the wealthy elite class. The Panama Papers information and developing scandals will continue for weeks and months.

The Brexit drama continues with President Obama stepping into the fray with unwelcome comments. The Brexit referendum vote is 6/23/16. Japan is in turmoil. The BOJ has taken rates negative and they print record negative lows. The dollar/yen pair drops to a 106-handle which reflects a stronger yen that hurts exports. Exxon loses its AAA credit rating and epic event.

The chronology describes the reactions to economic data such as the Monthly Jobs Reports in real-time. There is no other document available on the world wide web that records the action in such detail. Inflation, that the Federal Reserve has tried to create for seven years with their obscene Keynesian programs, cannot exist without wage inflation occurring so each jobs report is very important.

The chronology explains the reaction in stocks, bonds and currencies to key events and economic data releases. If you are trying to make sense of the markets this is the resource for you. No other publication exists in this format where the stock, bond and currency moves are provided and explained as world events take place in real-time.

The chronology records economic history preventing revisionist tampering in future years. Many of the same asset managers telling everyone to go long the market in 2007-2008 repeated the same mantra through 2015. The stock market topped in May 2015 placing anyone that listened to television pundits over the last couple years underwater on their long trades and losing money.

Analyst and strategist quotes and words are recorded in the chronology so credit or disdain can be handed out in the future. If a multi-year top has printed, the chronology serves as the most accurate accounting of the stock market topping process ever recorded in historyThe chronology is the most reliable and easy to understand source for explaining global marketsThe chronology is very easy to read and avoids using fancy ten-dollar college words.

As always, all monthly publications of the Daily Chronology of Global Markets and World Economics are available from the links in the margins or simply searching on Amazon or Google. The monthly publication contains updated information not posted on this web site as well as clarifications and refinements to the ongoing daily blog text.

We are living through historic stock market and economic times. The daily chronology is the most accurate accounting on how the stock market tops and bottoms occur in real-time. The monthly publications are compatible with any electronic device and include an extensive Business Acronym List and Ticker Symbol List. The Acronym List is the most comprehensive business-related acronym list available on the internet. The chronology is not available in hard copy and only distributed around the world electronically.

Download this valuable resource today. Remember to support the KE Stone Series of blogs (Keystone the Scribe, The Keystone Speculator and Keybot the Quant) through donations, the daily chronology book sales and honoring advertisers that support the original free content provided in the blogs. The blog proceeds aid charities.

The free blog content is posted in proportion to the advertising, book and donation income received. Thus, you folks working at the large money-center banks around the world need to open your wallets if you want this unique trading and economic information, that is not available elsewhere, to continue.

The KE Stone Series of blogs are viewed by 100's of thousands of people around the globe each month including money managers, investors, students, traders, historians, economists, teachers, current event enthusiasts, hedge fund managers, political junkies and folks that truly want to understand how the world's economic systems and markets function. All readers should support the blogs to expand the information provided.

Tuesday, April 26, 2016

CPCE Put/Call Ratio and SPX S&P 500 Daily Charts Signal Near-Term Top At Hand

Traders are very complacent as the uber low CPCE put/call shows and this bullish euphoria signals a near-term top for stocks is at hand. The wine is flowing like water. Traders are buying small cap speculative stocks with reckless abandon. Safer plays such as consumer staples are kicked to the curb. Trades are buying risk because the central bankers will always support the stock market forever and Fed Chair Yellen will delay rate hikes and provide more easy money candy tomorrow.

The central bankers have manipulated the stock market higher since mid-March with the Draghi pump. Yellen's dovishness in late March provided more market joy. Then the Easter holiday expected bullishness plays out with price staggering sideways. Then more Yellen dovishness creates the mid-April rally. It is ridiculous. Markets are not allowed to fully correct for the last seven years. ECB's Draghi tried to jawbone markets higher last Thursday which did not help. The Fed decision is tomorrow. No one expects a cut. Will the FOMC statement disappoint? Market bulls get two bites of the apple since even if markets would sell off after the Fed announcement, the BOJ is on tap Thursday morning. The fate of the markets are in the hands of Yellen and Kuroda over the next 31 hours. Banzai!

Sticking to the charts and ignoring the sick central banker Keynesian behavior, the expectation is for stocks to top out at any time, likely within a day or two, probably a top this week, then down perhaps 30 to 100 SPX handles over the next week or two, followed by a rebound. The stock market near-term bottom will occur when the CPCE prints above 0.85. This information is for educational and entertainment purposes only. Do not invest based on anything you read or view here. Consult your financial advisor before making any investment decision.

