Thursday, July 2, 2015

Keystone's Midday Market Action 7/2/15; Monthly Jobs Report

Taking a break from the ongoing Greece drama, the Monthly Jobs Report is on tap today. Due to the timing of the Independence Day holiday, the Monthly Friday Jobs Report is released on a rare Thursday morning since markets will be closed tomorrow. The consensus is 233K jobs and an unemployment rate one tick lower at 5.4%. Last month was a 280K job gain with a 5.5% unemployment rate. Average Hourly Earnings are expected to increase +0.2%.

This year’s job gains are as follows; January 201K jobs, February 266K jobs, March 85K jobs, April 223K jobs, May 280K jobs, June (today; estimated) 233K jobs. There are two more jobs reports before the September Fed meeting where the first rate hike may be announced.

At 8:28 AM, S&P +3. Dow +28. Nasdaq +9. DAX +0.2%. CAC is flat. FTSE +0.4%. Euro 1.1057. Euro/yen 136.66. Dollar/yen 123.62. Pound 1.5570. WTIC oil 57.00. Brent oil 62.40. Natty gas 2.82. Gold 1158. Silver 15.49. Copper 2.6250.

At 8:30 AM, the Monthly Jobs Report is 223K jobs and a 5.3% unemployment rate. Average Hourly Earnings are dead flat at +0.0% and only a paltry +2.0% annually. The revision to the last two months of reports decrease jobs by 60K. The 223K headline jobs number is a disappointment since many traders and analysts were whispering a 300K expectation. Sadly, the Labor Participation Rate drops -0.3% to 62.6% the lowest since October 1977. Americans cannot find jobs and are simply giving up. The decline in the labor force does not forecast a healthy economy. Average Hourly Workweek is unchanged like the wages. Unemployment Claims are up 10K to 281K.

Stocks pop on the news since the lack of wage inflation means the Federal Reserve will not raise rates anytime soon. The low labor participation rate will also cause angst in the hallway of the Eccles Building. Equities rise because central banker easy money will continue indefinitely  making the rich richer. The whole idea behind the Fed’s obscene six-year Keynesian monetary policy is to raise inflation but if wage inflation does not exist inflation will not exist and the grand experiment will fail.

S&P +5. Dow +43. Nasdaq +13. The 10-year yield is trailing lower from 2.415% down to 2.389%.

At 8:40 AM, S&P +7. Dow +55. Nasdaq +16. DAX +0.1%. CAC -0.1%. FTSE +0.4%. Euro 1.1095. Euro/yen 136.58. Dollar/yen 123.12. Pound 1.5615. WTIC oil 57.19. Brent oil 62.63. Natural gas 2.82. Gold 1162. Silver 15.57. Copper 2.63.

US Treasury yields are; 2-year 0.65%, 5-year 1.66%, 10-year 2.40%, 30-year 3.20%. The 2-10 spread continues expanding slightly to 175 basis points.

Traders and analysts remain bullish across the board since the central bankers keep printing money. Permabull strategist Richard Bernstein proclaims higher stock markets to end the year and two or three more years of upside for stocks. He predicts that in three years everyone will be bullish which will identify the market top.

Stocks tend to trade higher at the start of a new month especially the new quarter and second half of the year as new money is put to work. Stocks are typically buoyant into a holiday weekend. The full moon peaked last evening for this month and stocks are typically bullish moving through the full moon. Seasonality factors are in the bull camp but trading will be impacted by the jobs report and the ongoing Greece drama.

At 9:06 AM, S&P +5. Dow +39. Nasdaq +11. Euro 1.1092. Gold 1165. Silver 15.63. Copper 2.6315. 10-year yield 2.386%. German bund 0.861%. Centene announces plans to buy Health Net for $6.3 billion. HNT +17%. CNC +4%. The healthcare M&A continues. JPM upgrades HealthSouth. TSLA is up +4% on strong sales numbers.

AN reports strong auto sales. GRUB gains +2.5% on a RBC upgrade. BP gushes +4.2% higher after announcing a settlement concerning the 2010 Gulf Oil spill. XOOM zooms +21% higher on news that EBAY’s PayPal is buying the digital money transfer service. BA gains +0.4% after raising prices on its jets. FB gains +0.4% after detailing plans to increase its share of the mobile video market dominated by YouTube.

US futures leak lower into the opening bell. S&P +2. Dow +17. Nasdaq +7.

The session begins with equities marching marginally higher. The S&P 500, Dow Industrials and Nasdaq Composite are positive but the Russell 2000 small caps are negative. VIX 15.91 remaining above the important 200-day MA at 15.39 signaling bearish markets ahead. UTIL is up +1.3% as yields slip lower. Energy stocks lead. XLE +0.7%. Stocks appear headed for a boring sideways pattern with low volume as traders sneak out the back door to begin the barbeque weekend early.

