Monday, September 29, 2014

SPX 30-Minute Chart 8/34 MA Cross Downward-Sloping Channels

The 8 MA moves above the 34 MA on the 30-minute signaling bullish markets for the hours ahead, however, the 8 MA is moving sideways only marginally above the 34 MA showing that the bulls and bears continue to fight. The 8 MA will curl down wards for a potential negative cross as long as the price stays under 1978 and moves lower. The SPX is below the 200 EMA on the 60-minute chart at 1986.64 signaling bearish markets for the hours and days ahead. Either the 30-minute chart above or the 60-minute chart will flinch to confirm the market direction forward. The 1985-1988 resistance level is a formidable gauntlet and a very important bull-bear battleground area.

The indicators above are moving sideways. Watch the 50% levels for RSI and stochastics to see if price is leaning bullish or bearish (both are currently sub 50% preferring to see further weakness ahead). The downward-sloping red channels are in play. The SPX S/R highlighted this morning in the previous missive are 1985-1986, 1976.72 (50-day MA), 1973, 1966 (last week's lows), 1963 and 1960-1961. Price bounced from the LOD at 1964. Watch the 8/34 cross to see who wins going forward. This information is for educational and entertainment purposes only. Do not invest based on anything you read or view here. Consult your financial advisor before making any investment decision.

Note Added 11:13 AM: The SPX is fighting along the 50-day MA at 1976.72 and must make a bounce or die decision. If price overcomes the 50-day MA a move to test the strong overhead resistance at 1985-1986 is likely on tap.

Note Added 11:16 AM: Bounce. The SPX pierces up through the 50-day MA; see if it can hold above for 7 to 10 minutes, if so, then price will likely settle in sideways today and float towards the 1985-1986 resistance. Bears need to spank price back under the 50-day MA immediately.

Note Added 11:26 AM: SPX 1979. Dollar/yen 109.36. The battle continues. Bulls win above the strong 1985-1988 resistance. Bears win under the 50-day MA support at 1977. Price bumped its head up against the upper red trend line at 1979-1980 printing the HOD at 1979.95. Bulls and bears are both drama queens as the market theatrics continue.

Note Added 11:28 AM: BPSPX loses the 70% level to 69 for a double whammy sell signal. Scroll back to the BPSPX chart several days ago or type 'BPSPX' in the search box at the fight to bring up the prior charts for further study. Bad things will happen to the equity markets including another strong leg lower if BPSPX stays under 70.

SPX Support, Resistance (S/R), Moving Averages and Other Important Levels for Trading the Week of 9/29/14

SPX (S&P 500) support, resistance (S/R), moving averages and other important levels are provided for trading the week of 9/29/14. 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 2019.26 on 9/19/14 and the SPX all-time closing high is 2011.17 on 9/18/14. The bears are fighting back against the perpetual central banker easy money.

For today with the SPX starting at 1983, the bulls need to move above 1986 to create an upside acceleration that will quickly target 1991. The bears need to push under the 1966 low from Friday and last week to accelerate the downside. S&P futures are down -13 as this is typed one-half hour before the opening bell which would target the 1970-ish level for the SPX. A move through 1967-1985 is sideways action to begin the new week of trading.

The drop projected for the opening bell targets the support at the 50-day MA at 1976.76 and also the strong support at 1973. These two levels can be used as a guide to gauge the power of the down move, or lack thereof. The overhead resistance at 1985-1988 is a strong, sturdy and important ceiling. Just as it was important and bear-friendly when this level failed, especially the 1985-1986 level (was support now resistance), the bulls can only regain their mojo if they move back above 1985-1988 so monitor this level closely. There are only two days remaining in the month that began at 2003.37 so this level must be respected early in the week. September is set to print a negative month unless the bulls can overcome 1985-1988 R and make a run higher. Watch 1977, 1973, 1966 and 1960-1961 support levels. Losing last week's lows at 1966 will create ugliness for the week ahead.

