Friday, March 6, 2015

UTIL Utilities Weekly Chart Stock Market Teetering On Edge

The market bulls are dodging a bullet as the trading day is underway. The UTIL 50-week MA represents a trap-door in the stock market. If UTIL loses the 573.19 level, stocks will likely go into free fall in quick order. The bulls know this and are fighting desperately to keep UTIL above the 50-week MA. Watch it like a hawk since carnage begins in equities if UTIL loses 573.

The VIX spikes higher to 14.68 but not yet above the 200-day MA at 14.72 (see previous chart). This is why equities recovered from the selling in the opening minutes of trading. If the VIX moves above 14.72, stocks will deteriorate and UTIL may drop under 573 which ushers in major market carnage. If the VIX stays below 14.72, the bulls are fine and should be able to recover today and prevent stocks from moving any lower. 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 9:51 AM: SPX 2091. UTIL 575.56. VIX 14.52 so the bulls are holding the line. Volatility is starting to move up again; watch it closely.

Note Added 10:16 AM: SPX 2092. UTIL 573.12. The 50-week MA is 573.13. Failure by one penny. As the astronauts said decades ago, "Houston, we have a problem." VIX is at 14.43 not yet above the 14.72. Markets are on the verge of creating a dramatic 'event' and no one knows it yet. Bulls must push UTIL higher or the stock market will begin selling off in force.

Note Added 10:19 AM: SPX 2092. UTIL 573.13. The 50-week MA is 573.13. The drama builds. By price hesitating at the key UTIL 50-week MA it verifies how critical this level is. Utilities determine the immediate fate of the stock market. Bounce and bulls win, failure and market carnage begins. Since the VIX is not above its 200-day MA the bulls have the advantage to create a bounce. VIX 14.23.

Keystone's Morning Wake-Up 3/6/15; Monthly Jobs Report

The consensus estimate for the Monthly Jobs Report is 235K jobs with a range of 200K to 252K jobs and the unemployment rate is expected to dip one tick from 5.7% last month to 5.6%. Last month’s job number was a robust 257K jobs. Average hourly earnings (wage data) is equally or more important than the actual headline jobs and rate numbers.

The success or failure of the Fed’s six-year Keynesian stimulus program depends on whether inflation increases and inflation will not move higher unless there is wage growth. Considering the large number of layoffs this year, many employees will not be raising wages for the remaining workers. On the other hand, the wage increases in the retail sector at WMT, TGT, Marshall’s may help to boost the wage numbers. Average hourly earnings are expected to rise +0.2% below last month’s robust blowout +0.5% increase but a +0.2% or higher number will signal that the first Fed rate hike is likely in the June-July timeframe rather than later in the year. The average workweek is expected to remain flat at 34.6 hours. The jobs data may be slightly delayed due to the winter weatherAnalysts and traders are anticipating soft jobs numbers due to the severe winter weather in the States.

Shortly before the Monthly Jobs Report, the US futures are S&P +2. Dow +14. Nasdaq +8. Euro 1.0971. Euro/yen 131.56. Dollar/yen 119.92. Pound 1.5190. WTIC oil 50.98. Brent 60.95. Natural gas dips -1% lower to 2.81 (warmer weather is ahead for the States). Gold 1196. Silver 16.05. Copper 2.6435.

Treasury yields are; 2-year 0.63%, 5-year 1.56%, 10-year 2.11%, 30-year 2.72%.

Note Added 9:21 AM: Here are the results of the jobs circus;

At 8:30 AM, the BLS website displays a message, “Temporarily Unavailable.” Seconds later the numbers hit. The Monthly Jobs Report is a robust 295K jobs with an unemployment rate of 5.5%. Last month’s 257K jobs are revised 18K lower to 239K. The strong jobs number is surprising considering all the recent layoffs in energy, retail, industrials and financial sectors. Average hourly earnings are up a paltry +0.1% missing the +0.2% estimate and well under last month’s +0.5%. Wages are not moving higher. The Federal Reserve will be disappointed with the lack of wage growth since their grand Keynesian money-printing experiment is not working to increase inflation.

The disconnect between GDP and jobs is astounding. The jobs numbers keep moving higher each month with over 200K jobs per month for several months but GDP is lackluster. It does not make sense that jobs are increasing but GDP is flat and may leak lower. One of them is wrong. Perhaps GDP numbers will be revised higher in the future, or, a dramatic drop off in employment may begin starting next month.

The private sector (government jobs) adds 288K jobs. The labor participation rate is 62.8% maintaining a steady keel at 62.7%-62.9% for several months at multi-decade lows. Millions of Americans remain unemployed and underemployed. Average hours worked are 34.6 hours as expected remaining steady for five consecutive months.

