Saturday, August 29, 2015

INDU Dow Industrials 30-Minute Chart Price Travels Record-Setting Range

Last week is record-setting with the Dow traveling the most points in history. Starting late-day on 8/19/15, the Dow travels about 8000 points referencing the large point move highs and lows. This move represents the Dow moving about one-half of its entire value in only 7 days. We live in interesting times.

During the last week, in five days, the Dow moves about 6000 points, about 40% of its entire value. The Dow Industrials finish higher on the week after the turmoil but remain well under the prior week's higher prices. 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, August 28, 2015

AAPL Apple Daily Chart Death Cross

Apple prints a death cross chart pattern with the 50-day MA stabbing down through the 200-day MA. Moving averages are simply a smoothing mechanism for eliminating the daily up and down gyrations in price. The 50-day MA is the average price over the last 50 days and 200 over the last 200 days. Usually, stock prices recover when the death cross occurs since there has already been multi-week weakness as is the case above with a four-day rally off the bottom. However, the death cross does forecast weaker prices in the weeks and months ahead which will occur as long as the death cross remains in place. 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.

Thursday, August 27, 2015

UPS Weekly Chart 20/50-Week MA Cross Cyclical Bear Market H&S

Keystone's UPS 20/50-Week MA Cross signal remains in a cyclical bear market pattern. As you recall, Keystone highlighted the top in UPS late last year and as this year began. UPS receives the negative divergence smack down in January (red lines and arrow). The 20/50 MA negative cross was highlighted in May a very negative market warning signal which has come to pass with the mini-crash in the stock market. If the 20-week MA is under the 50-week MA for UPS (since it is a key global shipping bellwether), the broad stock market is in a cyclical bear pattern. If the 20-week MA is above the 50-week MA, then stocks are in a cyclical bull market pattern as had been the case for a very long multi-year period.

Price begins today at 96.63 and as long as price is under the 20 MA at 98.67 the 20 MA will be dragged lower making for happier bears. The bulls want UPS to recover as fast as possible and push the 20 MA back above the 50 MA to prove the long bull market rally can be sustained. For now, and for the last four months, the stock market remains in a cyclical bear market as per Keystone's UPS Indicator above. 

The pink lines show an H&S (head and shoulders) pattern in play with head at 109 and neckline at 93. Note how price bounced from the neck yesterday and did not fail. If 93 fails, then the downside target to satisfy the H&S would be 77. 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.

RUT Russell 2000 Small Caps Daily Chart 150-Day MA Negative Slope Signals Cyclical Bear Market

Keystone has highlighted the 150-day MA slope several times over the last few months as the top for the markets was being sorted out. The red circles show the teases where this critical moving average was about to flatten and roll over to the downside but each time was stick-saved; until now. The blue circle shows a firm negative slope in play now which signals a cyclical bear market ahead. The question is if the bulls can stage a huge rally strong enough to turn the 150-day MA upward again, or not.

Since the 150-day MA is sloping negatively, the Russelll 2000 small caps have slipped into a cyclical bear market. The bulls must push the 150-day MA higher immediately, otherwise, the bears will gain more and more strength day after day. Since the 150 is sloping downward, the cyclical bear should show its face with lower prices for the weeks and months ahead. The long rally is over. Keep an eye on it. 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 Daily Chart 150-Day MA Slope Flattening

Keystone has highlighted the 150-day MA slope several times over the last few months as the top for the markets was being sorted out. The red circles show the teases where this critical moving average was about to flatten and roll over to the downside but each time was stick-saved. Here we are again and the jury is out. If you are bearish the market, you want the slope of the 150-day MA to rollover to the downside and signal a cyclical bear market ahead. If you are bullish, you want a quick rally that will push the 150-day MA higher and maintain the ongoing cyclical bull market. The question is if the bulls can stage a huge rally strong enough to turn the 150-day MA upward again, or not. Keep an eye on it. The SPX, INDU and RUT are all in a cyclical bear market with their respective 150-day MA's currently sloping negatively. 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.

INDU Dow Industrials Daily Chart 150-Day MA Negative Slope Signals Cyclical Bear Market

Keystone has highlighted the 150-day MA slope several times over the last few months as the top for the markets was being sorted out. The red circles show the teases where this critical moving average was about to flatten and roll over to the downside but each time was stick-saved; until now. The blue circle shows a firm negative slope in play now which signals a cyclical bear market ahead. The question is if the bulls can stage a huge rally strong enough to turn the 150-day MA upward again, or not.

Since the 150-day MA is sloping negatively, the Dow Industrials have slipped into a cyclical bear market. The bulls must push the 150-day MA higher immediately, otherwise, the bears will gain more and more strength day after day. Since the 150 is sloping downward, the cyclical bear should show its face with lower prices for the weeks and months ahead. The long rally is over. Keep an eye on it. 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 150-Day MA Negative Slope Signals Cyclical Bear Market

Keystone has highlighted the 150-day MA slope several times over the last few months as the top for the markets was being sorted out. The red circles show the teases where this critical moving average was about to flatten and roll over to the downside but each time was stick-saved; until now. The blue circle shows a firm negative slope in play now which signals a cyclical bear market ahead. The question is if the bulls can stage a huge rally strong enough to turn the 150-day MA upward again, or not.