2019 (9/19/14 All-Time Intraday High: 2019.26) (9/19/14 Intraday High for 2014: 2019.26)
2013
2012
2011 (9/18/14 All-Time Closing High: 2011.36) (9/18/14 Closing High for 2014: 2011.36) (9/4/14 Intraday High: 2011.17)
2010
2009.08 Previous Week’s High
2009
2007 (9/5/14 Closing High: 2007.71)
2006
2005 (8/26/14 Intraday High: 2005.04)
2004
2003 (8/29/14 Closing High: 2003.37)
2003.37 September Begins Here
2002
1999
1998
1997
1995.55 (20-day MA)
1995
1993
1991 (7/24/14 Intraday Top: 1991.39)
1988 (7/24/14 Closing High: 1987.98)
1986.95 (200 EMA on 60-Minute Chart a Keystone Market Turn Signal)
1986.37 Friday HOD
1986 (7/3/14 Intraday Top: 1985.59)
1985 (7/3/14 Closing High: 1985.44)
1983
1982.65 Friday Close – Monday Starts Here
1982
1980
1978
1976.76 (50-day MA)
1976
1973
1970
1968 (6/24/14 Intraday Top: 1968.17)
1966.22 Friday LOD
1965.99 Previous Week’s Low
1964
1963 (6/20/14 Closing High: 1962.87)
1961
1960.55 (20-week MA)
1960
1959
1958
1956 (6/9/14 Intraday Top: 1955.55)
1955.65 (100-day MA)
1951 (6/9/14 Closing High: 1951.27)
1949
1947
1942
1940
1937
1936
1931
1929
1928
1925.13 (150-day MA; the Slope is a Keystone Cyclical Signal)
1925
1924 (5/30/14 Intraday Top: 1924.03) (5/13/14 Closing High: 1923.57)
1923
1920
1917
1912
1910
1907
1904.74 (10-month MA; a major market warning signal)
1902 (5/13/14 Intraday Top: 1902.17)
1901
1897.66 (200-day MA; not tested for 22 months extremely odd behavior)
1897 (5/13/14 Closing High: 1897.45) (4/4/14 Intraday Top: 1897.28)
1894
1891 (4/2/14 Closing High: 1890.90)
1889
1886
1885
1884.14 (12-month MA; a Keystone Cyclical Signal) (the cliff)
1884 (3/21/14 Intraday Top: 1883.97) (3/7/14 Intraday Top: 1883.57)
1882
1880
1879
1878.50 (50-week MA)
1878 (3/7/14 Closing High: 1878.04)
1877
1874
1872
1871
1868
1867
1865
1862
1859
1855
1853
1852
1851 (1/15/14 Intraday Top: 1850.84)
1849 (12/31/13 Intraday High Top for 2013: 1849.44)
1848.36 Trading for 2014 Begins Here
1848 (1/15/14 Closing High: 1848.38) (12/31/13 Closing High for 2013: 1848.36)
1846
1845
1843
1842
1841
1840
1839
1838
1837

Note Added 10:57 AM:  The SPX drops to the 1964 support listed above and bounces. So the critical lows at 1966 hold on the first attack. Price recovers as the Fed POMO pump kicks into gear between 10 AM and 11 AM as usual. The central bankers are the market. The 1973 S/R and 50-day MA at 1976.69 are playing an important role in today's price action.

Friday, September 26, 2014

FVX 5-Year Treasury Note Yield Weekly Chart Rising Wedge or Ascending Triangle

Just as there is a fine line between love and hate, or victory and defeat, there is also a fine line between a rising wedge and ascending triangle. The red rising wedge pattern is bearish while the ascending triangle is bullish. Typically, a rising wedge will show an upper trend line that clearly slopes higher. For the 5-year yield chart above, the top trend lines are very near each other and flatter in nature. Starting with the bond and note bears (looking for lower Treasury prices and higher yields), the green ascending triangle would pave the way. The vertical side of the triangle is 70 basis points so a breakout from the 1.80% upper base line would target 2.50%.

For the bond and note bulls (looking for higher Treasury prices and lower yields; perhaps a flight to safety if a dramatic downturn occurs in the global economy and markets), the red rising wedge will pave the way lower as yield collapses from the rising wedge. The red lines show negative divergence across all indicators for the last one year. There is some near-term juice available in the few-month time frame. So yield can stumble along sideways for a while but would be expected to move sideways to sideways lower honoring the red rising wedge pattern. The chart will have to be monitored each week forward to see if the situation changes.

The ADX line shows a strong upward trend in yields during late 2013 and early 2014 (pink box) but the trend petered out into a sideways stumble currently. The yield is above the 20-day MA above the 50-day above the 200 so a mean reversion will be needed. The top thin neon blue line is at 1.877% and must be watched closely. Note that there is upside space remaining in the red rising wedge and the near term strength in the indicators can allow yield to play in the 1.80%-1.90% range for the next month. A decision must be made, however, over the coming days and weeks. Price is sneaking up and out of the ascending wedge and back kissing the 1.78%-1.80% breakout area which encourages those looking for higher yields.