At 10 AM, Factory Orders are down -1% missing the -0.5% expectation. The prior month is revised lower from -0.4% down to -0.7%. Factory Orders are down for the largest month on month drop (-1%) since February. The SPX is down 4 points, the Dow is up 36 points and Nasdaq up one point. The RUT is negative. VIX 15.95. Euro 1.1096. USD 96.06. 10-year yield 2.38%.

(As always, Keystone the Scribe chronicles the daily market action and response to key events.)

Wednesday, July 1, 2015

SPXA200R S&P 500 Stocks Above 200-Day MA Trending Lower

The opinions of most Wall Street pundits, analysts, traders, strategists and market participants are worthless. After all, the same jack*sses on television now are the same ones that told you to put your life savings into stocks in 2007-2008. There are a few worth paying attention to, however, and one is Louise Yamada a seasoned technician. Yamada has remained bullish over the last couple years but appears to be wavering and concerned over the last month that stocks may be running into a rough patch ahead.

She cites the number of stocks above the 200-day MA shown in the chart above. Note that while the broad market (SPX) continues higher it comes with less and less participation over the last two years. In a robust and sustainable market, the chart above should be sloping up not down. Big-time stocks such as AAPL are supporting the elevated stock index prices but the broad market is fading. 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.

NYA NYSE Composite Weekly Chart 40-Week MA Cross Signals Cyclical Bear Market but Battle Continues

The NYA is under the 40-week MA for the last couple days a very bearish development. This cyclical market indicator has been highlighted before. Bears are on easy street as long as the NYA stays under the 40-week MA. Bulls recover and begin a new rally higher if the NYA moves above the 40-week MA now at 10895. NYA price is at 10805 about 90 points below. The stage is set.

The red rising wedge pattern is bearish and ominous. The collapses out of rising wedges can be quite dramatic. NYA peaked at 11250 so 10125 would be a -10% correction. The red lines for the indicators predicted the negative divergence spankdown. The indicators remain weak and bleak wanting to see lower lows on this weekly basis although the money flow wants a bounce in price now. It is also reasonable to expect a back kiss of the 40-week MA since it is a critical signal line.

Stocks were on the verge of collapse last October when the global central bankers colluded to save the day including the PBOC, BOJ, Fed, ECB and BOE. The other three stick saves in the chart were due to central bankers printing more money. The 40-week MA fails one more time. Will the central bankers save the day again? A Greece bailout deal appears on tap so stocks are headed for a strong upside open. Watch NYA 10895 like a hawk. 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 on Friday morning, 10:18 AM EST: US markets are open about 45 minutes thus far. The battle intensifies. The NYA has remained below the 40-week MA but is now moving up for a critical resistance test. The 40-week MA is 10898. NYA is now printing 10891. This is for all the marbles going forward. 

Monday, June 29, 2015

CPC and CPCE Put/Call Ratios Daily Charts Signal a Market Bottom at Hand


Remember that Keystone highlighted the low CPC and CPCE put/call ratios over the last couple weeks or so expecting a market top due to the uber complacency. The top occurs. The idea was to wait for the put/calls to spike where a tradeable bottom can be placed. That occurs today as traders are experiencing fear and panic. The CPC jumps to 1.38 and CPCE to 0.94. The uber high readings match up with the October market low and also the early August low. It may take a day or few to place a rigid bottom for stocks but with these high readings, long positions can be nibbled on and the scaling in process for long plays can be started. A stock market bottom will occur at anytime in the next few days.

The Federal Reserve and other central bankers are the market. Interestingly, the PBOC cut rates and lowered the triple R's on the weekend but the SSEC sold off anyway. The ball is in ECB President Draghi's court; he was quiet today. The market bottom in stocks will likely occur when Draghi proclaims that he will run the printing presses full tilt to mitigate Greece turmoil. The central bankers are the market. 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.

Saturday, June 27, 2015

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

The SPX is below the 200 EMA on the SPX 60-minute chart at 2107 signaling bearish markets for the hours and days ahead, however, the move lower is not yet convincing. As highlighted in the previous message, several moving averages and the June starting number all converge at 2095-2108. The importance of this range cannot be understated. Bulls need to push above 2107-2108 to reassert their dominance and send stocks strongly higher. If so, the SPX would move above the 200 EMA signaling bullish markets ahead.

