Thursday, May 28, 2015

Keystone's Midday Market Action 5/28/15

The on-again off-again Greece bailout deal drama continues. Greece announced an imminent deal yesterday creating a big rally in European and US stocks but today German finance minister Schaeuble says he is not aware of any deal and he is involved in the deal making. Greece is playing a dangerous game of chicken.  This morning Greece says a deal will be reached by Sunday but the markets did not eat that news bite with stocks subdued in Thursday trading. Chinese stocks are crushed and the action is explained at Keystone the Scribe's site.

Keystone's algorithm, Keybot the Quant is tracking utilities and retail stocks as the key market directional drivers currently. Bulls win with RTH above 76.40. Bears win with UTIL under 584.32 (its 50-week MA a critical broad market signal). UTIL is at 585.84 so the bulls laugh in the bear's face. However, RTH is 76.14 so the bears are laughing at the bulls. One of these two parameters should flinch to indicate market direction forward. If utilities remain bullish, and retail stocks bearish, then equities will float along sideways with a slight upward bias.


The SPX began May at 2086 with tomorrow the EOM and last day of trading. The price action over the coming eleven hours determines if the month finishes positive, or not. The SPX is currently printing 2116. The SPX is above the 200 EMA on the 60-minute chart at 2109 so the bulls are incontrol for the hours and days ahead. Bears got nothing unless they can send the SPX under 2109. The SPX 20-day MA is 2110.59 and 50-day MA is at 2098.87 two key support levels. The RUT (Russell 2000 small caps index) is at 1250 exactly at its 50-day MA support/resistance so this pivot will likely send the broad indexes in the same direction.

In addition to EOM tomorrow, key economic data is on tap including GDP, Chicago PMI and Consumer Sentiment.

SPX S&P 500 60-Minute Chart 200 EMA Cross

The critical 200 EMA on the SPX 60-minute chart is 2109.30 moving sideways. Market bulls continue drinking Fed wine and are drunk as skunks celebrating without any concern or worry--unless the 200 EMA fails.The 200 EMA is a key short-term signal that currently forecasts bullish markets for the hours and days ahead. Bears need the SPX under 2109.30 or they got nothing. The previous 1-hour chart highlighted the H&S pattern in blue that did give way to the downside and the bears ruptured the 200 EMA but then happy talk over a Greece bailout deal sent stocks higher yesterday. The SPX spiked back above the 200 EMA punching the bears in the face.

Market bulls are fine as long as they keep the SPX above 2109. Market bears win going forward if the 200 EMA at 2109 fails. 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.

DDD 3D Systems Daily Chart Falling Wedge Oversold Positive Divergence

The 3-D stocks have fallen out of favor. A couple years ago, traders were tripping over each other to buy SSYS calling it best in breed. DDD, XONE and VJET are other key players. The production of human tissue and such body parts such as ears have a great future ahead for 3-D bio-printing. The 3-D technology provides a future world where most of your needs can be produced at home instead of going to the store. Valuations got out of  hand and the stocks went into bubble territory popping in 2014. Now you cannot give away a 3-D printer.

The charts indicate that the beatings have gone on long enough and some recovery is in order. For DDD, and the others, SSYS, XONE and VJET, the daily and weekly charts show positive divergence across all indicators so as knife-catch speculative plays, the 3D arena is very attractive. DDD, SSYS, VJET and XONE can all be viewed as attractive speculative long plays. Keystone bot DDD opening a new long position. 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.

Wednesday, May 27, 2015

SPX S&P 500 Daily Chart Rising Bearish Wedge Versus Ascending Bullish Triangle













The battle of the red rising wedge pattern (bearish) versus the green ascending triangle pattern (bullish) continues. Bulls broke out to the upside but upon returning to the 2120 level for a back kiss, price collapsed back inside the triangle. Price remains inside the red wedge and now drops to the lower trend line of the wedge.

Allowing for some leeway and using the horizontal S/R levels below, between 2091 and 2135 is likely sideways noise. Bulls win big above 2135 since price will seek 2180 and 2200. Bears win big below 2091 with the road to the 2020 gap fill likely.

The SPX is under the 200 EMA on the 60-minute chart at 2108.44 so the bears are in control for the hours and days ahead. Bulls need the SPX above 2108.44 so they can place the party hats on their heads. Three days remain in May that started at 2086.

