Tuesday, January 27, 2015

SPX 60-Minute Chart 200 EMA Cross Sideways Channels

The fight for the 200 EMA on the SPX 60-minute chart at 2038.37 continues. The SPX is at 2030 under the critical bull-bear deciding line signaling bearish markets for the hours and days ahead. Bulls need SPX above 2038.37 or they got nothing. The critical 20-day MA is also at 2038.69.

Price is moving through the 2002-2061 sideways channel for this year. Looking at the big picture the strongest S/R is 2094, 2091, 2088, 2082, 2079, 2075-2076, 2067, 2061, 2046, 2040, 2038, 2032, 2018-2019, 2011, 2002-2003, 1998, 1988, 1985-1986 and 1982. Narrowing down to the tighter ranges, price is at 2030 between the 2032 overhead resistance and 2018-2019 support. Bulls win above 2032 since price will run to 2038 to retest the critical 200 EMA decider line. Bears win under 2018-2019 since price will next drop to 2011 for support.

The MACD line and stochastics are weak and bleak so a recovery move may occur for a candlestick or two (one or two hours) but weakness would be expected to reemerge until positive divergence can develop for all indicators. The 2018-2019 support may serve as a magnet for price to decide if it wants to base there, or fail there. The SPX dropped to a LOD at 2019.91 after the opening bell and bounced. 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 12:39 PM: The SPX is 2034 overtaking the 2032 S/R. If price stays above 2032, it will set its sights on the 2038 horizontal resistance which is also at the 20-day MA at 2038.69 and the 200 EMA on the 60-minute at 2038.37. This 2038-2039 resistance gauntlet carries serious street cred. Bulls win big above 2039. Bears remain in great shape if the SPX remains under 2038.

Note Added 1:28 PM: Whoa. Ho, ho, ho. The jump to test 2038-2039 occurs quickly. Here it is; for all the marbles. The 200 EMA on the 60-minute is 2038.30. The SPX is at 2038.15. It is time to bounce or die and the decision controls the markets for the hours ahead. Keybot the Quant algo is tracking NYA 10812 and SOX 673.82 as the two key market directional parameters. So bulls win with the SPX above 2038, NYA above 10812 and SOX above 673.82. Bears win with SPX under 2038, NYA under 10812 and SOX under 673.82. The table is set. Who will emerge victorious?

Note Added 1:31 PM:  SPX 2039.11. NYA 10811.18. SOX 673.48. A decision is needed; the parameters are at inflection points. What say you markets? Bounce or die?

Note Added 1:36 PM: The bears repel the first attack. SPX 2037.73. NYA 10806. SOX 672.84. The bulls will probably mount another run at the critical 2038-2039 level. The stakes are high.

Note Added 1:42 PM: The 200 EMA is 2038.30. The SPX is 2038.30. Do you have a coin to flip?

SPX Daily Chart Moving Average Ribbon

The SPX daily chart shows the interplay of price versus moving average levels. Three days ago the bears were punched in the face with price catapulting up through the 20 and 50-day MA's after ECB President Draghi fired the QE money bazooka. The central bankers are the market. Markets have typically rallied after the big central bank announcements but then sell off just like the current pattern. The chart maintains a sideways nature shown especially by the RSI. The FOMC announcement is tomorrow afternoon creating continued market drama. 

The chart is not tipping its hand and is open to coming back up to test 2057-2067 again. The bracket formed by the 20-day MA ceiling at 2039 and 100-day MA floor at 2010 serves as a sideways range. Ditto the sideways triangle trend lines at 2048 for a break out and 2000 for a break down. The 50-day MA is 2047. The 150-day MA is 1996 and the 200-day MA is 1992. The 150-day MA continues to slope upwards which is bullish on the intermediate and long term basis; watch this closely since if the 150-day MA line flattens and rolls over sloping downwards that guarantees a cyclical bear market going forward. Note how the 150-day MA slope failed in December but the Federal Reserve pumped the markets with Chair Yellen's dovish talk to save the day. Two weeks ago the 150-day MA was threatening to roll over again.

Markets stagger sideways like drunk in Times Square on Saturday night. Bulls win above 2039. Bears win under 2010. Price is at 2030 and rising. 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 Bearish

Keystone's trading algorithm, Keybot the Quant, is back on the short side. The choppy and erratic sideways market behavior continues. The algo identifies the following parameters and levels as key bull-bear lines in the sand; NYA 10812, VIX 16.02 (remember; the VIX moves inversely to the stock market), SOX 673.90 and XLF 24.05. The stock market will not recover unless at least one of these return to the bull camp. More information is found at Keybot site;

Keybot the Quant

Note Added 12:36 PM: SPX recovers to 2034. NYA 10784. VIX 17.42. SOX 670.18. XLF 23.67. The NYA is teasing towards 10812 and the SOX towards 673.90 but for now all four parameters remain bearish.

