Friday, October 24, 2014

SPX 2-Hour Chart Overbot Negative Divergence

The SPX 2-hour chart is all set up with negative divergence except for the MACD line still playing around. The red rising wedge is bearish and there is further room for another move to 1960-1961. The previous 1-hour chart is fully negatively diverged so it hints that the MACD line may simply roll over from here. Key S/R is 1951, 1958 and 1960-1961. The 1958 may be in play where the SPX tops out at any time now. The ROC is already weak and bleak wanting to see lower lows in price after any bounce occurs. The RSI did not reach overbot territory so the confidence in the top would be far greater if it had.

As this is typed, here comes price up above 1956 so the 1958 R is in play. Keep watching to see when the MACD rolls over which should place the near-term top (as long as a positive news event does not occur). If price breaks up through 1958, then the 1960-1961 resistance in play which should serve as a top. The RSI needs to stay under the overbot territory to move the SPX price lower. If the RSI receives a little boost that may extend the upside but a top should occur at any time at 1961 or lower. The way things are now the guess is that the SPX tops here at the 1958 R and rolls over. Use the MACD line as a guide. 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 60-Minute Chart 200 EMA Cross Overbot Negative Divergence Tight Bands

The bears were punched in the face this week with the SPX moving above the 200 EMA at 1938.78 signaling bullish markets for the hours and days ahead. Market bears need price under the 200 EMA or they got nothing. The red lines show universal negative divergence with overbot conditions and a rising wedge pattern so a spankdown is needed in this 1-hour time frame. The money flow is already weak and bleak wanting to see lower lows in price after any bounce would occur.

The standard deviation bands are coming in tight ready to squeeze out a big move either a rocket ride higher or a collapse lower. The chart favors the bears for the hours ahead. If bearish on the markets, you cannot have sustainable hope until the SPX loses the 200 EMA at 1938-1939. Bulls remain in full control of markets above 1939. 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.

WTIC West Texas Crude Oil Daily Chart Oversold Positive Divergence Lower Band Violation Price Extended to Downside

Oil had been tracking stocks in recent days but weeks before the relationship was actually divergent. The robust stock market rally occurs in recent days but overall the oil price staggers sideways. Yesterday, oil price receives the initial launch from the positive divergence (green lines) across all indicators that place a near term bottom. Keep your ey e on the wiggle on the MACD line but all-in-all the daily chart is at a near-term bottom. The lower standard deviation band (pink) was violated so price will want to move back to the middle band now at 86.45 and dropping.

The dots show price extended to the downside under the 20 MA, under the 50MA under the 200 MA so a mean reversion is needed (price moves higher). The resistance levels at 85 and 88 are logical upside targets and encompass the center band (20 MA). The weekly chart for WTIC is developing positive divergence but is not fully ready to place the sturdy bottom, therefore, the bounce on the daily above should continue but then oil price will likely top out in the short term days ahead in the 85-88 zone and roll back over to the downside to test the bottom again. This will allow time for the weekly chart indicators to set up with universal possie d so a firm and sustainable bottom can be placed.

Therefore, only nimble and speculative traders should be in oil. Price should ride higher in the days ahead but do not overstay your welcome if long since price will likely roll back over again and place perhaps a firm and sustainable bottom at 78-82 during November. 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, October 23, 2014

SPX 2-Hour Chart Inverted H&S Overbot Rising Wedge Negative Divergence Setting Up

It is difficult to keep up with these fast moving markets with huge day to day and intraday point swings. This is with a VIX at 16; wait until it returns above 20 again. Here is an update of the 2-hour chart. The SPX resistance levels at 1943, 1951, 1958 and 1960-1961 (dark blue lines). The stock market was hinting at higher prices as was described with the long and strong indicators the other day. So what's the story now? It is almost soup, but not quite.

The red rising wedge and overbot stochastics are bearish indications. The red lines show the negative divergence in place for RSI, histogram, stochastics and money flow but money flow may peak higher and the RSI never reached overbot territory as yet. The MACD line is long and strong so it wants another price high after any pull back in this 2-hour candlestick time frame. Thus, if it takes 1 to 3 more candlesticks to form the top creating universal neggie d and the spank down, that is about 2 to 6 hours. So the near-term top should occur today or tomorrow morning.