US futures are all over the map, higher then lower then higher then lower. Treasuries are feeling the most impact on the knee-jerk reaction. European stocks on the continent remain higher with the FTSE lower. At 8:35 AM, the 10-year yield spikes to 2.17%. The euro drops under 1.09 to 1.0881. The dollar/yen moves higher to 120.62. Pound 1.5122. S&P +1. Dow +10. Nasdaq +6.

At 8:39 AM, S&P -3. Dow -22. Nasdaq -1. WTIC oil 50.57. Brent 60.89. Natty 2.806. Gold drops to 1185. Silver 15.905. Copper 2.62.

Treasury yields are; 2-year 0.695%, 5-year 1.64%, 10-year 2.168%.

At 8:43 AM, S&P -2. Dow -13. Nasdaq +1. Euro 1.0899. Euro/yen 1311.46. Dollar/yen 120.64. Pound 1.5145 WTIC oil 50.67. Brent oil 60.95. Natty gas 2.81. Gold 1184. Silver 15.87. Copper 2.6285.

Treasuries are selling off in force taking out support levels (lower prices higher yields). The yields are; 2-year 0.69%, 5-year 1.65%, 10-year 2.18%, 30-year 2.77%.

At 9:06 AM, S&P -10. Dow -96. Nasdaq -6. Euro 1.0895. Euro/yen 131.56. Dollar/yen 120.76. Pound 1.5122. WTIC oil 50.13. Brent oil 60.62. Natty 2.80. Gold 1181. Silver 15.85. Copper is down -1.2% to 2.62.

Treasury yields are; 2-year 0.70%, 5-year 1.66%, 10-year 2.19%, 30-year 2.78%. The 10-year yield prints above 2.20%.

In the middle of the jobs circus excitement, the Dow Industrials announces plans to add Apple to the Dow replacing AT&T. AAPL pops +1.4% almost recovering yesterday’s losses but not quite. T drops -1.4%. Comically, the Dow has a perfect record of consistently removing a stock that is about to break out with performance while adding a stock that fizzles. AA was left for dead so the Dow booted it from the index a couple years ago and days afterwards Alcoa launched higher and never looked back. The path for Apple and AT&T ahead will be fun to watch. AAPL conducts a product release for the Apple Watch on Monday.

XEU Euro Weekly Chart Oversold Falling Wedge Positive Divergence

Everyone and his bro are short the euro. Even the taxi cab driver and shoeshine boy. And why not? Europe has now prostituted themselves just like the United States goosing stock markets with easy money by depreciating the value of their currencies. The global race to debase, the race to the bottom, continues. The action is basically a trade war reminiscent of the 1930's during the Great Depression.

You know what happens when the boat is fully loaded to the downside; markets move in the opposite direction since a large consensus of traders are caught off guard. The euro has collapsed and continues collapsing today under 1.10 to a LOD at 1.0951. So that last red candlestick will extend further downwards. The green lines show firm positive divergence across the board except the MACD line that is weak and bleak. The euro will likely recover strongly in the coming days and considering the shorts in play, the move higher may be like a rocket. However, after the bounce occurs for a week or two, the euro will want to come back down again to satisfy the weak and bleak MACD line. At that time, the MACD will go possie d and a more firm bottom will be in for the euro.

The euro monthly chart shows weak and bleak indicators remaining so the bottom in the euro is not likely for a month or few but the price action should be more sideways than down. Those looking for parity (1.00) will likely be disappointed. The 1.06-1.08 area may be a more logical downside target that prints the bottom in May-June.

Thus, if you made a lot of dough on the downside take the money and run, actually flip it to the long side for the euro since a spike higher is likely on the doorstep. Do not get greedy on the recovery move since that spike will not last long and the euro will come back down as discussed above. If you are a longer term player on the short side, you can be patient for lower lows in euro but you will be biting your lip as you watch the euro elevate over the next week or so.

Of course, the dollar and euro move inverse to each other since the currency baskets are weighted about 50% with each other's currency. Thus, the same analysis holds for the US dollar index--only in reverse since the euro and dollar move inversely. The US dollar is overbot with a rising wedge and negative divergence so it will receive a spankdown. The US dollar weekly chart also displays the MACD line a hair higher from the last high confirming the same inverse technical analysis as described for the euro above. The euro spike may have some juice once many of the shorts panic and the possie d kicks in. 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 9:29 AM: The euro prints a new LOD at 1.0871 after the US Monthly Jobs Report.