The bears must keep the SPX under 2107-2108 with all their might. As long as they do they are fine and markets will weaken and slip away to the downside. Under 2095 and stocks will collapse strongly lower immediately to 2091 then to 2086. It is reasonable to expect a back kiss of the 200 EMA although a successful back test has already occurred three days after price fell through the 200 EMA. June began at 2107 so there may be a push higher to challenge this area as the month ends on Tuesday and 2107 determines an up or down month.

Bears are fine and in charge under 2107-2108. The bulls will take over above 2107-2108. 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 Daily Chart Rising Wedge Versus Ascending Triangle

The battle between the red rising bearish wedge and bullish green ascending triangle patterns continues. Bears win below the red lines while bulls win above the green lines. This battle is high drama for the last couple months. The bulls broke up and out of the green triangle in May only to receive a spank down from the upper red trend line of the rising wedge. Then price falls through the lower rail of the red wedge causing bears to cheer but bounces at the bottom trend line for the green triangle empowering the bulls again.

The bears receive another successful back test of the wedge failure which lights the way lower only for the SPX to bounce off the lower green trend line again. The SPX then ran higher only to fail at its 2120 base line a few days ago. Price appears unable to move above the red trend line with several successful back tests occurring so price weakens and drifts lower. The bulls are still fighting, however, with price at 2101 since the lower green line support is at 2091. Under 2091 will be big trouble for bulls and the 2078-ish area will be likely on tap.

Note how price respects the 100 and 150-day MA's support levels this year. Price bounced directly up off the 100-day MA support at 2095 on Friday. The 20-day MA is 2103. The 50-day MA is 2107. June started at 2107 with only two trading days remaining that will determine if the month is positive, or negative. The 200 EMA on the 60-minute chart, a key short-term signal, is, yes, you guessed it, 2107 (SPX is under the 200 EMA indicating bearish markets for the hours and days ahead; bulls need the SPX above 2107-2108 pronto or they will lose their grip). The 20-week MA is 2098. Thus, a serious gauntlet of support/resistance is at 2095-2107. Market bulls win big above 2107-2108. Bears win big under 2095. The 2095-2107 range is noise.

If bulls take out 2107-2108, price will run to 2110, then 2118-2120 to test the ascending  triangle baseline break out, then 2130 and 2135 and higher to 2145 then 2180. The bears must take price under 2091 which should lock in the bearish rising wedge pattern which would typically result in a dramatic collapse. The 1980-2030 level would be easily doable over the next couple months. If 2091 fails, price will immediately test 2086 and if that fails, the 2072-2081 range is next then much lower. Greece talks appear to be breaking down which is a negative for stocks but the PBOC (China's central bank) cut rates a few hours ago which will reinflate the Chinese stock bubble and cause buying around the globe. 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 algo, Keybot the Quant, flipped to the short side this week at SPX 2106. The stock market remains a coin-flip in a sideways choppy pattern. More info is found at Keybot's site;

Keybot the Quant

Sunday, June 21, 2015

SPX Support, Resistance (S/R), Moving Averages and Other Important Levels for Trading the Week of 6/22/15

SPX (S&P 500) support, resistance (S/R), moving averages and other important levels are provided for trading the week of 6/22/15. 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 Monday with the SPX starting at 2110, the bears only need one point lower, under 2109, to create a downside acceleration in the stock market so keep an eye on the S&P futures overnight. The bulls need to touch the 2122 handle to create a quick acceleration to 2130. A move through 2110-2121 is sideways action to begin the week. The SPX began the year at 2059 so stocks are positive on the year up +2.0%. Interestingly, the key 10-month MA is at 2059 as well. The last day of trading for June, EOM, is seven trading days away, Tuesday, 6/30/15, so the 2107 level will gain importance each day forward since it determines if the month is positive or negative.

Important and direct support/resistance levels are 2135, 2131, 2126, 2121, 2118, 2108-2110, 2104-2105, 2099 and 2091. The support gauntlet at 2108-2110 is key as well as 2104-2105 since the 50-day MA at 2105.57, 20-day MA at 2104.30 and the 200 EMA on the 60-minute chart at 2104.22 is within this range. If 2104 fails, 2099 is next, then 2095 then 2091.

Looking at the big picture the strongest S/R is 2135, 2131, 2126, 2121, 2118, 2108-2110, 2104-2105, 2099, 2091, 2086, 2081, 2079, 2076, 2072, 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 (130 handles) range for the last seven months, 2061-2120 (59 handles) for the last five months and 2072-2120 (48 handles) for the last three months, with price attempting to break out above the top of the ranges at 2120-2130 late last week.

Bulls win big above the 2121. Bears win big under the 2104-2105 level. The battle continues between 2106-2120. Pay attention to June’s starting number at 2107.

