Sunday, December 21, 2014

SPX Support, Resistance (S/R), Moving Averages and Other Important Levels for Trading the Week of 12/22/14

SPX (S&P 500) support, resistance (S/R), moving averages and other important levels are provided for trading the week of 12/22/14. 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 2079.47 on 12/5/14 and the SPX all-time closing high is 2075.37 on 12/5/14. The bulls move the SPX into the all-time high range last week but could not create a new all-time intraday high and could not create a new all-time closing high only a whisker away.

For Monday with the SPX starting at 2071, the bulls need to touch the 2078 handle and a strong upside acceleration will occur well into the 2080’s. The bears need to push the SPX under 2061 to accelerate the downside. A move through 2062-2077 is sideways action to begin the week.

Traders quickly turn complacent after Fed Chair Yellen provided more dovish talk last week to boost the stock market. Long traders universally expect the bullish December seasonality to kick in with a strong finish to the end of the year; the boat is fully loaded on the bull side. The previous CPC put/call ratio chart, however, verifies the complacency in place which typically identifies a near-term top. The SPX moved through an astonishing 106-handle range last week from 1972-2078.

The 2040 is extremely strong support/resistance, now support, and price blew up through on the Yellen goose. It would be prudent for 2040 to be back tested as well as the December starting number at 2068. Price will also need to back test the 200 EMA on the 60-minute chart at 2034. This creates a landing zone at 2034-2040 for an important bounce or die decision.

Monday will begin with high drama as the bulls are a stone’s throw away from new all-time historic highs. The 2073, 2075-2076, 2078 and 2079 levels all offer strong resistance. On the down side, the 2065-2068 level is strong support, then 2061 then 2057.

2079 (12/5/14 All-Time Intraday High: 2079.47) (12/5/14 Intraday High for 2014: 2079.47)
2077.85 Previous Week’s High
2077.85 Friday HOD
2077
2076 (11/28/14 Intraday High: 2075.76)
2075 (12/5/14 All-Time Closing High: 2075.37) (12/5/14 Closing High for 2014: 2075.37)
2074
2073 (11/26/14 Closing High: 2072.83)
2071 (11/21/14 Intraday High: 2071.46)
2070.65 Friday Close – Monday Starts Here
2070
2069
2067.56 December Begins Here
2067
2065
2061.03 Friday LOD
2060
2057
2056 (11/18/14 Intraday High: 2056.08)
2054
2052
2051
2049
2048.65 (20-day MA)
2046 (11/13/14 Intraday High: 2046.18)
2041
2040
2039
2038
2035
2034
2033.70 (200 EMA on 60-Minute Chart a Keystone Market Turn Signal)
2032
2030
2024
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
2007.59 (50-day MA)
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
1998
1997.97 (20-week MA)
1997
1995
1993
1991 (7/24/14 Intraday Top: 1991.39)
1990.17 (100-day MA)
1988 (7/24/14 Closing High: 1987.98)
1986 (7/3/14 Intraday Top: 1985.59)
1985 (7/3/14 Closing High: 1985.44)
1983
1982
1979
1978
1977.35 (150-day MA; the Slope is a Keystone Cyclical Signal)
1976
1973
1972.56 Previous Week’s Low
1970.27 (10-month MA; a major market warning signal)
1970
1968 (6/24/14 Intraday Top: 1968.17)
1965
1964
1963 (6/20/14 Closing High: 1962.87)
1962
1961
1960
1958
1956 (6/9/14 Intraday Top: 1955.55)
1951 (6/9/14 Closing High: 1951.27)
1950.02 (200-day MA)
1949
1947
1945.39 (12-month MA; a Keystone Cyclical Signal) (the cliff)
1942
1940
1937
1936
1931
1930.06 (50-week MA)
1928
1925
1924 (5/30/14 Intraday Top: 1924.03) (5/13/14 Closing High: 1923.57)
1920
1917
1912
1910
1906
1902 (5/13/14 Intraday Top: 1902.17)
1901
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 (3/21/14 Intraday Top: 1883.97) (3/7/14 Intraday Top: 1883.57)
1882
1880
1879
1878 (3/7/14 Closing High: 1878.04)
1877
1874
1873
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

WTIC Oil Weekly Chart Oversold Positive Divergence Developing

Oil continues its weakness. We have been waiting for the weekly chart to set up with positive divergence but it continues to not fully cooperate. The green lines show oversold conditions and positive divergence with stochastics, RSI and money flow so a bounce is needed, however, the MACD line remains weak and bleak so price will want to come back down on the weekly basis after any upside move for a week or two. Thus, anyone playing the long oil side right now must remain very nimble and not get too greedy on the upward bounce. Oil will likely travel sideways through 54-65 early in 2015. When the MACD line and histogram turn possie d, probably in mid to late January, that will tell you a more sustainable upside move is on tap ahead. 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.