The projection is for the 5-year to play around at these current levels, 1.75%-1.90% for the upcoming days and weeks, say a week or three, and the expectation is for the rising wedge to win out causing yield to move lower down to the 20-week MA at 1.66% for starters. The chart can be reassessed as time moves along and the ascending triangle must be watched and shown respect over the next month. 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 9:45 AM:  The 5-year Treasury yield spikes this morning to a HOD at 1.80% and is now printing at 1.786%.

Note Added 10:18 AM on Saturday, 9/27/14: The 5-year is at 1.802%. Yields move higher as bond king Bill Gross leaves PIMCO, the  company he founded, and joins Janus.

Thursday, September 25, 2014

BPSPX Bullish Percent Index Daily Chart

Now is a good time to check the BPSPX signal. A market buy signal occurs when the BPSPX reverses and moves six percentage-point higher. The all-clear double-whammy buy signal occurs when price then moves above 70% signaling nothing but blue skies ahead for bullish traders. A market sell signal occurs when the BPSPX reverses six percentage-points to the downside. The double-whammy sell signal occurs when price falls under 70%.

The BPSPX fell from 85 to 79 off the top so the bears receive and are currently enjoying a market sell signal since early July (type 'BPSPX' in the search box at the right to bring up prior charts for further study). The bears were drinking champagne and celebrating as they were about to drop under the 70% level receiving the double whammy sell signal, however, instead the bulls stage the comeback rally. From 71-ish, the bulls needed to hit 77-ish to signal the all-clear for bullish upside fun. It appeared a done deal especially with the non-stop Fed money printing constantly sending stocks higher. Instead, the bears eat some spinach and punch the bulls in the face stopping the upside attempt to take control. The BPSPX is now down at 70% again.


The bears are so close to the double whammy sell signal they can taste it. Watch the BPSPX closely and check the number after the closing bell. If 70 is lost, markets are going to drop far more and grow far uglier. The bulls can save the day and stop the slide if they can keep the BPSPX above 70. If 70 is lost, all hope for the bulls is lost. The pivot from this 70% area is going to firmly tell you the market story going forward. This information is for educational and entertainment purposes only. Do not invest based on anything you read or view here. Consult your financial advisor before making any investment decision.


Note Added 8:59 PM: The BPSPX ends the session at 70.20. The bears are only twenty cents away from creating a market event that will send stocks strongly lower. The bulls remain in the game but there is no space remaining to 70.00. Bulls must bounce the BPSPX tomorrow or they will fall down the rabbit hole if 70 fails. The tension builds.

Note Added 10:15 AM on Saturday, 9/27/14: You cannot make this stuff up. The BPSPX closes exactly at 70.00. The pivot above or below come Monday morning will dictate the directional path ahead for markets for the next few days. If 70 fails, bad things will happen to the stock market. Bulls must come to play on Monday morning to send the BPSPX higher, otherwise, they will fall down the steps.

Note Added 11:33 AM on Monday, 9/29/14: BPSPX loses the 70% level to 69 for a double whammy sell signal. Bad things will happen to the equity markets including another strong leg lower if BPSPX stays under 70.

SPX 60-Minute Chart 200 EMA Cross

Price has been playing games over the last couple days above and below the important 200 EMA on the SPX 60-minute chart at 1988.61. (Reference the previous chart from a couple days ago.) As mentioned with the prior missive, bad things will happen to stocks if the 200 EMA fails, and it failed, so bad things are happening. A back kiss will be needed to the 200 EMA at some point forward. Note the drop over the last three hours began with the doji candlestick top.

With the large collapse, the indicators are positively diverging so price will likely stabilize sideways. A large drop like this is creating technical damage as evidenced by major stocks and indexes losing their 50-day MA's. The SPX 50-day MA is 1976.45 so look for price drama around this level today and perhaps into the closing bell. The 1973 is very strong support and price is stabilizing at this level.

The SPX drops under the 200 EMA signaling bearish markets for the hours and days ahead. The bears finally wrestle back control of markets after a never-ending bull party. Major S/R levels are 1985-1986, 1976.45, 1973, 1968, 1963, 1960-1961, 1951 and 1924. So price is playing around inside the 1968-1986 zone. Use the S/R levels as a guide. 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 9:05 PM:  The SPX ends at 1966 dropping 2 handles in the last one minute but the 1968 support held during the afternoon. The 1963 would be the next strong support. That is a strong support gauntlet at 1960-1963 which would send price to 1951 if it fails. The SPX will have to back kiss the 200 EMA at 1987.80 (call it 1988) at some point forward.