2135 (5/20/15 All-Time Intraday High: 2134.72)
2132
2131 (5/21/15 All-Time Closing High: 2130.82)
2129
2126.65 Previous Week’s High
2126 (4/27/15 Intraday High: 2125.92)
2123
2121.64 Friday HOD
2121 (4/24/15 Intraday High: 2120.92)
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
2109.99 Friday Close – Monday Starts Here
2109.38 Friday LOD
2108
2107.39 June Begins Here
2107
2105.57 (50-day MA)
2105
2104.30 (20-day MA)
2104.22 (200 EMA on 60-Minute Chart a Keystone Market Turn Signal)
2104
2103
2100
2099
2097
2095.32 (20-week MA)
2094 (12/29/14 Intraday High: 2093.55)
2091 (12/29/14 Closing High: 2090.57)
2090.75 (100-day MA)
2089
2086
2081
2079 (12/5/14 Intraday High: 2079.47)
2076.19 (150-day MA; the Slope is a Keystone Cyclical Signal)
2076 (11/28/14 Intraday High: 2075.76)
2075 (12/5/14 Closing High: 2075.37)
2073 (11/26/14 Closing High: 2072.83)
2072.49 Previous Week’s Low
2072
2071 (11/21/14 Intraday High: 2071.46)
2069
2067
2065
2063
2061
2058.90 Trading for 2015 Begins Here
2058.71 (10-month MA; a major market warning signal)
2057
2056 (11/18/14 Intraday High: 2056.08)
2053
2050.36 (200-day MA)
2050
2049
2046 (11/13/14 Intraday High: 2046.18)
2043.43 (12-month MA; a Keystone Cyclical Signal) (the cliff)
2041
2040
2039.46 (50-week MA)
2038
2034
2032
2030
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
1998
1997
1995
1993 (1/15/15 Closing Low for 2015: 1992.67)
1992
1991 (7/24/14 Intraday Top: 1991.39)
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
1981 (2/2/15 Intraday Low for 2015: 1980.90)
1979
1978
1976
1973
1970
1968 (6/24/14 Intraday Top: 1968.17)
1965
1964
1963 (6/20/14 Closing High: 1962.87)
1962
1961

1960

BDI Baltic Dry Index Weekly Chart

The Baltic Dry Index is an excellent indicator of the global economy as grains, ores, powders, resins and other materials are shipped across the ocean and the demand sends shipping rates higher and the BDI into the thousands and higher. That is not happening. Thus, the global economy is sick. The BDI topped out in late 2013 that was highlighted by Keystone at the time due to the negative divergence (red lines). The BDI has languished ever since. The Fed, BOJ, ECB, BOE, PBOC and other global central bankers as many as 14 key countries this year and more, are pumping stock markets higher by debasing their currencies. Higher stock markets do not reflect a successful economy but instead reflect obscene Keynesian money printing that has gone on for over six years.

The BDI was beaten down so low it had to perform a dead-cat bounce with possie d (green lines) helping to provide a boost. Shipping activity should stabilize from here on out so the shipping stocks can be explored for potential long plays. There is very little stocks of interest on the long side in the market these days but the shippers are worth a look. The sub 1000 BDI verifies a sick global economy and the gains in stocks, that serve to make the wealthy filthy rich at the expense of the middle class and poor, are purely a function of global central banker money printing. 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.

German Bund 10-Year Yield Daily Chart

The German 10-year yield is a remarkable story this year. Money flocked into the bund sending yields down to 0.04%-ish, under the 0.10% level, then whammo, the yield skyrockets to 1.04% in only six weeks time. It is shameful how the Fed, BOJ, ECB and other global central bankers have destroyed the markets over the last few years.

The green channel lower ended due to the positive divergence with the indicators that bounced yield higher off the bottom. The neon line shows a two-leg bull flag pattern playing out from 0.04 to o.70%, call it 0.6% difference to keep the math simple, for the first leg, and then the sideways consolidation with a slightly downward bias, then the second leg began at 0.50% targeting 1.10% (0.50%+0.60%) which was basically tagged a couple weeks ago. The selloff in bunds is historic (traders ran from the bund so prices drop like a stone rocketing yields higher). Traders abandoned the so-called safe haven.

The red lines show the top in yields due to the negative divergence, and the spankdown sends yields lower to currently test the 0.75% 20-day MA support. The 50-day MA is ramping  higher and will intersect the 200-day MA at 0.59% over the coming days forming a confluence of support. The indicators remain weak and bleak so any bounce that occurs will likely give way to lower yields perhaps targeting the 0.55%-0.60% area. Bunds may stabilize after that moving sideways. If Greece turns sour and general turmoil in global stock markets develop, traders will seek the bund safe haven again and a sideways move through the 0.30%-0.65% range would be in order. 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.