DVY Dividend ETF Weekly Chart Dividend Stock Bubble Price Extended Overbot Rising Wedge Negative Divergence

One of the surprises this year is the resilience of the dividend stock bubble. But when rich Uncle Fed is there to goose the markets it is not at all surprising. Look at the thrusts higher in October and then over the last week both purely due to central banker collusion promising higher stock markets. The long traders rush in to rape the upside with the Fed's blessing. Investors think that no matter what type of market pull back occurs they will be safe in dividend stocks. Instead they will probably serve as cannon fodder.

Price is extended above the moving averages requiring a mean reversion (pink dots). The retail investors running into divvy stocks for perceived safety are likely going to receive their heads on a platter in 2015. If you enjoyed nice profits over the last few months, why not simply cash-out and sit on the sidelines until 2015 is well underway where you can reassess the situation. Remember, a 3 or 4% divvy does not appear as attractive if you quickly lose -10% or -20% of the capital value. 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.

UTIL Utilities Weekly Chart Overbot Rising Wedge Negative Divergence Developing

Fed Chair Yellen's stock market goosing last week has bullish traders and investors running into blue chip dividend stocks with both hands buying regardless of price. Comically, each trader thinks they are smarter than the other figuring that hiding out in utilities is a win-win providing safety during any broad market down turn at the same time providing a divvy. They are likely running into a buzzsaw and the safety and defensive position they desire only amounts to a fig leaf of coverage.

Utilities print another all-time record high last week and over the last year are up from 480 to 618, nearly +30%!! The indicators are setting up with negative divergence (red lines) but the MACD line and money flow want to see another high over the next couple weeks before the top is placed. When utes top out and roll over that is not a good sign for the broad market which will move down coincidentally or within a couple months time following the utilities lower. Utes should top out moving into and in January.

Keystone opened a position in SDP which is a double inverse shorting the utes but it is early. The position will be added to as time moves along. SDP is very thinly traded so you may want to explore shorting individual utility names instead. Simply assess the negative divergence on the charts to identify the most attractive set-ups. DUK and EXC are short candidates moving forward as the New Year begins. 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.

USD US Dollar Index 8-Year High Sideways Symmetrical Triangle Pattern Negative Divergence Developing

The USD has been forming negative divergence over the last few weeks but the projection was for higher highs on a weekly basis since all the indicators are not yet fully cooperating to provide a pull back. All indicators are neggie d (red lines) now except for the MACD line (green line) that remains long and strong. So a pull back is needed but the US dollar index will come back up to satisfy the MACD line which should firmly lock in the neggie d on the next high price print and allow a more substantive pullback ahead. Thus, one to three more candlesticks are needed for the MACD to turn neggie d which is one to three weeks time.

So playing the long side is not attractive for the dollar right now nor is the short side especially considering the parabolic move and upside momentum. In early January, however, a nimble short trader may give the short side a try once the MACD goes neggie d. Over the six-year time frame the MACD, stochastics and ADX are negatively diverged (red lines) hinting that lots more sideways is ahead with a slight upward bias on a multi-month and yearly basis. Thus, the dollar may trade soft in January-February but then recover and float upwards again into summer time. The key phrase is 'lots of sideways'.

The dollar prints at 8-year highs as shown by the green circles. Note that price is exploding higher similar to the 2008 action leading into that commodity collapse and market collapse later in that year. As soon as the Fed saved the day with the Keynesian QE1 in March 2009 the dollar collapses and gold sky-rocketed. Once money-printing begins the currency value drops as the supply of dollars increases drastically. The blue lines show a sideways symmetrical triangle with vertical sides of 16 to 18 bucks. Using 80 as the break-out, this opens the door to a dollar at 96-98 in the years ahead. In early 2015, however, the dollar will likely favor the 85-90 area before resuming the upside.