2135 (5/20/15 All-Time Intraday High: 2134.72)
2134.72 Previous Week’s High
2132
2131 (5/21/15 All-Time Closing High: 2130.82)
2129
2126 (4/27/15 Intraday High: 2125.92)
2124
2123
2122
2121 (4/24/15 Intraday High: 2120.92)
2120.01 Previous Week’s Low
2120 (2/25/15 Intraday High: 2119.59)
2118 (4/24/15 Closing High: 2117.69)
2117 (3/2/15 Closing High: 2117.39)
2115
2114
2113
2111
2110
2109.72 (20-day MA)
2108.44 (200 EMA on 60-Minute Chart a Keystone Market Turn Signal)
2108
2107
2104
2103
2100
2099
2097.20 (50-day MA)
2097
2094 (12/29/14 Intraday High: 2093.55)
2091 (12/29/14 Closing High: 2090.57)
2089
2088
2087
2085.51 May Begins Here
2082
2081

TRAN Dow Transports Daily Chart Death Cross

A Death Cross pattern occurs for the Dow Transports with the 50-day MA stabbing down through the 200-day MA. Seasoned technicians do not place a lot of weight on the death and golden (50 piercing up through the 200) crosses but they make for great news headlines. Comically, when a death cross occurs, price usually recovers spiking higher so a move higher in the trannies would be anticipated. The death cross does carry clout, however, since if it remains in play then 2 to 4 months out TRAN would be expected to be lower in price. So after a potential short term bounce weakness should reappear if the death cross pattern holds.

TRAN is at levels not seen since last October seven months ago. Price fails from the red descending triangle which forecasts far lower prices in the future. Perhaps a short term bounce will send price up for a back kiss of the triangle base line at 8600 but weakness would be expected to resume. The trannies have not made new highs to match the Dow industrials over the last few months so the Dow Theory non-confirmation of the stock market rally remains. 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 proprietary trading algorithm, Keybot the Quant, flips to the short side after yesterday's opening bell at SPX 2121. Weakness in retail stocks, copper, commodities and utilities create the downside pressure in stocks. Watch UTIL 584.32. UTIL begins Wednesday at 584.39 helping the bulls. Markets will sell off if UTIL 584.32 fails. More information is found at Keybot's site;

Keybot the Quant

Tuesday, May 26, 2015

SPX S&P 500 Daily Chart Rising Wedge Versus Ascending Triangle Negative Divergence Upper Band Violation Strong Trend Higher is Lost

The battle of the red bearish rising wedge versus the green bullish ascending triangle continues. Bulls threw confetti in the air and started drinking Fed booze like madmen six days ago with the breakout from 2120. Analysts guarantee SPX 2200 is next and are drunk as skunks celebrating all weekend long. However, price instead stalls at the top rail of the rising wedge as Keystone previously highlighted. The bulls do not win until they nullify the rising wedge pattern with a breakout above 2130-2135 and higher which will then set the path higher to 2180-2200. The bears need to spank price lower from the upper red trend line and send it down through the bottom rail of the wedge at 2110-ish which will begin accelerating equities to the downside.

Price tagged the upper standard deviation band so a move to the middle band, the 20-day MA, at 2110-ish is on the table and also a move to the lower band at 2079. The 2108-2110 level continues to identify itself as a key support gauntlet. The ADX line is down to 10 which is very interesting. There is no longer a strong trend occurring in the SPX's move higher despite the record all-time highs. The strong trend higher for the SPX ended in February (ADX under 23-25). The red lines show negative divergence across all indicators. The MACD line is trying to roll over but today needs to play out to see if it does or if it can eke out a couple more days of elevated stocks prices before giving up the ghost. The stochastics are overbot.

Bears need the RSI under 50 to prove they have the beans to take stocks lower. The expectation is for the SPX to leak lower for a potential major test of 2108-2110 where a critical bounce or die decision will be made. May began at 2086 with only four days remaining in the month; EOM is Friday. 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 S&P 500 1-Hour Chart

The critical 200 EMA on the SPX 60-minute chart is 2108.72 and rising. Market bulls remain in party mode and bears got nothing unless 2109 fails. The 200 EMA is a key short-term signal that forecasts bullish markets for the hours and days ahead. Price has been moving into a sideways triangle with a breakdown occurring on Friday. The RSI, MACD line and stochastics are weak and bleak so a lower low in price would be anticipated.

The blue lines show a closer look at an H&S pattern that targets the 2111-2113 zone and the 2108-2110 level is an important and strong support level. Thus, market bulls are fine as long as they keep the SPX above 2108-2110. Market bears win going forward if the 2108-2110, and the 200 EMA at 2109, fails. 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 S&P 500 2-Hour Chart

Here is another update of the 2-hour chart since that has been a focus of interest the last few trading days. The red lines show the matching and higher highs in price coming with negative divergence in the indicators so a couple of spankdowns are created off the tops (red arrows). The indicators remain weak and bleak printing lower lows so at least one to four candlesticks may be needed before a turnaround can be launched by the bulls which is from 2 to 8  hours of trading time. Of course the central bankers can make a dovish statement and bounce stocks at anytime they desire as is the case the last few years.

