Yellen Retreats, BOJ Eases, Stock Market Squeezes

In the market Friday, there was a monster short squeeze as Japan's central bank took a big step in the easing direction to the surprise of the entire planet.  While it smacks of desperation, it was absolutely necessary that it be done as the world's alliance of central banks continue to take turns in the joint effort to keep the global stock markets propped up, especially the US stock market.  

Many investors wonder just when the central banks know unequivocally that they must execute an intervention.  If you follow all the key moving averages on the SPY and NASDAQ you can see that some moving averages have down crossed and some have bounced without a consistent pattern lending to the argument that you cannot predict when a central bank market intervention is imminent. This belief is simply not true.  Market interventions are actually timed off a key pair of moving averages on the NASDAQ 100 ETF, the QQQ.  The QQQ is the designated market manipulation workhorse.  These two QQQ moving averages are shown in the charts below.

The top is a two year chart showing the key moving averages in daily bars and the bottom shows the equivalent of these two moving averages in weekly bars so a long term view can be seen.  Notice that in 2008 the smaller red moving average down crossed through the larger green moving average and the stock market collapsed.  In mid 2009 the red line up crossed through the green and the game was on once again.  Looking at the lower weekly chart, you see that every time the market was in trouble bringing the red line to the green for a possible down cross and sudden game over there was a central bank intervention either directly or verbally to stop the down cross.  

Looking at the top chart where we can focus in on the last time the two moving averages merged in October, we once again had a central bank intervention to prevent the down cross.  Two days ago, the two lines merged once again on Fed speak day putting the world's central banks on high alert that an immediate intervention was necessary.  First Yellen retreated on her hawkish rhetoric, then Japan's central bank did a shock and awe easing early Friday and then the mighty short squeeze engine was turned on and was very effective as Fridays are always thinly traded and easily manipulated.  The result was a monstrous short squeeze.  

If you look at the top chart closely it is easy to see that if we had not had an intervention Friday that the QQQ would likely have had its first down cross in the entire seven and a half year bull market, the game over down cross.  I must say they do like to wait until they can see the whites of the bear's eyes.

This is a big gift for the bulls but they must step up and buy big on Monday and Tuesday to produce follow through.  If they don't and we have a big down day Monday, the tip of the red line could still turn and begin a down cross.  The odds are in the bulls favor as historically when the first trading day of a new month falls on a Monday there is virtually always a rally.

Trade well my friends

Alan

Comparing the SPY, USO, VXX, & TLT Channel Charts

With most of the leader stocks either breaking down or trading erratically, many traders and investors are focusing on the big four ETFs which are the SPY, USO, VXX, and TLT.  I have posted the one-year charts of each of these four below.

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Looking first at the SPY, we see that after the bounce from the neckline of its two-year wide dome top and breaking out of its three-week declining channel (shown in pink) it has just been chopping sideways the past week at the blue line support level coming across from the late September low. The SPY is also trying to declare the green channel as its new dominant channel.  It is a declining channel also, but it's better than the steep nosedive channel it just broke out of.  

Below the SPY, I have the VXX (short term VIX futures ETF) where it peaked at the upper line of the blue channel at the same time the SPY bottomed at its neckline.  A few days ago, the VXX fell out of its three-week rising channel as the SPY broke out of its three-week declining channel.  The VXX is also chopping sideways just above the support of the center line of its blue channel.  Herein lies the problem, the SPY and the VIX should not both be sitting on support.  If the VXX is sitting on a support line then the SPY should be up against resistance since they trade inversely.  This deviation from their normally opposing relationship is because the SPY is being vigorously propped up this week and anytime it is being manipulated it gets out of sync with its inverse relationship with the VXX.

Next, looking at the USO (US oil fund ETF) we see that it is breaking out to move higher but looking below it at the TLT (20-year bond ETF) it is also set up to move higher.  Here again is the same problem as above, they have been trading inversely but they are both set up to go higher together now.  The TLT is too big to manipulate by anyone but the USO isn't too big and it is currently under verbal manipulation by countries around the world as everyone that is getting decimated by falling oil is announcing that they may talk about cutting production to see if they can get a short squeeze going without actually having to cut back on their production.