A new moon occurs this evening and equities are usually weak moving through the new moon each month (about 65% of the time). The top will depend how quickly the MACD line rolls over to create neggie d. The inverted H&S remains in play with head at 1830 and neckline at 1895-ish targeting the strong 1960-1961 resistance level


The bulls receive a market buy signal with the BPSPX as previously highlighted. The bulls send the SPX above the 200 EMA on the 60-minute chart at 1937-1938 signaling bullish markets for the hours and days ahead. The financials remain important. Watch XLF 22.89. Market bulls win big if XLF stays above 22.89Bears win big and stop the market upside if XLF drops under 22.89. The XLF is printing at 22.91 as this is typed.


So watch the XLF 22.89 which would indicate that the near-term market top is in. Ditto the MACD line on the 2-hour. Once it negatively diverges the SPX will roll over to the downside. 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 1:08 PM: The SPX 50-day MA is 1966.82 a sturdy resistance ceiling. The SPX will go back up to 1980 plus if price takes out the 50-day to the upside. The 20-day MA is 1929.37 serving as support. XLF is 22.94 so the bulls keep punching the bears in the face.

Note Added 1:47 PM: The XLF comes down to back kiss the 22.89-22.91 area then launches to 22.98 now pushing the broad indexes higher. The bears are running for their lives. The MACD line continues higher on the 2-hour chart so the bears have to endure some additional pain. If price moves up through 1958 R, then the 1960-1961 is on tap and that would fulfill the inverted H&S pattern. With the XLF moving higher, the market bears got nothing.

BPSPX Bullish Percent Daily Chart Market Buy Signal

The bulls are crushing the bears hopes for further downside. The BPSPX reverses six percentage-points from the 40.8 bottom (above 46.8) to 48.60 which creates a market buy signal. The bears received the sell signal reversing six percentage-points off the top and then received the double whammy sell signal when price fell through 70%. That was a great confirmation signal that locked in the stock market selling, until now.

Since the bulls now have the market buy signal, the bears will have to reverse six percentage-points (48.60 down to 42.60 and lower) to regain the market sell signal. Bulls will receive huge strength and be heading for SPX 2000 again if the 70% level is taken out. 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.

Tuesday, October 21, 2014

SPX 60-Minute Chart 200 EMA Cross Inverted H&S Bull Flag Rising Wedge Negative Divergence Developing

The key SPX support and resistance is 1960-1961, 1958, 1951, 1942-1943 (62% Fib for the drop from 2019 to 1820), 1936-1937, 1928, 1924 and 1910. Price gapped-up today creating an island above 1910 and higher. The important moving average support gauntlet is at 1892-1913; this range engulfs the 200-day MA at 1907, 10-month MA at 1913, 12-month MA at 1898 and the 50-week MA at 1892. Price prints a HOD at 1942.45 testing the 1942-1943 resistance level.

The 200 EMA cross is a key VST indicator for market direction and the bulls dealt a fatal blow to bears today. The SPX moves above the 200 EMA on the 60-minute at 1937.68 signaling bullish markets for the hours and days ahead. This represents multiple nails in the bear's coffin. Since the 200 EMA cross occurs today, the bears have a chance on Wednesday, if they bring their 'A' game, to spank the SPX under 1938 and reclaim victory for the hours and days ahead. The bears have been in charge with price under the 200 EMA since late September until today. Watch 1937.68 since it tells you the path ahead.

The 62% Fib is 1942.88 (see previous chart). The HOD is 1942.45. How do you like those apples? You can see how the Fibonacci's matter. Tomorrow decides if price wants to poke up through the 62% Fib and move far higher, or, if the 62% Fib holds to allow the bears to growl again.

The brown lines show an inverted H&S in play with head at 1830, neck line at the strong 1897 S/R; this is 67 points difference that targets 1964. The 1960-1961 is very strong resistance so price may want to seek the 1960-1964 area to satisfy the inverted H&S. The neon blue lines show a bull flag pattern first leg 1820 to 1900-ish call that 80 points, then sideways to sideways lower consolidation, then the second leg begins from 1880 so 1960 is targeted by this pattern also. If 1830 is used as the starting point for the bull flag, a target of 1950 is calculated, call it the strong 1951 resistance. The purple lines show a rising wedge pattern which is bearish. The short red lines for the indicators show negative divergence that wants to see a spank down in price, however, the green lines show long and strong profiles for the MACD line and the RSI is squeezing out a tiny bit more juice, so price will want to come back up for another higher high after any pull back occurs in this one-hour time frame.