The blue circle shows the false breakout to the downside in 2011. This typically happens with a sideways triangle pattern. About one-half to two-thirds of the way through the triangle pattern price will typically break out one way or the other but this is a false breakout and once price returns inside the triangle the projection is that the true breakout will occur in the opposite direction which is what occurred. The pink box shows the ADX at 49 well above the 25 level showing the upside move to be a strong trend going forward. Mixing it all together and sprinkling magic dust on the analysis, the projection is for the dollar to move sideways to sideways higher for perhaps a couple years forward favoring the current level at 85-90 in early 2015 (due to the neggie d) then floating higher late 2015 and beyond. 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 CBOE Put/Call Ratio Daily Chart

The near-term stock market tops are easy enough to identify (red circles) as rampant complacency and lack of fear continues in the stock market. As the famous Alfred E. Neuman says, "What? Me Worry?" The central bankers control the markets so after Fed Chair Yellen provides more dovish remarks with the first rate hike not on tap until summer 2015 and later, long traders jump on the bullish side again raping the upside for all its worth. Why not? The Fed hands obscene stock market gains to those that own stocks. The wealthy become wealthier. Let the disadvantaged eat cake. It's there own fault for not having the money to own stocks. This is the new, present-day modern America.

When the CPC prints in the 0.7's and lower, the complacency is out of hand, traders are buying any stock with a heartbeat and not even bothering to look at fundamentals or technicals. There is no reason to consider such old school approaches to buying stocks since the Fed is goosing the stock market higher to enrich the elite class as well as set up their own retirement plan. Former Fed Chair Bernanke receives $250K for a token lunch engagement these days and Yellen is all to eager to do the bidding of the banks since she too will be rewarded with a luxurious retirement package for supporting the wealthy class with her policies.

When the CPC prints above 1.20, a whiff of fear and panic begins to enter markets and that is the time to begin nibbling on long positions since a bottom is near for stocks. The 1.20+ level was barely violated as Yellen goosed the markets last Wednesday. Note how the stock market tops (red circles) honor the 0.7's guideline but the market bottoms do not firmly honor the 1.20+ guideline. This behavior verifies how the Federal Reserve creates the stock market bottoms and recovery moves especially when they fear the markets are ready to tumble down the rabbit hole. Also of interest, note the move on Thursday, in a few hours time, traders went from a tinge of fear developing (above 1.20) to immediately turning fearless and complacent (in the 0.7's) in a heartbeat. All Hail the central bankers! Long traders kneel in front of a statue of Yellen each morning praising the female Keynesian God.

The ECB chimed in (global central bankers are colluding to provide coordinated stimulus to pump stock markets higher) promising more stimulus further goosing the stock market higher. The Fed provides more easy money heroin by relaxing the rules and regulations against banks to further boost stocks last Friday. These rules were required to help guard against another 2008-2009 financial crisis but no one cares anymore; the greed is rampant on Wall Street. The Fed goosing is blatant and sowing the seeds for a sad America ahead.

Bullish traders are spiking the eggnog dancing with lampshades on their heads expecting the happy December seasonality and Fed support to carry through into 2015. There is no reason for fear or worry. The elite class that own stocks are carrying Yellen on their shoulders along the halls of the Eccles Building celebrating a season of stock market joy. However, what does the chart tell you about the direction ahead? 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.

BPSPX Bullish Percent Index Daily Chart

The BPSPX indicator remains on a double whammy market buy signal. When the BPSPX reverses six percentage-points to the downside a market sell signal occurs and under 70% is a double whammy sell signal. When a six percentage-point reversal to the upside occurs a market buy signal is issued and if the BPSPX moves above 70% a double whammy buy signal occurs which remains in place.

The bears had a victory in place on a silver platter but were smacked in the teeth by Fed Chair Yellen. The recent top is at 76.40 so six percentage-points lower is 70.40 almost exactly at the 70 level. Thus, as of Wednesday, 12/17/14, before Yellen flapped her dovish wings, the markets were on the verge, only a hair away, from a double whammy market sell signal. The Fed is not stupid; they have a room full of technicians warning of the pending doom. Thus, Yellen announces that the 'considerable time' statement remains noted in the FOMC statement (the expectation was that the statement would be removed) so the first rate hike is not coming for six months or more in H2 2015 which creates the thrust higher in stocks. The central bankers are the market. The rally move is an exact repeat of the mid-October bounce. Stocks are not turning higher due to technicals and fundamentals, quite the contrary, instead markets are goosed by the Fed. Yellen, the Keynesian femme fatale, strikes again.