Since the 150-day MA is sloping negatively, the S&P 500 has slipped into a cyclical bear market. The bulls must push the 150-day MA higher immediately, otherwise, the bears will gain more and more strength day after day. Since the 150 is sloping downward, the cyclical bear should show its face with lower prices for the weeks and months ahead. The long rally is over. Keep an eye on it. 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 S&P 500 Bullish Percent Index Daily Chart

It has been a long time since we had to explore the lower end of this chart. Long-time readers will remember that the 70% level is key as well as the six percentage-point reversals for the BPSPX. The chart has been in a double-whammy sell signal mode for the last three months since the BPSPX reversed six percentage-points off the top and fell under the 70 level. The double-whammy sell signal remains in place through the waterfall drop this week.

The 30% level is important at the bottom of the chart just as the 70% is at the top of the chart. With BPSPX dropping under 30, that indicates steady bearishness in markets and the selling should continue. The BPSPX bottoms in this near term at 22. A six percentage-point reversal would be 28. Thus, the bulls will receive verification that the stock market rally is strong and sustainable if BPSPX rises above 28. If price then rises above 30, a double-whammy buy signal will be in play and the stock market will be marching steadily higher. Market bears simply need to keep the BPSPX under 28 and the selling in equities will continue. The BPSPX is a slightly lagging signal and serves more as a verification of the current trend. For now, the bears remain in control. 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 10:32 AM:  Whoa! The BPSPX explodes higher to 27.40. The bulls are a hair away from receiving a market buy signal. Bears must hold the line here and stop any further gains in the BPSPX. Watch the BPSPX closely today and tomorrow.

Note Added on Friday, 8/28/15, at 10:20 AM EST: Yesterday the BPSPX exploded higher to 30.80 so the bears are told to sit down and the bulls receive a double-whammy buy signal for the stock market going forward. Bears will need to push the BPSPX under 30 to stall the upside. The bulls are driving the bus now with the BPSPX indicator.

SPX S&P 500 Daily Chart

The stock market prints a strong recovery rally yesterday. The central bankers are powerful. Fed's Dudley says "there is no compelling reason to raise rates in September" so stocks catch a bid. A dead cat bounce was needed and the previous 2-hour charts show the bottoming process over the last couple days. The daily chart shows two low price prints the first on Monday the intraday low shown by the long candlestick shadow and Tuesday where price closed at the low shown by the thick red candle (since price moved down all day). The white candle shows the big recovery yesterday up to 1941.

As price prints a matching or lower low (green bar), the only indicator that is positively diverged is stochastics, as well as oversold, so this helps create the bounce in stocks. The other indicators, however, are weak and bleak preferring to see lower lows in price in the days ahead or week or two ahead. Price gapped down daily during the mini-crash event (purple circles) and those gaps may need revisited.


1921 is the -10% correction level off the May all-time top at 2135 so the S&P 500 is no longer in correction territory. Keystone highlighted the high CPC and CPCE put/call ratios that called for a bottom which occurred. The elevated VIX above 50 also showed fear and panic and is always a good time to nibble on longs. Now what?


The central bankers save the day as usual with Dudley sent out to  pump the stock market and he succeeded with his dovish words. Fed Chair Yellen will bring the tablets down from on high on 9/17/15 with the rate decision only three weeks away. That day is a pivot point where stocks are going to move violently higher or violently lower. A full moon occurs tomorrow and stocks are typically bullish, about 65% of the time, moving through the full moon.


New money is typically put to work at the start of a month and September begins on Tuesday. Stocks tend to be buoyant from the last day of the month through the first three or four days of the new month which is next week. August is a down month and when a month is weak like this month it tends to finish up for the last couple days. So the dominoes are lining up for the bulls.


The Labor Day holiday is Monday, 9/7/15, when markets will be closed, and stocks are typically up the two days in front of a three-day holiday weekend (Thursday and Friday next week); more bull-friendly stuff. The Jobs Report is on Friday, 9/4/15, which may influence market direction. It appears that the bulls have the wind at their backs now into Labor Day. Bears would be well served to try and create weakness today if they can since stocks may begin lifting again into the weekend and next week. The bears may growl from 9/8/15, as traders return from holiday, into the Fed decision on 9.17/15. Of course this is all seasonality and historical market mumbo-jumbo, and with high volatility, each day can only be taken one step at a time.


The gaps serve as upside targets. Last week's low is 1971 which is a resistance target where a bounce or die decision would occur. There is strong price resistance and support at 1985-1991, 1978, 1973, 1964, 1951, 1942, 1928 and 1924. Price begins at 1940.51. The expectation is for some further buoyancy in stock prices but in the days ahead at some point price should come back down to the lows again. 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 9:52 AM: The SPX launches higher and tags the 1971 level (last week's low) out of the gate and fills the first gap. Watch the 1971-1973 resistance, if the bulls push up through, then 1978 is next. Bears need to hold the 1971-1973 resistance. Price is at 1966 using the 1964 as support.

Wednesday, August 26, 2015

Keystone's SPXA150R Indicator

Keystone's SPXA150R Indicator: The neutral range is from 25 to 80.  When the bulls are rallying over time, the indicator moves upwards over 80 indicating that markets are getting into more and more lofty territory, thus, the bearishness increases the higher the indicator moves.  Bearish at 80-85, Strongly Bearish at 85-90 and Uber Bearish at 90+. The 90+ area is typically a fantastic place to short from; you will typically notice euphoric market sentiment. If SPXA150R is over 90 you had better be buying puts, seeking other protection, ditching longs and going short. 

Conversely, when the broad market selling is overdone, and the indicator moves down towards and below 25, the selling is becoming out of hand and a reversal back up is in orderBullish at 25-20, Strongly Bullish at 20-15 and Uber Bullish sub 15. The SPX dropped to 12 which is uber bullish so you knew a relief rally was about to occur, and it did. Stocks will receive more oomph with the SPXA150R moving above 25 and higher. 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.