Sunday, January 25, 2015

SPX Support, Resistance (S/R), Moving Averages and Other Important Levels for Trading the Markets the Week of 1/26/15

SPX (S&P 500) support, resistance (S/R), moving averages and other important levels are provided for trading the week of 1/26/15. 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 2093.55 on 12/29/14 and the SPX all-time closing high is 2090.57 on 12/29/14. The high for this year is 2072.36 and the low for this year is 1988.12.

For Monday with the SPX starting at 2052, the bears only need one negative point in the S&P futures, to push the SPX under 2050.50 after the opening bell, and the downside will accelerate. The bulls need to touch the 2063 handle and bingo, the upside will accelerate to immediately test the 2067 R. A move through 2051-2062 is sideways action to begin the week.

The CPC put/call ratio spiked to 1.28 indicating fear and panic and a near-term bottom at hand but the behavior is out of sync as to what would be expected. There was a large push for put buying on Friday and much of that may be due to the Greece elections where results are coming in as this is typed. Nonetheless, the CPC indicates enough fear to create a near-term bottom. If markets sell off, the fear should grow and the CPC should move higher and that would provide more confidence in identifying a near-term bottom with an even higher CPC. Monday and Tuesday may be interesting days if the CPC decides to continue spiking higher (stocks would plummet).

January ends on Friday, EOM, and as the ole Wall street adage says, "as January goes so goes the year " so there may be some price jockeying for position at the starting year and starting month number at 2059 as the week plays out. The 2059 will determine if January is an up month or down month. Price came up on Friday through the strong 2061 resistance but never made It to the 2067 R so a test of that level may be on the come.

The 2057-2067 resistance gauntlet is important. Bulls win big above 2067. Bears remain in the game if they can hold 2067. Price thrusts up through the 20-day MA and 50-day MA’s at 2046-ish last week creating bull juice. The 2043-2047 support is important and price will want to back kiss these important moving averages; the 20-day MA at 2043 and 50-day MA at 2047. The 2038-2040 is another strong gauntlet of support underneath. If the 20-day MA fails, price will be at 2038-2040 lickity-split. The 1988 is the low this year thus far and note the importance of the 10-month MA at 1987. When markets venture lower and lose the 10-month MA, serious trouble will begin.

Looking at the big picture the strongest S/R is 2094, 2091, 2088, 2082, 2079, 2075-2076, 2067, 2061, 2046, 2040, 2038, 2032, 2018-2019, 2011, 2002-2003, 1998, 1988, 1985-1986 and 1982.

2094 (12/29/14 All-Time Intraday High: 2093.55)
2091 (12/29/14 All-Time Closing High: 2090.57)
2079 (12/5/14 Intraday High: 2079.47)
2076 (11/28/14 Intraday High: 2075.76)
2075 (12/5/14 Closing High: 2075.37)
2073 (11/26/14 Closing High: 2072.83)
2072 (1/2/15 Intraday High for 2015: 2072.36)
2071 (11/21/14 Intraday High: 2071.46)
2064.62 Previous Week’s High
2062.98 Friday HOD
2063 (1/22/15 Closing High for 2015: 2063.15)
2058.90 January Begins Here
2058.90 Trading for 2015 Begins Here
2056 (11/18/14 Intraday High: 2056.08)
2051.82 Friday Close – Monday Starts Here
2050.54 Friday LOD
2046.89 (50-day MA)
2046 (11/13/14 Intraday High: 2046.18)
2042.95 (20-day MA)
2037.63 (200 EMA on 60-Minute Chart a Keystone Market Turn Signal)
2019 (9/19/14 Intraday High: 2019.26)
2016.82 (20-week MA)
2011 (9/18/14 Closing High: 2011.36) (9/4/14 Intraday High: 2011.17)
2009.14 (100-day MA)
2007 (9/5/14 Closing High: 2007.71)
2005 (8/26/14 Intraday High: 2005.04)
2004.49 Previous Week’s Low
2003 (8/29/14 Closing High: 2003.37)
1994.85 (150-day MA; the Slope is a Keystone Cyclical Signal)
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) (1/16/15 Intraday Low for 2015: 1988.12)
1987.04 (10-month MA; a major market warning signal)
1986 (7/3/14 Intraday Top: 1985.59)
1985 (7/3/14 Closing High: 1985.44)
1970.05 (200-day MA)
1968 (6/24/14 Intraday Top: 1968.17)
1966.85 (12-month MA; a Keystone Cyclical Signal) (the cliff)
1963 (6/20/14 Closing High: 1962.87)
1956 (6/9/14 Intraday Top: 1955.55)
1954.30 (50-week MA)
1951 (6/9/14 Closing High: 1951.27)