Therefore, universal neggie d should develop across all indicators in about 2 to 5 candlesticks which is 2 to 5 hours of time. This would equate to 2 or 3 of the 2-hour candlesticks (reference previous chart) and may or may not be quite enough time for the 2-hour chart to set up for the downside. Since the MACD line wants higher prices, and the SPX already printed near 1943 R, the bulls may be able to at least squeeze out 1951 R before topping, rolling over and reversing.

If equities begin running higher again on Wednesday the 1960-1961 level will likely become the target. Bears will be able to reexert themselves as long as price stays under 1943 (the 62% Fib)Above 1943, and the 62% Fib (for the 2019 to 1820 sell off) gives way, and price will target 1951 heading higher probably to the strong 1960-1961 resistance level.

Keybot the Quant is long and identifies XLF 22.90 (financials) as a major bull-bear line in the sand for Wednesday. The XLF begins at 22.87 only three pennies away causing bearishness. Thus, financials hold the key for the market path ahead. Like Caesar standing at the Colosseum, extending his arm and providing a thumbs up or thumbs down, to determine the fate of the gladiators, that is what financials will do on Wednesday. If XLF pivots above 22.90, the bulls will not look back. The party will be in full gear and the stock market will continue higher with a sustainable upside move ahead. The SPX will target 1951 then 1960-1961. If XLF stays under 22.90 and leaks lower a top is in for the stock market in the near term.

Thus, watch the SPX resistance levels at 1943, 1951 and 1960-1961. Watch the 200 EMA at 1937-1938. If price stays above 1937-1938, the bears will fold like a cheap suit. Watch XLF 22.90. Market bulls win big if XLF moves above 22.90. Bears win big and stop the market upside if XLF stays under 22.90. Listen for any bank news overnight that may impact the XLF when trading begins on Wednesday. The bulls severely crushed the bears today. 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 2-Hour Chart V-Bottom Recovery Rally

The bulls are running strongly higher with the Nasdaq printing the best day of the year. The bears have abandoned ship. Traders are chasing prices higher buying indiscriminately. The market V-bottom four days ago came with the green falling wedge and positive divergence in the stochastics and money flow, however, technically, more weakness was desired. However, as the Fed and other central bankers have done for nearly six years, the stock market is saved with Bullard proclaiming QE 4 is on the way which created the immediate bottom and sent stocks higher. A day later the BOE promises more easy money. China chimes in and is injecting the banks with liquidity. The BOJ is printing yen every day sending the dollar/yen and stocks higher. The ECB promises more easy money and doubles down today with news reports that the ECB will begin buying corporate bonds. It is an obscene orgy of central banker perversion that would make Caligula blush. The S&P 500 catapults from 1820 to 1938, 118 handles in four days; +6.5%. 

The brown dots show the band violations and then price had to check in at the middle band and finally after the bottom was printed, price returned to the middle band then upper band where it sits now. Price may run along the upper band the mirror image of running down the lower band a couple weeks ago but the middle band is now on the table (at 1885 and moving higher). The stochastics are overbot and cooked. They can bounce along at elevated levels, however, until the other indicators negatively diverge. With the last candlestick price high, the RSI is flat but hinting that it wants to remain long and strong and the histogram is negatively diverged. The MACD line is long and strong and so is the money flow wanting higher highs after any pull back with the 2-hour candlestick/s. So there are likely another 2 to 8 candlesticks before the top prints which is 4 to 16 hours taking trading through today, into tomorrow, and perhaps Thursday. Thursday is a new moon late in the afternoon and equities are typically weak moving through the new moon each month so perhaps a top prints tomorrow or Thursday; it would be perfect timing for the new moon where the week would finish weak.

The key S/R is 1960-1961, 1958, 1951, 1942-1943 (62% Fib), 1936-1937, 1928, 1924 and 1910. Note the gap up today to 1910 and higher. The important moving average support gauntlet is at 1891-1908 engulfing the 200-day MA, 10 and 12-month MA's and the 50-week MA. Price is now up to 1940 as this is typed therefore the 1942-1943 is the next upside resistance level. The RSI is long and strong and the histogram is starting to develop more juice.

Today is a phenomenal run higher for the broad indexes. Bears run for cover so the market jumps higher back to elevated levels with everyone back on the bull side of the boat. This is not healthy market behavior. Very oddly, the TRIN remains at 1.00 neutral although it did push higher, and lower, intraday. Price should keep moving higher until the chart prints negative divergence across all indicators so the 1942-1943 will likely print and it will be key to see if it can hold as a top, since it is also the 62% Fib shown on the previous chart, or not. HOD is 1942.45 printing minutes ago.