The MACD cross is bearish. The stochastics are under 50% in bear territory. Watch to see if the RSI drops under 50% which will signal further price weakness ahead. Price needs to revert back from its elevated status above the moving averages. The blue lines show a funky H&S pattern with a skinny middle head occurring within one 2-hour candlestick. To keep the math easy, the head is 2135, neckline at 2125, so target is 2115. A neck at 2123 targets 2111. Reference the SPX S/R missive previously posted where the 2108-2110 level is very strong support and would lead to trouble if it fails. A test of this landing zone is likely if price slips under 2123-2125. Lower prices are anticipated for a few hours forward unless Fed Chair Yellen or other central bankers flap their dovish wings handing out easy money to pump stocks higher. S&P futures were down -9 a couple hours ago but have recovered to down -4 with the opening bell about 90 minutes away. This information is for educational and entertainment purposes only. Do not invest based on anything you read or view here. Consult your financial advisor before making any investment decision.

SPX Support, Resistance (S/R), Moving Averages and Other Important Levels for Trading the Week of 5/26/15.

SPX (S&P 500) support, resistance (S/R), moving averages and other important levels are provided for trading the week of 5/26/15. 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 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 Tuesday after the Memorial Day holiday with the SPX starting at 2126, the bears only need a smidge of weakness to create downside acceleration and the S&P futures are down -6 three hours before the opening bell. Bulls need to retrace Friday’s down move to regain their mojo above 2132. A move through 2127-2131 is sideways action to begin the week. The SPX began the year at 2059 so stocks are positive on the year up +3.3%.

The last day of trading for May, EOM, is this Friday, 5/29/15, only four trading days away so the 2086 level is important since it determines an up month, or not. The SPX is elevated above its moving averages so a mean reversion lower is definitely on the table like prior market tops over the last few months. Direct critical support levels below are 2131, 2126, 2123, 2121, 2118, 2110, 2108 and 2091. The support gauntlet at 2108-2110 is key since the 20-day MA at 2109.95 and the 200 EMA on the 60-minute chart at 2108.72 is within this range. Bad things will happen to stocks if 2108-2110 fails.

Looking at the big picture the strongest S/R is 2135, 2131, 2126, 2123, 2121, 2118, 2110, 2108, 2091, 2081, 2076, 2067, 2061, 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 for the last six months with price attempting to break out above at 2120-2130 for the last seven trading days.

Bulls win big above the 2126-2135 level. Bears win big under the 2108-2110 level. The battle continues between 2111-2125. Pay attention to May’s starting number at 2086. If the 50-day MA at 2096.18 fails then the month of May will surely end negative.

2135 (5/20/15 All-Time Intraday High: 2134.72)
2134.72 Previous Week’s High
2132.15 Friday HOD
2132
2131 (5/21/15 All-Time Closing High: 2130.82)
2129
2126.06 Friday Close – Tuesday Starts Here
2126.06 Friday LOD
2126 (4/27/15 Intraday High: 2125.92)
2124
2123
2122
2121 (4/24/15 Intraday High: 2120.92)
2120.01 Previous Week’s Low
2120 (2/25/15 Intraday High: 2119.59)
2118 (4/24/15 Closing High: 2117.69)
2117 (3/2/15 Closing High: 2117.39)
2115
2114
2113
2111
2110
2109.95 (20-day MA)
2108.72 (200 EMA on 60-Minute Chart a Keystone Market Turn Signal)
2108
2107
2104
2103
2100
2099
2097
2096.18 (50-day MA)
2094 (12/29/14 Intraday High: 2093.55)
2091 (12/29/14 Closing High: 2090.57)
2089
2088
2087
2085.51 May Begins Here
2082
2081
2080.66 (20-week MA)
2079 (12/5/14 Intraday High: 2079.47)
2077.99 (100-day MA)
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
2071 (11/21/14 Intraday High: 2071.46)
2069
2067
2065
2063
2061.45 (150-day MA; the Slope is a Keystone Cyclical Signal)
2061
2058.90 Trading for 2015 Begins Here
2057
2056 (11/18/14 Intraday High: 2056.08)
2054
2052
2050
2049.91 (10-month MA; a major market warning signal)
2046 (11/13/14 Intraday High: 2046.18)
2041
2040
2038.02 (200-day MA)
2038
2034
2032.50 (12-month MA; a Keystone Cyclical Signal) (the cliff)
2032
2030
2028.29 (50-week MA)
2024
2023
2021
2019 (9/19/14 Intraday High: 2019.26)
2018
2016
2014
2012
2011 (9/18/14 Closing High: 2011.36) (9/4/14 Intraday High: 2011.17)
2009
2007 (9/5/14 Closing High: 2007.71)
2005 (8/26/14 Intraday High: 2005.04)
2004
2003 (8/29/14 Closing High: 2003.37)
2002
2001
1999