Saturday, January 24, 2015

NYA NYSE Composite Weekly Chart 40-Week MA Cross Cyclical Bear Market

The bears were crying in their beerski's last Thursday evening as the bulls regained the 40-week MA but in Friday trading the bears slapped the bulls in the face pushing the NYA back under the 40-week MA signaling a cyclical bear market ahead for weeks and months perhaps longer. Of course this battle will continue. The bulls were able to recover from the October failure, and also recover from the December failure.

Type "central banker collusion" into the search box at the right margin and bring up two prior articles that describe in detail how the Fed, BOJ, ECB and other central bankers collude and coordinate to pump the stock market higher saving the day in October and December.

The importance of this chart cannot be overstated. If the NYA remains under the 40-week MA, stocks are going to finish lower this year and the universal consensus on Wall Street for SPX 2150-2350 will be incorrect. If you remain bullish the market, you need the NYA above the 40-week MA, otherwise you will lose money week after week moving forward.

The fight continues on Monday. The stock market is in a cyclical bear market going forward unless the bulls can regain the 40-week MA. 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 Tuesday, 1/27/15, at 11:30 AM: The NYA recovers on Monday above the 40-week MA so the bulls celebrate all night long. However, this morning, stocks collapse and the NYA drops under the 40-week MA signaling a cyclical bear market pattern for the weeks and months ahead.

Friday, January 23, 2015

SPX 2-Hour Chart Negative Divergence Developing

The bulls keep pushing price higher and the MACD line remains long and strong. The RSI is not yet overbot (it may or may not become overbot).  Those are two bullish items but the other indicators (red lines) are negatively diverged wanting to see price roll over. The matching top over the last four candlesticks is cheesy. Price barely prints a matching high. Considering the MACD line, price likely wants to test the strong 2067 resistance since it came up this far. When that occurs, the MACD line will like turn neggie d and that will create the short-term top.

The MACD line will need one to three candlesticks to turn neggie d so that is 2 to 6 hours of trading time so price may not peak out until Monday. If the RSI reverses to the upside and prints a higher high then the SPX will run to the 2075-2076 strong resistance. The thought now is that price should remain in this 2054-2067 range and top out between now and early next week.

The strong S/R shown by the brown lines is 2075-2076, 2067, 2061, 2046, 2040 and 2038. Watch the MACD line to see when it rolls over. 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 3:02 PM: Stocks are sliding late-day. SPX is down to 2055 and dropping. MACD line is flat.

USD US Dollar Index Monthly Chart 11-Year High Fibonacci Retracements Inverted H&S

The dollar is running parabolic from 80 to 95 in only seven months a gain of +19% huge for a currency. The dollar is rising a ridiculous +2% and more per month for over a half year. The US dollar chart is the inverse of the XEU euro chart. For the big move in the dollar and euro during 2001 to 2008, the euro is at its 62% Fib retracement but the dollar is only nearing its 50% Fib at 96.06.

The dollar is at highs not seen since 2003. The RSI is overbot, ditto stochastics. The indicators are long and strong wanting higher highs in the monthly time frame after a pull back occurs. Negative divergence should develop in the months ahead creating a top. The 96 and 102 Fib's are in play. The brown inverted H&S targets 113 but that can occur a year or two down the road. The breakout at 90-92 is important so price would be expected to come back to show it respect (200-week MA is 89.81). The dollar may simply stagger sideways through 90-102 for 2015 into 2016 and frustrate those looking for a continued vertical spike higher.

The indicators are wanting higher highs in the dollar in H1 2015 but the dollar should peak perhaps in the February-July time frame. The 113 and 120 levels are probably not on the radar until 2016-2018 but if the euro plummets from here through 1.08 towards parity, the dollar index will be spiking up through 102 towards 108, however, this is not currently expected. The expectation is for the rise in the dollar to slow and the drop in the euro to slow but both will remain around current levels for a few weeks and months. 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.