Lastly, the TLT continues to work its way higher after recently breaking out of its one-year declining channel.  The TLT is increasingly becoming the favored spot for equity cash-out money as it continues to climb distancing itself from its previous one-year declining channel.

Trade well my friends

Alan

Examining Three Slices of AAPL

In the market Tuesday, the usual float up program was running which always drifts the market up the day prior to Fed speak.  The program got a little extra kick from oil being up on some Middle East comments but the $CL_F oil futures took a hard hit after the market closed when the API oil inventory numbers were released that showed a huge inventory build the past week.  

The real story tonight of course, is AAPL's earnings.   After the announcement, it took the standard whipsaw both directions as traders balanced the positive against the negative in the report and the consensus ended up taking AAPL two percent lower after hours as shown in the first chart below.

Next we take a look at the one-week chart with five-minute bars, shown just below, where we see that AAPL has actually been downtrending these past two days leading into its earnings announcement.

Lastly, taking a look at the longterm chart of AAPL, we see that it actually has been holding at a minor trendline the past few weeks waiting on earnings to determine if it will continue going lower and fulfill the projected drop from its recent head and shoulders top.  

If the after hours activity holds true as an indicator, AAPL is more likely to resume its downtrend now but don't forget that it's Wall Street's darling and they will be defending it vigorously on Wednesday if the decline resumes.

Trade well my friends

Alan

Market Wants Yellen to Back Off Hawkish Stance

In the market Monday the short squeeze on oil waned as all the quick to cover shorts did so but the big shorts said no thanks.  Market volume dried up as buyers went on strike waiting to see if Yellen really does stick to her previous communication of four interest rate hikes in 2016 or instead acknowledges that the market is about to be devoured by the bears if she doesn't back off to a one and done statement.  

The following quote has been around the internet but if you haven't seen it here it is:

"What the Fed did, and I was part of it, was front load an enormous market rally in order to create a wealth effect...and an uncomfortable digestive period is likely now." - former Dallas Federal Reserve Governor Richard Fisher - January 5, 2016.  

Looking at the charts below, we see that on Monday the indices gave back the gains from Friday's short squeeze as traders saw that the oil short squeeze is over and realized that the market now desperately needs a rescue from the Fed.

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Trade well my friends

Alan

Examining the Longterm VIX Channels

Taking a look at the twelve year chart of the VIX Volatility Index, the channel to watch now is clearly the red channel.  The VIX spike all the way across this red channel occurred during the last week of August where we saw the Dow open negative 1200.  This red channel is a dangerous place to be but it continues to act as a magnet pulling the VIX into it.

Click on image to enlarge

At the market low this past week, you can see that the VIX briefly entered into the red channel but quickly reversed back below it escaping a bullet for now.  Looking closely, you can see that the pink ascension channel that took the VIX up still contains the VIX and everyone will be watching to see what happens when it gets back to the lower line of this rising pink channel.

Trade well my friends

Alan

S&P Dome Top Continues to Form

If the newly started short squeeze continues higher for the almost obligatory S&P 2000 backtest (everyone was wondering if this simply wasn't going to happen but it looks like it may now), the technicians around the globe will have a smile on their faces if they see that the huge dome top that is 80% built continues to completion.  The dome is the king of all topping formations and this one may end up stretching 2.5 years wide with almost perfect shape.  When the 2017 stock market text books are published this top will very likely be an absolute must as you will be hard pressed to find a more beautiful price pattern throughout market history looking at it solely from a technical perspective.  

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Looking at the S&P through the lens of the SPY in the chart above, it's easy to see how we could have 1-3 additional make or break tests of the neckline before the dome completes its right side.  No one knows how it will play out but if  if the pattern continues to develop with the technical purity it has so far the price action I have sketched in is certainly plausible.

Trade well my friends

Alan

Did A Stealth Bank Bailout Begin Today?