Bears will be able to reexert themselves as long as price stays under 1943 (the 62% Fib). Above 1943, and the 62% Fib gives way, and price will target 1951 heading higher probably to the strong 1960-1961 resistance level. 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 3:41 PM: The SPX poked up through 1936-1937 R (now support) so a test of 1942-1943 R should continue. Since price already took a poke at 1943 and the indicators on the 2-hour chart need more time to develop neggie d, price will likely move up through 1943 and target 1951 R. The only savior for bears would be very bad geopolitical news overnight. Comically, traders said earnings would matter this time around. Well they don't. Companies are reporting a mixed bag. KO, IBM and MCD are negative today. Overall, the top line revenue numbers remain lackluster across the board for the last couple years, however, ignore all this silly ole quant fundamental type analysis. The central banker orgy is all that matters and the CB's saved the markets again as described above. Grab your toga and join the party of perversion. Ignore the middle class and poor; they simply no longer matter. Rape the stock market with the Fed's easy money.

Note Added 3:51 PM: The SPX 1-hour chart is negatively diverged for the histogram, stochastics and ROC but the RSI and money flow is long and strong. This hints at a 2 to 5 candlestick time frame to create the top which is 2 to 5 hours of trading time. This would hint at a near-term market top tomorrow occurring at either 1943, 1951, 1958 or 1960-1961. You can gauge the further strength of the rally by noting how price reacts to the S/R levels. For now, the 1943 R is holding.

SPX Daily Chart Fibonacci Retracements Price is at 62% Fib

The chart shows the Fibonacci retracements for the move down from the 2019 top to the 1820 low. Price recovered to the 32% Fib at 1896, which represents the 50-week MA at 1891 and immensely important 12-month MA at 1895, and punched up through yesterday to create a move to the 50% Fib at 1920. Price dances here today exploding 16 points higher at the opening bell.

The important 200-day MA at 1906 and 10-month MA at 1908 and strong horizontal resistance at 1910 all fold like a cheap suit. The moving averages needed back tested but price simply blew up through a very bullish indication. Considering the importance of the moving averages, price should show more respect to the 1906-1910 range. If bulls can race above the 50% Fib the 62% Fib at 1943 would be in play. 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 9:47 AM: SPX punches up through the 50% Fib now printing above 1922 over 100 handles off the 1820 low only four days ago. Strong support is 1920 and 1910. Strong overhead resistance is 1923-1924, 1928 and 1936. Note the gap fill needed at 1927-1928 from seven days ago. Bullish traders receive fuel from the weaker yen overnight and the ECB promising more stimulus. The central bankers are the market. The market bottom four days ago was created by Fed's Bullard's happy talk about a potential QE 4. The Fed and other central bankers continue to create great wealth for those that own stocks while saying to H*ll with the middle class and poor; 'let them eat cake'.

Note Added 10:02 AM: HOD 1923.99. The line in the sand is drawn at the 1923-1924 resistance. Bulls win big above 1924. Bears can remain in the game if they keep price under 1923 and heading lower.

Note Added 10:47 AM: Bulls push up through 1924 R and fill the 1927-1928 gap now trying to chomp through the strong 1928 resistance. HOD 1927.72. The 20-day MA is 1932.81 and dropping and price would like to back test this moving average going forward. The bulls are not taking any prisoners today. Dip-buyers are flooding into the market and traders are worried that they will miss the recovery rally so orders rush into the market to buy at any price. Traders chase price higher. AAPL is up +2.2% at 101.97 but off the 103.15 high.

Note Added 11:37 AM: Shorts throw in the towel creating a huge short-covering rally. Equities are running vertical printing at the highs of the day. The SPX pushes up through the strong 1928 resistance, that now becomes support, and targets 1936 R next. The 20-day MA is 1933.01. HOD 1931.86. Markets are in a huge melt-up move today.

Note Added 11:41 AM: Here is the test of the 20-day at 1933. Equities are in a bullish frenzy.

Note Added 8:08 PM: The 62% Fib is 1942.88. The HOD is 1942.45. How do you like those apples? You can see how the Fibonacci's matter. Tomorrow decides if price wants to poke up through the 62% Fib and move far higher, or, if the 62% Fib holds to allow the bears to growl again.