Wednesday, March 4, 2015

VIX Volatility Daily Chart

The VIX 200-day MA is an important signal line for markets. Market bears win above and bulls win below. The VIX pops above the 200-day MA at 14.71 placing a feather in the bear's cap (volatility moves inversely to the stock market).

Keybot the Quant algorithm is short and identifies VIX 15.81 as a key bull-bear level that will increase market negativity, thus, at 15.13, the bears have more work to do and the bulls can stage a comeback. If VIX moves above 15.81, equities will sell off in force. Bulls will be fine if they can push the VIX under 14.71. 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 11:38 AM:  The market bulls recover pushing VIX under the critical 200-day MA at 14.69-14.71. VIX is currently printing 14.28 at the lows of the day pushing stocks higher. Interestingly, copper and utilities remain weak and the SPX daily chart shows weak and bleak indicators, and a negative MACD cross, pointing to more downside. However, as always, the cental bankers are the market and it is funny how every time markets begin selling off a central banker meeting is at hand. ECB President Draghi is on deck tomorrow morning and is preparing a cape to wear as he enters the meeting. A large 'SM' is painted on his chest so superhero 'Super Mario' will try and save the day. Equities may trade choppy into the Beige Book this afternoon. Use the VIX 14.70-ish as your guide today. Bears got nothing until they push the VIX back above 14.70. Note that the SPX and Dow came down to test the 20-day MA's and bounced on the initial test of this support. Watch the SPX 20-day MA at 2090.68. LOD is 2087.62 teasing failure at the 20-day support but price recovers. The downside will accelerate if the 20-day fails.

Note Added 1:12 PM: VIX 14.34. SPX 2098.47.

Note Added 2:30 PM: VIX 14.63. SPX 2095.56. Weakness occurs in markets going into the Beige Book data. The VIX 200-day MA is 14.70 so the bears are trying to make a run again but bears got nothing unless VIX moves above 14.70.

Note Added 9:31 AM on Friday morning, 3/6/15: The Monthly Jobs Report sends stocks lower. The party continues with the chart above. The VIX jumps ot 14.64. The 200-day MA is 14.72. If the VIX moives above 14.72 and stays above, the market bears will win today. If the VIX is unable to move above 14.72 then the stock market will recover today. Use this as your Friday guide to market direction.

Tuesday, March 3, 2015

Keybot the Quant Turns Bearish

Keystone's proprietary trading algorithm, Keybot the Quant, flips to the bear side at SPX 2104 at 11:33 AM EST. JJC is under 32.01 causing the market weakness. The bulls must push JJC back above 32.01 to stop the negativity. If JJC stays under 32.01 and UTIL under 596 the bears should be fine. As always stay alert for any potential whipsaw. More information is found at Keybot's site;

Keybot the Quant

Monday, March 2, 2015

SPX Daily Chart Upward-Sloping Channel Overbot Negative Divergence Developing

Last week, the indicators on the SPX daily chart was showing some near term juice so a move higher was expected and is occurring. The chart is negatively diverged across the four-month time frame and the very near term (the last few days) except the MACD line (neon green line) that wants another high in price. The rising wedge, overbot conditions and neggie d created the spank down four days ago but the MACD was not quite ready. Note, however, that the MACD is neggie d over the four-month period a sign of weakness. So the bears are all set to sell the market except for that pesky MACD.

Price has touched the upper or lower rails of the upward-sloping channel 8 times since December so that red channel carries some clout. Perhaps price will seek the lower rail again now down at 2010-2025. Price also needs to back kiss the 20 and 50-day MA's especially the 20-day MA at 2084 and rising. The bears are beaten everyday for the last month but they will fight back starting anytime over the next 1-3 days.

The projection is that price comes up for another higher high either today, or tomorrow, or even Wednesday but when that occurs the MACD line should print negative divergence (the MACD will stay below that thin red line in the right margin) and that will lock in neggie d with all indicators in both the few-candlestick period and the four-month period and begin smacking price lower. The full moon hits on Thursday at 1 PM EST and stocks are typically bullish moving through the full moon, so this throws a wrench in the works. The SPX needs to print the higher higher in price to lock in the neggie d on the MACD, so the best thing for bears would actually be for price to rally higher and place the top today. If not, perhaps price comes up for the top tomorrow. If not, and price sells off for a day or two, without printing the higher high in price, it will still want to come back up so that may be in concert with moving through the full moon. Thus the bulls may be able to keep things elevated this week but even so the upside appears very limited.