They did indeed buy up the S&P futures during the overnight session, holding them up for a gap open and then squeezed hard on the shorts in the afternoon.  It all looks very impressive but is the real story what is going on behind the scenes?  A couple of days ago, the source that first leaked Lehman Bros was in big trouble in 2008 revealed that the Fed governors are discussing allowing the big Wall Street firms to go off of mark to mark accounting rules on their energy portfolios.  It has caused quite a stir on the internet as it was specifically mentioned that one firm is in deep trouble on their energy loans.  It is easy to see how this is possible when you consider that one third of the approximately 600 oil and gas companies have lost ninety percent of their value in the past year and the other two thirds have lost 25 to 50 percent on average.  Everyone knows the Fed cannot do another big bank bailout.  Interestingly enough, the following day a mysterious buyer showed up in the oil futures and most don't think it's hard to guess just who it is.  It appears that instead of doing a direct bank bailout they realized it would be easier to just drive up oil futures which would improve the oil companies balance sheets quickly and have the bonus side affect of squeezing the stock market as the reason the stock market is trading in lockstep with the price of oil is that too many people are aware that looming oil company bankruptcies could bring down one or more of the big banks.  The Fed couldn't care less about the oil companies but they sure don't want financial crisis number two to begin.  

Is this just a week or so squeeze on oil (& the stock market) that's coming or are they going to keep the pressure on the oil shorts until the price of oil is high enough that the big oil firms can become profitable again?

Click on image to enlarge

Trade well my friends

Alan

Is The Last 'Levy' Going To Hold For SPX, SPY, NASDAQ? Part 2

In the market Thursday, they rallied the wagons to keep from losing the two year necklines on the indices and they popped the SPX, SPY, and NASDAQ higher midday but gave most of it back by the bell.  Are we supposed to consider this a breakout?  Looking closely at the SPY and NASDAQ, Thursday's closing prices are within one point of Wednesday's close (shown in my previous article).  The indices essentially moved themselves out of a downhill channel by going sideways which had to happen because the charts moved sideways with the opening of a new bar where they went ahead and forced a pop but the market just didn't buy it.  Overall, this was a lame attempt to trigger a breakout to save the neckline.

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The Advance Decline and Tick turned quite bearish in the last two hours, however, they will probably run the overnight futures higher Thursday night and come in during premarket with the same routine but I really can't see any signs that traders/investors are buying into any of it.  Granted tomorrow is Friday and that used to mean float up Friday on thin volume with a ramp up into the close but whether or not they can make it happen this time we will have to see.  Considering the obvious lack of buyers here and index propping going on to a level we rarely see, this might be a historical battle in the charts when looking back on it later.

Trade well my friends

Alan

Is the Last Levy Going to Hold?

In the market Wednesday, the S&P 500, SPY, and NASDAQ had a nasty early morning but climbed most of the way back up in the late afternoon.  The low of the day tagged the lower line of the three week declining channels on these indices and closed Wednesday at the top line of the three week declining channels as shown in the three 195 minute bar charts in the upper half of the cluster below.

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Looking at the lower weekly bar charts, we can see that this morning's low was a bounce from the neckline of the huge Dome topping formation on the S&P and SPY and the neckline of the double top on the NASDAQ.  These two year red necklines can also be seen in the 195 minute charts at the top.

Everything had looked good through the day when traders saw that the necklines held.  There was disappointment at the close however, as the three indices failed to breakout of their declining channels and sold back down in the last hour.  Note, however,  that the SPY climbed back up to the line but that did not happen until after the bell as the 195 minute bars pick up after hours activity also.  That after hours activity has the bulls excited because as soon as the SPY closed it was driven a couple of dollars higher in the thinly traded after hours session and the early overnight futures trading followed suit.

While the day was a failed breakout of the three week declining channels, it looks like the powers that be are determined that this one has to hold and also break out at all costs because if it doesn't then the last levy, the two year necklines, that's holding back a tidal wave of sellers could give way and a 2008 style flush would likely be upon us.

Trade well my friends

Alan

Are the VIX & Equity Put / Call Ratio Indicating a Bounce Is Here?