Note Added 10:20 AM on Saturday, 9/27/14: The SPX comes up to back kiss the 200 EMA at 1986.95; that did not take long. Price teases 1987 and then drifts lower into the closing bell on Friday closing at 1982.85 four points below the important bull-bear line in the sand keeping the bears in control. The longer that the SPX stays under the 200 EMA at 1987 the more the stock market negativity and selling pressure will increase.

SPX Daily Chart Tight Band Squeeze

The stock market drama continues with sideways choppiness resolving to the downside. Yesterday was a bull trap as the dip-buyers, trained like Pavlov's dog due to never-ending Fed easy money, ran into the long side only to have their head delivered on a platter this morning. The pricing behavior at this tight standard deviation band squeeze (pink lines and arrows) is remarkable and very atypical. Price hinted that the upside breakout would occur for the tight squeeze but price stalled at the upper band instead of continuing higher. So the bears had the ball and pushed lower looking like they will claim victory for the strong 80 to 90 handle band squeeze move but price stalled at the lower band. Yesterday the market rallies and it appears that the bulls were going to take the tight band squeeze to the upside with a big party to 2050 on tap. Now, today, the bulls are smacked in the teeth and the final result appears to be a squeeze move lower. (Tight band squeezes only tell you that a major move is coming but does not predict direction.)

The red lines show the negative divergence in place creating the two peaks and smack downs (red arrows). The indicators are weak and bleak wanting lower lows after any bounce occurs except for the money flow that is more optimistic wanting to see price recover quickly. The blue bars show how price retraced 100% of the down move from late July to early August and then topped out at the 1.24% Fibonacci extension area of 2009-2015.

Price has lost the lower red trend line and also back kissed the trend line with yesterday's rally resulting in collapse today. The SPX loses the 50-day MA at 1976.41 so monitor this key level. The tight band squeeze appears to be resolving to the downside and perhaps sliding down the lower band similar to the early August action. Price reversed from the 2020-ish top which targets 1930-1940 (based on an 80-90 point drop which was the relative moves for the prior squeezes in May and late July. Major S/R levels are 1985-1986, 1973, 1968, 1963, 1960-1961, 1951 and 1924. 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 9:10 PM:  The SPX remains under the 50-day MA for the first time in five weeks. The 100-day MA is 1954.50 and price bounced from the 100-day in early August when President Putin's words created the catalyst to begin the stock market rally move. The 150-day MA is 1924.23. As listed above, the downside target using the band squeeze move is 1930-1940. Strong support is at 1951 and 1924. Mixing all this together a confluence is formed at 1951-1955 and if that fails, a move to 1924-1930 may be in the cards. First, the bears would have to break down through the 1961-1963 support gauntlet.

Wednesday, September 24, 2014

RUT Russell 2000 Small Caps Daily Chart 150-Day MA Flattens Indicating Cyclical Bear Market

Here is an update on the RUT cyclical bear market saga. The 150-day MA is a critical moving average that identifies a cyclical bull market versus the cyclical bear market. You can check the 150-day MA for all your stock holdings to see if you are on the right side of the trade, or not. If the 150 is sloping upwards, a cyclical bull market is in play with higher highs for the weeks and months ahead. If the 150 is sloping downwards, a cyclical bear market is in play with lower prices for the weeks and months ahead.

This chart was first highlighted when the 150-day MA flattened and turned down in early August ushering in a cyclical bear market. In fact, that small circle may represent the conception of the cyclical bear market in stocks here forward. As long as the 150-day MA continues sideways to sideways lower, sloping lower, the cyclical bear market is locking on course.

As long as the RUT stays under 1150-ish, the 150-day MA will curve downwards. The market bulls desperately need the RUT above 1155 and higher as soon as possible to bring back the party days. Remember, the Dow (INDU) 150-day MA flattened as well but it has since resumed the upperward path. Watch the RUT and INDU 150-day MA's since they tell you if the long awaited cyclical bear market (for the coming weeks and months and year or two) is here, or not. Follow the COMPQ as well since it is starting to flatten. For now the bears are taking control of markets starting with the small caps. If RUT remains under 1150 and lower, the bears will win in the stock market moving forward; the broader indexes would be expected to follow to the downside. As has been the case for the last 5-1/2 years, a central bank can fire a money bazooka at any time creating happy days again. 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.