XEU Euro Daily Chart 11-Year Low

The euro daily chart is bludgeoned lower with ECB President Draghi's baseball bat. Draghi is running the printing presses non-stop flooding the world with euro's. Grab some and buy stocks. Everyone else is. The euro falls like a stone after the ECB QE announcement from above 1.1600 to 1.1166 an over -4% drop.

The stochastics are oversold and positively diverged so they will work to create a bounce. The other indicators are weak and bleak but much of the beating is already priced-in since the indicators are buried in the cellar. The RSI is down to 15, MACD -2 and lower, and ROC -5.4. Once you get so low there is no where to go but up. So a bounce woudl be expected but the indicators will want a lower low until they can set up with possie d.

The red dots show price extended to the downside so a mean reversion will be required (bounce). Price would be expected to stabilize sideways but a few more days will be needed first with the euro likely printing under today's 1.1166 for a lower low next week. The indicators will set up with positive divergence in the coming days and that will identify the firm near-term bottom for the euro. 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.

XEU Euro Weekly Chart 11-Year Low Price Extended

The weekly chart shows the complete collapse of the euro over the last few months and this week. As Keystone always says, the collapses out of rising wedges can be quite dramatic. This qualifies as a dramatic collapse from the red rising wedge. The indicators are oversold and the RSI, histogram and stochastics are positively diverged wanting to see a dead-cat bounce in this weekly time frame. The MACD line and ROC are weak and bleak so they want another lower low in the euro after any bounce occurs in this weekly time frame.

The red dots show price now extended to the downside under the 20 MA under the 50 MA under the 200 MA so a mean reversion will be needed (bounce). The pink box shows the ADX exploding higher above 51 verifying that the downward drop in the euro is a strong trend in the weekly time frame so this verifies lower lows ahead after any bounces. The ADX on the monthly chart does not show a strong trend in place on a longer term monthly basis as yet but clearly in this shorter several week basis the trend is strong and lower.

Those looking for the euro to plummet towards parity in quick order may be premature according to the indicators. The RSI and stochastics want to see a recovery bounce right now. The euro would be expected to stabilize after some choppy action occurs for a few weeks with a downward bias. At this time the euro is not expected to move below the 1.08-1.12 support zone. It may spend much of the year playing around in this range and parity may not come at all during 2015. However, a falling knife may keep falling--the next several days will be important. 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.

XEU Euro Monthly Chart 11-Year Low Fibonacci Retracements Sideways Symmetrical Triangle Downward-Sloping Channel

The euro drops to the 62% Fib retracement of the rally from 2001 to to 2008 from 0.84, under parity (1.00) to 1.58. The 62% Fib is 1.1213 and the euro is at 1.1261 printing a LOD at 1.1166. If price ventures lower under the 62% Fib a full 100% retracement down to 0.83-0.85 is on the table. Rick Santelli mentioned the Fib retracement on CNBC business television so reference that video if you want to study the Fibonacci retracements more closely.

Sometimes a 76% Fib retracement will occur and that is at the 1.02 level. The big question is if the euro moves to parity at 1.00 (dark blue square). The breakdown out of the red sideways symmetrical triangle is projecting a move to 90. The downward-sloping channel shows the euro approaching the lower support rail and this support continues in conjunction with the 1.08 horizontal support. The stochastics are oversold and will create the initial dead-cat bounce in the monthly time frame. The indicators such as RSI are weak and bleak wanting lower lows after any bounces, but the RSI is oversold as well so a basing would actually be expected say during H1 2015.

The 1.08-1.12 level is sturdy support. It would not be surprising to see price move through 1.08-1.15 into summer time. In other words, the expectation for a continuing collapse in the euro may be premature. Nonetheless, when a price is dropping like that it is hard to know where the bottom is.

The pink boxes show the strong trends over the years like the downtrends in the euro in 1998 and 2000-2001. The uptrend was strong in 2003-2005 and also again as the peak was placed in 2008. After that peak, however, the ADX falls like a stone and there is no strong trend in place for the last six years and this is proven out by the sideways move through 1.20-1.50. That may change since the euro fell out of bed when Draghi fired the QE money bazooka yesterday. The euro is plummeting but the ADX is only at 19. The downtrend in the euro is not strong in this long-term monthly basis until the ADX moves up into the pink box. If the ADX remains at 20-ish and flat or lower, then the euro will likely flatten out and not drop as much as everyone thinks.

The stochastics should create a near-term bottom now into February for a bounce but then weakness should continue on the monthly basis. The 1.08-1.12 range has a good chance of holding into summer time. The next few days are important to see if the knife keeps falling, or not. 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.