This is the third article of three focused on determining if a bounce in equities is imminent.  Looking at the two charts below, the top chart is the VIX Volatility Index which shows that on Friday it printed a shooting star candle right at the upper line of its three month rising channel implying a short term top in the VIX.

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Looking at the lower chart above, the equities Put / Call Ratio, we see that it closed at 1.37 on Friday which is an elevated number that is not sustainable and historically pulls down quickly.  Friday's closing was right at its longterm upper channel line also implying the bloodbath in selling may have reached its peak.

Trade well my friends

Alan

Is the QQQ Telling Us a Big Bounce Is Imminent?

The fact that we have now entered a bear market is old news, the game now is to figure out when they are going to force the first big short squeeze that morphs into a multiday bounce.  It's likely to take off like a bottle rocket when it happens and it's key to catch the very beginning, especially playing options.  There has been a lot written the past few days about the breadth indicators such as percent of stocks above their 50 day MAs and percent of stocks above their 200 day MAs and the McClellan oscillator having reached extremely low numbers deep into the buy zone and many approaching all time low readings which increases the possibility for a short squeeze as fresh shorts continue to pile on to the stock market in droves.  One less discussed chart lately has been the QQQ (Nasdaq 100 ETF) that essentially drives the Nasdaq Index.  Taking a look at its chart below we see that it also closed Friday at a very important support level, arguably even more critical than the S&P 500 support level I focused on in my previous article.  

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Having both indices at such critical support levels makes it a potentially volatile pivot.  If the powers that be can start it moving upward quickly on Monday or do their Sunday night futures ramp, then keep the momentum, we could have a classic rip your face off short squeeze.  If the level is lost on Monday, a thousand point one day drop in the Dow is also conceivable.

Knowing how much is at stake here it seems as though they almost have to bounce it here because if they don't then the damage that will be done to the S&P and Nasdaq charts could trigger selling that makes last week's sell off look like a cake walk.  I can't imagine that they would wait and try to rescue the market after a major second blow when they have the opportunity to step in at this point.  The technical necessity of a bounce here makes me believe that it may actually happen.  If they are relentless on the squeeze we could have a week of up travel out of it.  However, in the longterm I believe the market is going much lower as the reality sinks in to investors that the constant week to week and month to month bid under the market the past few years is no longer there.  

Trade well my friends

Alan

Is the IPATH Crude Oil Index Telling Us Something?

In the market Friday oil tanked and took the stock market with it leaving the S&P 500 closing at the August and September lows which is the S&P's first critical support level after losing its primary channels.   

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The big question is when will oil take a sustainable bounce for multiple days?  One chart that is actually looking quite bullish for oil at this level is the IPATH Crude Oil Index: OIL (shown in the lower chart above).  Over the past week, the OIL has been building a base out of pops and drops but nonetheless, when you look at it from far enough away it is indeed a base and it's at its lower channel line.  There was heavy call buying in the OIL Friday also, with the OIL ECN ramping up in the late afternoon.  Is this particular oil chart what the powers that be are keying off of to plan a market  bounce?

Trade well my friends

Alan

Oil Short Squeeze Triggers Stock Market Short Squeeze

In the market Thursday we had a big short squeeze in oil with a corresponding squeeze in stocks as most of the the trading algos are keying directly off oil futures right now.  It started early on and to give the squeeze a little more kick they sent out Fed hawk Bullard to make some dovish comments.  Is this a second try to make an S&P 2000 backtest run or did they just throw the breaks on the downtrending market long enough to clear off some of the short interest and we simply resume the downtrend tomorrow?  

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Looking at the two sixty minute bar charts above, we can see that today's monster squeeze did not break the S&P nor the NASDAQ out of its recently steepened downtrending channel.  Everyone will be watching to see if they can put two up days together, or even better, three.  We will see...

Trade well my friends

Alan

Bulls Bail, Market Craters

What can you say?  The bulls were served up a great setup (detailed in my previous post) for a run back up to S&P 2000, they bought in, held one day, then quickly bailed.  I really hope they are not waiting for a better setup because this was a gift and they didn't trust it.  