Note Added Friday Morning, 4/29/16, at 7:51 AM EST: The opening bell for Friday is about 90 minutes away. The SPX is at 2076 testing the 20-day MA support at 2076 down from the high seven days ago at 2111; a 35-handle drop thus far. The CPC put/call ratio is at 1.00 remaining under the 1.20-ish level that would signal fear and panic. So traders remain relaxed about the selloff in stocks and are not concerned. Ditto the CPCE put/call that is at 0.77 remaining under the 0.85-0.90 level that would signal fear and panic and a tradeable market bottom. Thus, the expectation would be for more weakness in stocks until the put/calls print higher, above the  numbers listed, with traders wringing their hands, and that should identify the tradeable bottom to ride back up.

SPX S&P 500 Daily Chart Golden Cross

The SPX prints a golden cross yesterday with the 50 crossing above the 200. Note, however, that the golden cross failed in late December-early January maintaining the bear market action. The death cross occurred last August and the bulls continue to try and reverse the negativity.

As always mentioned by Keystone, when a golden cross typically occurs, price actually retreats and when a death cross occurs, price actually rallies, in the near-term. This is due to price having to trend that way for many weeks to create the crosses so once it occurs price has to reverse to take a rest. If the golden cross remains, stocks will be higher for the weeks and months ahead. If the death cross remains, stocks will be lower for the weeks and months ahead.

When the death cross occurred, note how price actually bottomed after the waterfall crash and recovered illustrating the concept mentioned. The death cross remained active so price was lower in the weeks ahead into the October lows. When the bulls tried to create the golden cross in late December note how price retreated. The expectation now would be for price to retreat with the golden cross, in the near-term.

The red rising wedge, overbot conditions and universal negative divergence across all indicators create the spankdown off the top at 2111 last Wednesday. The MACD cross is negative. The money flow is agreeable to some rising price action today but overall, the indicators remain weak and hint at lower lows ahead in the daily time frame.

Of course the central bankers control the markets and with the Fed decision tomorrow afternoon and the BOJ Thursday morning, the stock market remains a coin flip. The chart is weak but the central bankers may pump equities higher with dovish talk. The SPX weekly chart remains long and strong with the MACD line and money flow so higher highs are desired in price in the weekly time frame after the negativity in the daily time frame finds a bottom.

The CPC put/call drops to 0.76 another low value indicating rampant trader complacency. No one is worried since the central bankers always save the day. Will the central bankers save the day again this week or will they create carnage as their credibility falters? 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 Support, Resistance (S/R), Moving Averages and Other Key Levels for Trading the Week of 4/25/16

SPX (S&P 500) support, resistance (S/R), moving averages and other important levels are provided for the trading week of 4/25/16. Levels shown in bold are strong resistance and support. Bold and underlined levels are very strong and important S/R.

For 2016, the intraday high for the year is 2111.05 on 4/20/16 and the closing high for the year is 2102.40 on 4/20/16. The intraday low for the year is 1810.10 on 2/11/16 and the closing low thus far for the year is 1829.08 on 2/11/16. The intraday low in 2015 was 1867.01 on 8/24/15 and intrayear closing low for 2015 was 1867.61 on 8/25/15.

The SPX has exploded higher over the last month due to the central banker intervention especially the ECB and Federal Reserve. The highs for the year thus far printed last Wednesday. The SPX topped at the 2110-2114 resistance area and then retreated. Note how price got tangled up in the closing and intraday highs from last November and last December and did not have the energy to move up through, at this time. Pay close attention to that 2116.48 number going forward; if this is taken out, say the 2110-2116 resistance zone, then price will likely seek 2125-2135.

The SPX begins Tuesday at 2088. The bulls need to push up through 2089, which is strong price resistance, only one point higher, to create and upside acceleration. This appears on tap with S&P futures up +3. The bears need to push below 2078 to accelerate the downside. A move through 2079-2088 is sideways action for Tuesday.

If the bulls push up through 2089 then the 2093-2094 resistance test is next. The 2099 R is above that then 2102-2103. The 2102 is the closing high of the year and last December's high. Price remains elevated so the SPX will need to return lower for back tests of the moving averages. The golden cross (50-day MA up through 200-day MA) occurs yesterday a bullish signal for the weeks and months ahead, however, in the near-term, price typically retreats once the golden cross occurs. The golden cross failed in late December-early January so the SPX is giving it another go.

The bears need to push under the 2078-2084 gauntlet of support to make headway lower. Price would then seek 2074 in quick order for a bounce or die decision. If that fails, then 2071 S and 2067 S are next. April began at 2060. If the bears want a negative month to occur, they better get busy and dump another 30 S&P handles to push under the 2060. Friday is EOM with only four days of trading remaining.