The BPSPX  bounces from 70-ish stopping the double whammy sell signal from occurring. Bulls celebrate all weekend long drinking Fed wine and injecting ECB crack cocaine into their veins ready to buy more stocks in the week ahead. The bulls remain on a double whammy buy signal. The bears need to push under 70% to create a new round of market mayhem. Keep watching the BPSPX 70% level into 2015 as a key market indicator. 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.

Friday, December 19, 2014

NYA NYSE Composite Weekly Chart 40-Week MA Cross Cyclical Bull Market Fights for Control

The bears are punched in the face over the last couple days like many times before over the last couple years. Yesterday, however, is a serious critical blow to the bearish case since the bulls push NYA back above the key 40-week MA. This is one of Keystone's important cyclical market indicators and determines whether the stock market is in a cyclical bull pattern or cyclical bear.

Note the collapse in the September-October time frame projecting dire trouble ahead. That is why the global central bankers; Fed, BOE, PBOC, BOJ and ECB colluded to save the day and create the late October to early December upside orgy. Markets rolled back over but again are saved over the last two days by the Yellen Rally and the ECB saying the consensus of members is to provide more stimulus; another tag-team approach to pump stock markets.

The batttle continues. Watch this indicator into early 2015 where the winner will emerge and the path for the new year will begin. Use the NYA 10755 level as the key bull-bear level. The NYA may venture through the sideways symmetrical triangle going forward. The slope of the 40-week MA is upward a bullish indication so watch to see if it flattens and rolls over, or not. If you are bullish the market you will have a happy holiday into the New Year and enjoy higher markets if the NYA stays above 10755. If the NYA drops under 10755, the bears will begin growling again and the broad market mood will quickly turn negative. The NYA begins today at 10832 about 75 points above the cliff edge signalling a cyclical bull market for the months ahead. Will it 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 Sunday, 12/21/14: The bears got slapped in the face last week and NYA stays above the 40-week MA at 10755 signaling a cyclical bull market ahead. The new week of trading begins at NYA 10890 with a 135-point margin favoring the bulls. Bears need NYA under 10755 or they will be slapped around day after day into 2015.

Thursday, December 18, 2014

Keybot the Quant Turns Bullish

Keystone's proprietary algo, Keybot the Quant, flips to the bull side today at SPX 2047. The NYA Index moves above its 40-week MA at 10755 creating the strength after lunch time. This is a critical blow to market bears since the NYA 40-week MA cross is an important cyclical market signal. In other words, the bulls have regained control of the markets on the intermediate and longer term basis. Continue watching NYA 10755 it will remain important through the end of the year. The NYA is currently printing 10771. As always, stay alert for a whipsaw move for Keybot but the bulls appear to be in strong control. More information is found at Keybot's site;

Keybot the Quant

SPX 30-Minute Chart 8/34 MA Cross Inverted H&S

The 8 MA pokes above the 34 MA signaling bullish markets for the hours ahead. This is in disagreement with the 200 EMA cross on the 60-minute chart so one of them will flinch and join the other to firmly identify the path ahead. The green lines show long and strong indicators that want higher highs for price for several candlesticks ahead. The blue lines show an inverted H&S with the neckline at 2013 and head at 1973 so a target of 2053 is projected at the strong 2054 and 2057 resistance levels. The gap fill is at 2032-2035.

Bears need to create a negative 8/34 MA cross or they got nothing and cannot begin to do this until the SPX prints below the 8 MA to curl it downwards. Follow the resistance levels below to see how many levels the bulls can attain and see where price may stall.

Key support/resistance is 2067, 2065, 2057, 2054, 2047 (20-day MA), 2046, 2040 (very strong overhead resistance), 2032, 2030 (200 EMA on the 60-minute), 2024, 2018, 2011, 2002-2003, 2003 (50-day MA), 1998, 1995 (20-week MA)1988 (100-day MA), 1985-1986, 1978, 1975 (150-day MA), 1973, 1968, 1964, 1964 (10-month MA) and then an air pocket to 1951. 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.