Looking at the charts below, we can see that the S&P's must hold 1900 level didn't.

As for the Nasdaq, it closed right at its must hold level Wednesday.  Barring a divine intervention by that mysterious S&P Futures buyer, the path of least resistance is downward and may continue to be for a long time with occasional short but furious short squeeze bounces thrown in.  

Trade well my friends

Alan

The Bulls' Moment is Here

In the market Monday, we had a very tightly controlled decline that was part of an often used strategy to reverse market sell offs.  From the beginning of the day, on a Monday, the market is allowed to sell lower and continue to decline until about halfway through the third 120 minute candle which is where that mysterious force we all know well hits the Index ETFs and the futures like a hurricane and drives them up to convert the third 120 minute candle into a reversal hammer.  

By doing this on a Monday, this also changes the weekly candle to a hammer since that day's trading is the only trading for the week and it also changes the daily candle to a reversal hammer as the third 120 minute bar closes.  When the fourth 120 minute bar opens at 3:30 pm it actually only lasts thirty minutes and during that last half hour the intraday only shorts cover causing that bar to go green into the close preserving the hammer reversal candle on the week, day, and third 120 minute bar.  This is a technique used often through the Bernanke years and has become a fixture during Yellen's reign too.  With just thirty minutes of intense buying of the Index ETFs and the futures, anytime between 1:30 and 3:30 pm EST, they can produce triple reversal hammers which the bulls dream about, especially when they happen at a lower channel line which is exactly where it happened Monday.  

The week, day, and 120 candles for the S&P are directly to the right of its channel chart and accordingly on the lower Nasdaq chart.  

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This is it bulls, the friendly force that has been at your back for years now has carefully crafted one of the best setups possible for a multi day bounce.  It's not going to happen by itself, the bulls will have to put their money where their mouth is right here and now or they will have missed a golden opportunity to at least back test S&P 2000.

Trade well my friends

Alan

The Universal Bull / Bear Line

Anyone even slightly versed on the stock market or trying to actively manage their own portfolio is well aware that the 200 day SMA is where institutional investment firms enter or exit stocks as they consider this to be the bull / bear dividing line.  When an index or stock is below the line it is considered to be in a bear market and when it is above the line in a bull market.  The problem is that looking at a 200 SMA on the daily bars chart it's difficult to get a feel for the big picture.  The easy way to see the big picture when looking at a stock and its daily 200 SMA is to look at the 9 SMA on the monthly bars chart instead.  This is almost precisely the same line as the daily 200 SMA but it lets you see a much bigger picture in the same size chart.  The two clusters of charts below are of the stock indices and the most popular stocks among investors.

 Click on images to enlarge

Looking at the first row of the top cluster, we see that when the new monthly bar opened five days ago it was exactly at the 9 month SMA line on the NASDAQ, S&P, DOW, SPY, and QQQ.  As soon as the markets took one tick downward the bear market began for all these indices.  It's that simple.  The results for the end of the first week show how disastrous the first few days are when a symbol changes to the lower side of the line, bear market territory.  

Big money is made in the first few days when an index or stock first enters bull market or bear market territory.  Besides the stock indices making their first move into bear market territory this week, other notables are PCLN, BAC, BIDU, UAL, and BA.

Ones to watch for the coming week that are beginning to cross the line are TLT, VXX, & GLD which are all beginning the cross to the upside accordingly as the stock  market indices have already crossed to the underside.  Also, watch NFLX, SCTY, SBUX, and V as they are straddling the line on Friday's close.  Worth noting too is that the  $NYA and GS, the two leading indicator symbols for long term market direction, have been in a bear market for nearly six months already.

Trade well my friends

Alan 

...Earth to Fed...Anytime Now

Well, we're here...the technical point of no return.  

1943 was Thursday's closing tick, if a hard test happens we might see the 1930 to 1940 area so that our fine feathered friends on Wall Street can take out all the stops and then rocket it back up. 