The SPX was testing the important 12-month MA at 2030 one month ago and the bulls won. That price move results in the sideways to sideways higher move in stocks afterwards. The 20-day MA is 2072 and rising and will need a back kiss in the days ahead. The FOMC rate decision is tomorrow afternoon, 4/27/16. No one expects the Fed to hike rates. The BOJ provides its policy meeting decision on Thursday morning so trading will prove very interesting over the remainder of the week.

Looking at the near-term picture the strongest S/R is 2110-2114, 2102-2103, 2099, 2093-2094, 2089, 2079-2084, 2071, 2067, 2061, 2057, 2046, 2038-2040, 2032, 2017-2023, 2011, 2002, 1997, 1993 and 1985-1988.

Note: If the list below displays any blank spaces, view it in a different browser.

2135 (5/20/15 All-Time Intraday High: 2134.72)
2133 (7/20/15 Intraday High 2132.82)
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)
2116 (11/3/15 Intraday High: 2116.48)
2111.05 Previous Week’s High
2111 (4/20/16 Intraday High for 2016: 2111.05)
2110 (11/3/15 Closing High; 2109.79)
2104 (12/2/15 Intraday High: 2104.27)
2103 (12/2/15 Closing High: 2102.63)
2102 (4/20/16 Closing High for 2016: 2102.40)
2094 (12/29/14 Intraday High: 2093.55)
2091 (12/29/14 Closing High: 2090.57)
2089.37 Monday HOD
2087.79 Monday Close – Tuesday Starts Here
2079 (12/5/14 Intraday High: 2079.47)
2077.52 Monday LOD
2076 (11/28/14 Intraday High: 2075.76)
2075 (12/5/14 Closing High: 2075.37)
2073.65 Previous Week’s Low
2073 (11/26/14 Closing High: 2072.83)
2071.85 (20-day MA)
2071 (11/21/14 Intraday High: 2071.46)
2059.74 April Begins Here
2056.37 (200 EMA on 60-Minute Chart a Keystone Market Turn Signal)
2056 (11/18/14 Intraday High: 2056.08)
2046 (11/13/14 Intraday High: 2046.18)
2044 (12/31/15 Closing High: 2043.94)
2043.94 Trading for 2016 Begins Here
2038.00 (20-month MA)
2032.52 (12-month MA; a Keystone Cyclical Signal) (the cliff)
2028.28 (50-week MA)
2026.52 (100-week MA)
2021.98 (10-month MA)
2019 (9/19/14 Intraday High: 2019.26)
2017.85 (50-day MA)
2014.85 (200-day MA)
2011 (9/18/14 Closing High: 2011.36) (9/4/14 Intraday High: 2011.17)
2007 (9/5/14 Closing High: 2007.71)
2006.86 (150-day MA; the Slope is a Keystone Cyclical Signal)
2005 (8/26/14 Intraday High: 2005.04)
2003 (8/29/14 Closing High: 2003.37)
1994.73 (100-day MA)
1993 (1/15/15 Closing Low: 1992.67)
1992.94 (20-week MA)
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: 1980.90)
1968 (6/24/14 Intraday Top: 1968.17)
1963 (6/20/14 Closing High: 1962.87)
1956 (6/9/14 Intraday Top: 1955.55)
1951 (6/9/14 Closing High: 1951.27)
1943.03 (150-week MA)
1924 (5/30/14 Intraday Top: 1924.03) (5/13/14 Closing High: 1923.57)
1902 (5/13/14 Intraday Top: 1902.17)
1897 (5/13/14 Closing High: 1897.45) (4/4/14 Intraday Top: 1897.28)
1891 (4/2/14 Closing High: 1890.90)
1884 (3/21/14 Intraday Top: 1883.97) (3/7/14 Intraday Top: 1883.57)
1878 (3/7/14 Closing High: 1878.04)
1868 (8/25/15 Closing Low: 1867.61)
1867 (8/24/15 Intraday Low: 1867.01)
1859 (1/20/16 Closing Low: 1859.33)
1851 (1/15/14 Intraday Top: 1850.84)
1849 (12/31/13 Intraday High Top for 2013: 1849.44)
1848 (1/15/14 Closing High: 1848.38) (12/31/13 Closing High for 2013: 1848.36)
1829 (2/11/16 Closing Low for 2016: 1829.08)
1828.13 (200-week MA)
1814 (11/29/13 Intraday Top: 1813.55)
1812 (12/9/13 Intraday Top: 1811.52) (1/20/16 Intraday Low: 1812.29)
1810 (2/11/16 Intraday Low for 2016: 1810.10)
1809 (12/9/13 Closing Top: 1808.37)
1807 (11/27/13 Closing Top: 1807.23)
1799 (11/18/13 Intraday Top: 1798.82)
1798 (11/15/13 Closing Top: 1798.18)
1795.27 (50-month MA)

Sunday, April 24, 2016

MSFT Microsoft Weekly Chart Long-Term Sideways Symmetrical Triangle and Two-Leg Bull Flag Played Out

Mr Softy soiled the bed last week losing -7% after disappointing earnings. A long-term MIcrosoft chart shows two textbook chart patterns playing out before last week's debacle. The neon green sideways symmetrical triangle took about seven years to develop and the resolution was to the upside breaking out at 22. Note the fake-out break down from the triangle during the 2008-2009 financial crisis then the central banker easy money catapulted MSFT back inside the triangle and out the top side to new all-time highs.