Monday, October 20, 2014

Keybot the Quant Turns Bullish

Keystone's proprietary trading algorithm, Keybot the Quant, flips to the long side at SPX 1900 a few minutes after 2 PM EST today. As always, stay alert for a whipsaw. The bulls have energy since they overtook SPX 1895. Tuesday will be a battle of retail stocks which will determine if the bulls have legs, or not. Watch RTH 61.95, now at 61.82. If the bulls push RTH only 13 little pennies higher tomorrow the recovery rally will be in full steam with the SPX moving toward 1920. The bears need to hold the line at RTH 61.95 or they will fold like a cheap suit. Listen for any news concerning retail stocks overnight. More information is found at Keybot's site;

Keybot the Quant

SPX 30-Minute Chart 8/34 MA Cross Upward-Sloping Channel Potential Inverted H&S

A new week of trading begins with the bulls pushing the SPX, Nasdaq adn RUT higher but the poor IBM results keep the Dow Industrials Index negative. The 8 MA remains above the 34 MA bullish markets for the hours ahead. The 8 MA is 1887-ish so the bears need the SPX to print below 1887 moving lower to curl the 8 MA downwards and create a negative 8/34 cross. Bears got nothing until the receive the negative 8/34 crossThe indicators on the 2-hour chart such as MACD line, histogram and stochastics are pointing to more upside for price. Price hints at a lot of sideways movement.

The blue channel is in play with price back kissing the lower rail. The brown lines show a potential inverted H&S with head at 1820 and neck line at 1898 targeting 1976 if the 1898 gives way to the upside. There is a big fight ongoing for price between 1891 and 1908.

Keystone's critically important SPX 12-month MA cross signal, the cliff, which tells you if markets are in a cyclical bull or cyclical bear is in play. The 12-month MA is 1895-ish signaling a cyclical bear market for the months or more ahead but this could change in a heartbeat if the bulls can push higher. If the SPX overtakes 1895, then 1900 plus is coming quickly and the bulls will extend the relief rally for price to attack the 200-day MA at 1906 and 10-month MA at 1908The 1895 level is a very big deal. It looks like price may want to poke up through and it would not be unreasonable to see a several-day fight between 1888-1908 since this is the key moving average cluster. The 50-week MA is 1891. The key S/R is 1928, 1924, 1910, 1897, 1889-1891, 1884, 1878, 1872-1874, 1848, 1841, 1828-1831 and 1808. Price is teasing the 1889-1891 area now. The 1891 would lead to a test of 1895 then 1897-1898.

Keybot the Quant remains short and is tracking UTIL 559.53 and SPX 1895 as key market directional signals. Utilities explode higher creating bull juice in the stock market. If the SPX moves above 1895 a test of 1897-1898 is next and Keybot may flip long above 1898. 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 10:36 AM: The SPX HOD is 1894.73. The 12-month MA is 1894.69. Price overtook the 1891 resistance which is the 50-week MA at 1891 that now becomes support and price will want to back test. The price action is the same as Friday. The SPX is fighting at the 50-week and 12-month MA's. The 1895 is immensely important and with price at 1892, the stock market is in a cyclical bear market for the weeks and months ahead. Bulls need three SPX points to reverse this dire forecast otherwise they will receive daily beatings going forward.

Note Added 10:45 AM:  Bulls are pushing hard attacking 1895 resistance again. Now above 1895 by a few pennies......... 1895.03 ... spank down .. 1894.51... the drama continues......

Note Added 10:38 PM: The bulls slap the bears in the face today sending the SPX above the 12-month MA at 1895 and equities into a cyclical bull pattern. The rally gains steam due to the strength in utility stocks. Keybot the Quant flips long at SPX 1900. The SPX stops short of the 200-day MA at 1906 and 10-month MA at 1908. As mentioned over the last few days, these critical moving averages need back tested so it may as well be now. Since critical horizontal price resistance is at 1910, a strong resistance gauntlet is formed at 1906-1910. Bulls win big above 1910. Bears win big if the SPX remains under 1906. The 8 MA remains above the 34 MA for the 30-minute chart above signaling bullish markets for the hours ahead. The 30-minute chart shows a long and strong RSI and money flow so another higher high in price is desired. The SPX 1-hour and 2-hour charts show long and strong indicators with no real threat of negative divergence as yet so the SPX may float higher all through the Tuesday session (several hours forward). It appears the bulls have running room and would be expected to test the 1906-1910 resistance gauntlet. The charts hint at a push up through the gauntlet. Bears will receive help if retail stocks are weak tomorrow and more importantly from any negative news concerning global events, wars, Ebola, all that drama. If the world is quiet, the bulls should be able to run higher up through the 1906-1910 resistance gauntlet. The 1906-1910 battleground will decide the fate of both bulls and bears on Tuesday.