To move away from that windbag rambling, in a nutshell, the SPX should top out any day, you will see the neggie d on the MACD and that will send price lower to the 20 and 50 day moving averages and then perhaps the lower rail of the channel. Sideways to sideways down 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 8:39 PM: The bulls ran stocks higher in the afternoon with the SPX printing a new all-time closing high at 2117.39 but not a new all-time high. So price comes back up for a matching or higher high just as the long and strong MACD over the last few days wanted (as discussed above). With today's elevated price, the MACD remains below the peak from 3 or 4 days ago, thus, neggie d and the chart is set up for the bears to begin a spankdown. However, since price has a big up today a further move up is likely (momentum) with price taking out the all-time high at 2119 and change; its only a couple points higher. Watch the MACD line; as long as it does not come up above the peak from a few days ago, the bears will create a spankdown for stocks beginning tomorrow or Wednesday. If the MACD line edges up above the high from a few days ago, the bulls have more gusto for a few more days when the top will print. The guess would be a print at 2018-2022 tomorrow which serves as the near term top in the market probably after lunch time. If the MACD prints higher, then the top will likely occur the end of the week or early next week at 2025-2032. Copper is trading weak and this will create market weakness if it remains in place overnight.

Note Added 2:35 PM EST on Tuesday afternoon, 3/3/15: The bears came to play today from the get-go spanking equities down due to the neggie d. Copper weakness sends stocks lower. Watch the bull-bear level at JJC 32.01 (identified by the Keybot the Quant algorithm) to see if bulls can stage a comeback. JJC is at 31.78 in the bear camp causing market weakness.

COMPQ Nasdaq Composite Monthly Chart Overbot Negative Divergence Developing

The previous SPX monthly chart (type symbols in the search box at the right margin to bring up a chart of interest) is negatively diverged across all indicators and the Dow Industrials (INDU), is the same set up. So the S&P 500 and Dow are content in rolling over going forward and calling the current levels a multi-year top. The Russell 2000 small caps monthly chart is also in the same camp with SPX and INDU willing to roll over and die.

And then there's the tech and biotech heavy Nasdaq that hits 5000 today smacking the bears in the face. The central bankers are powerful and the latest goose to the stock market is by the PBOC (China) with a rate cut over the weekend. The NXPI and FSL merger announced this morning creates joy in tech land as well. The main thrust higher is due to the largest company in the world; Apple. Retail traders are caught up in the Apple hype and have been buying AAPL regardless of price since November. This thrust higher launches the COMPQ above 5K.

The red lines show the rising wedge, overbot conditions and neggie d  that created the December-January spank down but note that pesky MACD line that continued to slope higher long and strong. After any pull back it wanted the Nasdaq price to come back up one more time; and it did in February. So the higher high in price now, both in February and now a higher high in March, the indicators are all negatively diverged, except the pesky MACD line. If markets collapse this month, the MACD line may drop negative to lock in current highs as the multi-year highs, however, the more expected path would be a down up down pattern. The green circle shows the MACD remaining long and strong (sloping higher). The other indicators are all negatively diverged (sloping lower) with the higher high in price so a spank down should occur this month, however, the strength from the MACD wants price to come up one more time, then the index should roll over with a multi-year top in place.

Price is far extended above the moving averages needing a mean reversion lower. The selling volume in Dec-Jan was lower than the buying volume in October (which was caused by obscene global banker intervention that stopped a market crash) so that provided a feather in the bulls cap. The bears needed to push lower harder. So price mounts the big up in February for a new high and now a new 15-year high to begin March. The buying volume is weaker than both December and January so that is a feather in the bears cap. The bulls needed to push higher harder.

Projection is for the Nasdaq to sell off in March-April, then come back up to the current highs above 5K again in April-May then roll over with a multi-year top printing. The SPX and Dow may roll over at any time and do not have a reason to print higher highs so their negativity may drag the Nasdaq lower sooner rather than later as well as limit the recovery move higher for the Nasdaq. The Nasdaq has a six-year rising wedge pattern which is very ominous since the collapses from rising wedges can be quite dramatic. The projection is that the major indexes top out at anytime from now through May printing a multi-year top. Obviously, if AAPL begins dropping in force it will drag the indexes lower just as it dragged the indexes higher the last few 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.

COMPQ Nasdaq Composite 1-Minute Chart NASDAQ PRINTS 5000 FIRST TIME IN 15 YEARS

The Nasdaq prints 5K for the first time in 15 years at 10:29 AM EST on 3/2/15; levels not seen since the tech bubble in 2000. The Nasdaq all-time high is 5132.52 on 3/10/00 and all-time closing high is 5048.62 on 3/10/00; so there is more work to do for the bulls. In addition,  the inflation-adjusted high for 5K in 2000 is 7K nowadays. Thus, 7K is needed to compare equally to the dotcom bubble at 5K.