Tuesday, September 23, 2014

SPX 60-Minute Chart 200 EMA Cross

Here is some new drama to monitor; the important 200 EMA on the 60-minute. Remember last week we watched for the potential breach at the 200 EMA only to see the bulls recover? Here we are again. The 200 EMA on the 60-minute is 1988.86. Price is above signaling bullish markets for the days and hours ahead, however, the SPX is teasing a potential failure only about one point away. The initial market price action did pierce under the 200 EMA. If the SPX loses the 200 EMA, bad things will quickly happen to the stock market.

The 8 MA is below the 34 MA on the SPX 30-minute chart signaling bearish markets for the hours ahead so either the 30-minute chart will prove correct or the 60-minute chart above will prove correct. The charts will agree on the same direction going forward so monitor the situation until the winner is known.

If the SPX remains above the 200 EMA a relief rally will occur, however, if the 200 EMA fails, the stock market can fall down the rabbit hole extremely quickly (a market flush may occur). Watch 1989 as a major bull-bear line in the sand. This information is for educational and entertainment purposes only. Do not invest based on anything you read or view here. Consult your financial advisor before making any investment decision.

Note Added 11:03 AM: SPX 1991.

Note Added 11:07 AM: SPX drops to 1990.44..... 1990.24 ...... the 200 EMA is 1988.87 .... whoa, 'slip-sliding away' as Paul Simon would sing...... the SPX is 1900.03....... bounce ...1990.50. The bears are so close they can taste it. If the bears cannot push the last point lower to unlock market carnage, then the bulls will take the ball and run with it. The fight continues.

Note Added 11:11 AM:  Ho...whoa .... SPX 1988.84 a rupture of the 200 EMA ..... As the Apollo astronauts said decades ago, "Houston, we have a problem."

Note Added 11:13 AM: Price drops under the 200 EMA signaling bearish markets ahead and a potential flush in the stock market imminent. Watch to see if the bears can remain below, or not. The SPX is 1988.48. The 200 EMA is 1988.86. It is bounce or die time. Bulls will be crying in their beer this evening if they cannot create an immediate bounce.

Note Added 11:47 on Wednesday, 9/24/14: So the bears created the 200 EMA failure yesterday into today and a flush occurred but a short time ago the bulls push back above the 200 EMA at 1988.69. The SPX is at 1991.73. The fight continues. Watch the VIX 200-day MA at 13.54 to see if the bears can hold the line, or not. VIX is 13.95. Bears are fine if they keep VIX above 13.54. Bulls will make headway higher if they can push VIX under 13.54. Note that market were weak moving through the new moon as is typically the case each month. This week after OpEx in September is typically down 80% of the time and so far that is playing out. Rosh Hashanah begins tomorrow so volume will likely trail off into the Friday close. Bears need the SPX back under 1989 so they can resume the downside.

Monday, September 22, 2014

VIX Volatility Daily Chart

The 200-day MA is at 13.54 and is a key S/R line in the sand for volatility and a great predictor of market direction. If you are long the stock market, you want the VIX to be under the 200-day MA. If you are short the market, you want the VIX to be above the 200-day MA.

VIX 12.38 is another important line in the sand identified by the Keybot the Quant algorithm. So with the VIX above both 12.38 and 13.54, the bears are on easy street as the stock market sells off. Bulls can stall and even stop the market downside if VIX drops under the 200-day MA at 13.54. Bulls got nothing unless they can push volatility lower. VIX is at 13.92Bears will create more market selling if VIX moves above 14 and higher. Watch VIX 13.54 and VIX 12.38 to gauge market direction. This information is for educational and entertainment purposes only. Do not invest based on anything you read or view here. Consult your financial advisor before making any investment decision.

Note Added 11:03 AM on Tuesday, 9/23/14: The VIX is at 14.20 with a HOD at 14.83 levels not seen since early August.

Note Added 9:20 PM on Thursday, 9/25/14: The VIX closes at 15.64 after printing a HOD at 16.69. The SPX pukes 32 points today, -1.6%, down to 1966.

RUT Russell 2000 Small Caps Daily Chart Death Cross Pattern

The 50-day MA crosses down through the 200-day MA today creating a Death Cross pattern. Seasoned technicians do not pay much attention but the patterns make for exciting news headlines. A death cross ushers in a period of bearish weakness that can last for weeks or months. Typically when the cross occurs price will tend to bounce but in the weekly and monthly time frame, the death cross does usually accurately forecast weakness in the short to intermediate terms. Keep an eye on it over the coming days. As long as price stays under 1150-ish, the death cross will continue to hold. 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 10:48 AM on Tuesday 9/23/14: The 50-day MA further stabs down through the 200-day MA as the RUT price collapses to 1127 not seen since early August.