The vertical side of the triangle is 25 to 32 handles, call it 30. So the breakout at 22 would target 52-54; bingo, it's there, actually a high near 57, satisfying the sideways triangle pattern in play for the last 20 years. Isn't that something? Remember chart patterns work the same in any time period whether it is on a minute, hourly, daily, weekly or monthly chart.

The neon blue shows a two-leg bull flag pattern playing out over 22 years. Mr Softy runs from 1.56 to 40.86 at the dot-com bubble, 39.30 points, then pop, the tech sector implodes. MSFT bumps along sideways with a slight downward bias for the next several years. This is textbook action for a bull flag. The center consolidation flag places a low at 12.50 and then price runs higher breaking out above the flag area so you know it has legs. Therefore, 12.50 + 39.30 = 51.80 as a price target; bingo, it's there satisfying the bull flag pattern.

MSFT was printing new highs last as the red lines show negative divergence in place and boom, price receives a spankdown as the neggie d dictates. 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 Ratios Daily Charts

The last chart of the CPC put/call shows the market top occurring due to the uber complacency, however, the SPX only retreats a paltry amount of points late last week, at least so far. After the last uber low CPC last Wednesday, the CPC spikes higher to 1.17 and the CPCE spikes higher to 0.85. The high numbers are in the area where a VST market bounce may occur, and this helped create the Friday recovery in stocks, but as seen by the charts, the stock market has not placed a proper sturdy bottom since February. Several uber low complacency readings occur in March and April but any start of a stock market pulll back has been snuffed out by central banker dovishness.

The 3/10/16-ish date jives exactly when ECB President Draghi fired his money bazooka. That was followed by Fed Chair Yellen's dovish rhetoric which created another boost in stocks, then the Easter bullish positivity played out, then Yellen jawboned more dovishness. This takes markets into the high last Wednesday-Thursday with Draghi once again at bat and he stands pat with the current stimulus plan (which is plenty of juice although the market weakness began after Draghi' s decision). The FOMC decision is this coming Wednesday.

It is shameful how the central bankers have pumped the stock market higher for seven years. They have destroyed price discovery as well as the concept of free markets. At this point, there has to be from 20% to 80% of fluff under the stock market after seven years of obscene Keynesianism. That will be an interesting sight when it all unravels at some point in the coming months.

The spikes to 0.85 for the CPCE and 1.17 for the CPC help create the bounce in the stock market last Friday as traders quickly became worried buying puts for protection so the tinge of fear creates quickie bottom action in the hourly time frame. The put/calls then drop on Friday's print.

The CPCE put/call ratio drops to the lowest level in over one month so traders are the most complacent and fearless in the last five weeks. The stock market is not an attractive buy until the bullish euphoria is washed away with tears of panic and sadness. To place a firm reliable stock market bottom, you want the CPC above 1.20 and the CPCE above 0.90.

The choppy action will likely continue. A pull back in stocks is long overdue. The complacency has not been rung out of the stock market as the charts show so the only way to do it is with panic and fear. The idea would be to exit long trades now and not consider the long side until the put/calls print above the green lines. The rising wedge is an ominous pattern for the SPX. The collapses from rising wedges can be quite dramatic. The Fed decision on Wednesday afternoon will be a key inflection point. 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.

Saturday, April 23, 2016

COMPQ Nasdaq Composite Daily Chart Overbot Rising Wedge Negative Divergence

The Nazzy is displaying negative divergence which creates the initial spankdown off the top. The overbot stochatics and the rising wedge are bearish indications. The ADX shows that the downtrend in price to begin the year was very strong but the two-month uptrend is not (ADX remains 22 or lower).

Price started to fill that huge gap at 4900-5000. The gap above is 5060-ish. The upper resistance is 5153. The chart is set up negatively and the collapses from rising wedges can be quite dramatic. The weekly chart indicates a preference to see higher highs say in May after any pull back occurs in the daily time frame. The 200-day MA at 4850 serves as a near-term target for a pull back where a bounce or die decision would occur. 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.