Nonetheless, congratulations to the bulls, or more correctly, congratulations to the central bankers now acting in collusion around the world. The PBOC rate cut is the latest global goose that can be given credit for pushing the Nasdaq higher. NXPI and FSL announce a merger deal that will create a $40 billion company creating a boost in semiconductors and the Nasdaq. AAPL trades higher boosting the Nasdaq and is the key influence in sending the COMPQ above 5K. 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 Monthly Chart Overbot Negative Divergence

The monthly charts receive new prints last Friday as February ends. Today is the first trading day of March so a new candlestick will begin and remain active for the next 22 trading days until EOM and EOQ1 on Tuesday, 3/31/15. Keystone has been highlighting the monthly charts over the last few months to identify where the multi-year top will potentially print. The red lines show the rising wedge pattern, overbot conditions and negative divergence across all indicators that occurred with the higher price high in December, thus, a smack down occurs in January.

There was no reason for price to come back up since the neggie d with the indicators shows that the rally is completely exhausted. Six years is a long way for this bloated bull to run. But price does come back up for a higher high constantly fueled by central banker happy talk. The maroon lines show price with a higher high and the indicators remaining universally negatively diverged so a spank down is anticipated for March. Note the MACD cross is positive so the market bears need this cross to turn negative asap. If the MACD cross remains positive the bear case will not arrive and stocks will remain at elevated levels. Price is extended far above the moving averages requiring a mean reversion.

The green lines for the indicators show how the long and strong profiles kept sending prices higher. Negative divergence was appearing last year and created the strong smack down in October but back then the RSI and MACD were long and strong wanting to see one more high in price, which occurred in December and that ushered in the neggie d and the retreat. The chart is very negative sans the MACD positive cross.

In January, price dropped into the same range as the October sell off but note that the selling volume is not larger than the buying volume in October. The central bankers came out with guns blazing in October to prevent a market crash so it is understandable that the volume sky rocketed with the easy money flooding into markets in waves. Since volume was not robust to the downside in January, the bulls puffed out their chests and ran stocks higher in February. Note, however, with that record-setting February rally, the major indexes up +6% and higher, that buying volume could not surpass January's selling volume. This helps the bear case for March.

The chart says a multi-year top is in place for the stock market and a high print would be expected anytime say now through May with sooner having more clout than later. Cash is a position; it would be prudent to exit any long stock play that you are not willing to hold for a few years time. If you are a die-hard bull, and addicted to the six-year rally, at least make sure your current long plays are liquid with millions of shares traded daily not thousands. That way, if the hammer is lowered, you will at least be able to get out that tiny exit door as everyone else jams their way through. Projection is sideways to sideways lower going forward. In addition, as pointed out several times, the long term SPX monthly displays an ominous rising wedge pattern and 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.

February Publication of the Daily Chronology of Global Markets and World Economics Available from Amazon

The February publication of the Daily Chronology of Global Markets and World Economics 2015-02 is available through Amazon (AMZN). February is another wild month for markets. Stocks were trading choppy sideways chewing up bulls and bears but the bulls win out in February catapulting markets higher on the Ukraine ceasefire, Greece bailout and central banker happy talk. Deflation remains rampant in Europe. Global stock indexes are printing record highs with bond yields at record lows. One-third of Europeans bonds are trading negatively!

The West Coast dock slowdown created angst. Chinese rings in the lunar New Year; the "Year of the Sheeple." Net neutrality is approved changing the internet forever; the government steps in to fix problems that do not exist. The Holy War waged by ISIS Islamist radicals against Christians and Jews continues. Social unrest and wars continue around the world. Ukraine fighting is ongoing despite the ceasefire. ISIS Islamist radicals are performing genocide against Christians and Jews while the world looks on.

The chronology records economic history in real time preventing revisionist tampering in future years. Many of the same asset managers telling everyone to go long the market in 2008 are repeating the same mantra these days. Their quotes and words are recorded. Perhaps they are correct with their market cheer leading; perhaps they are not.  If a multi-year top prints during the weeks ahead, the chronology serves as the most accurate accounting of the market topping process. The chronology is the most reliable and easy to understand source on the web or in hard print explaining global markets.

As always, all monthly publications are available from the links in the left margin. We are living through historic stock market and economic times. The daily chronology is the most accurate accounting on how a potential epic stock market top forms in real-time. The detailed chronology prevents the writing of revisionist history in the future.The monthly publications are compatible with most electronic devices and include an extensive Business Acronym List and Ticker Symbol List. The Acronym List is the most comprehensive list available on the internet. The chronology is not available in hard copy and only distributed around the world electronically.

Daily Chronology of Global Markets and World Economics February 2015-02