Nonetheless, we are essentially there, the point where the Fed will soon wish they had stepped in if they don't at this level.  Granted, these are monthly bars and we could go sideways at the 1940 area for the rest of January and all through February and not rally nor lose the two channels.  The price level is what is key.

Will that mysterious buyer with incredibly deep pockets start coming in and buying the S&P Futures again in the overnight sessions for as many nights as it takes to make sure this level holds?

Trade well my friends

Alan

How Far Can An AAPL Fall From the Tree?

As AAPL approaches the mighty $100 benchmark, the question of the week is will the big Wall Street firms pony up and keep their darling from becoming a two digit stock or will the powerful message in the two charts below rule AAPL's midterm future?

In the top chart, I posted the two primary EMAs that AAPL has used to climb with for years on its weekly chart.  By looking at it you can see that each time the smaller red EMA line bounces up from the larger green EMA line AAPL gets a minimum of six to nine months of upward travel from it. Looking across this seven year chart of weekly bars you can see that the six to nine months off this line to line bounce is always the move that's achieved.  

Six weeks ago, however, AAPL started an inverted interaction where the green line was pushing the red line downward for the first time in AAPL's history.  This particular setup is actually of higher quality than the upward pointing counterparts that I marked with green in the chart as it has a more rounded cup shape to the red line's interaction.  Six to nine months of downward travel is a given and possibly more considering the high quality of this "push down" setup.  

Looking at the bottom chart which has APPL's two long term primary channels drawn, I have marked in with blue lines the giant head and shoulders topping pattern that has been the buzz of the trading community for the past week as AAPL broke down through its neckline Monday morning and it's not just a regular neckline, this line is also the upper channel line of AAPL's mother channel going way back.

The obvious downside target now is the 82 area where AAPL will catch the support of the lower line of its uphill seven year bull channel.  The question is will Wall Street come in now, as it is at the even 100 mark which is such a benchmark number to be above or below, and defend their darling aggressively as it is the largest holding of most all the Wall Street firms.  

Considering that there are two very powerful forces pushing AAPL downward at the key 100 mark, one has to wonder just how far AAPL can fall from the tree?

Trade well my friends

Alan

NYSE: The Eeriest Chart of All

The similarities of the previous bull market run and the current one have been documented many times on all the indexes but I would like to focus on the $NYA, representing all of the stocks traded on the New York Stock Exchange.  The upper chart shows the red uptrend line of the current bull market and the lower chart shows the red uptrend line of the previous bull market.

I have plotted six points at the end of both bull markets.  The similarities between the two is truly remarkable.  However, the current bull market had the eight months of gratuitous market propping that every professional trader is well aware of (shown with the pink square).  If you clip that eight month period out and reconnect the trading bars, points 1-7 of the previous bull market and points 1-7 of the current bull market, they show to be almost perfectly identical.  

Just something to think about...

Trade well my friends

Alan

SPY Closes at Major Resistance

With Tuesday's close the SPY got right up to the two channel lines (shown in red and blue) that will be the first big test of whether the "buy the dip forever" game is over.  The market has been in sideways lockdown mode for two days with a slight move higher on Tuesday's close with everyone waiting to see if SPY breaks up or breaks down.  Tuesday's close didn't give any clue if the SPY would be able to deal with these two channel lines.  

However, as I am writing this article (Tuesday 9:30 pm CST US) the S&P Futures are tanking, currently down 20.  Will the mysterious buyer that comes in and buys up the thinly traded S&P Futures in the wee hours of the morning every time the market is in trouble step in or is the Fed about to turn a cold shoulder to investors? 

Trade well my friends

Alan

QQQ Has Less Support Than SPY

The QQQ Nasdaq 100 ETF only has one channel support line below it and three channel resistance lines above it.

The QQQ's opening tick was right at the support of its four month pink downhill channel.  Just above Monday's close are the six year orange channel line, the one year green channel line and the six month blue channel line.  All three of these will be tested to see if they are firm resistance or simply hurdles that will actually accelerate the QQQ higher if it gets across them.

Trade well my friends

Alan

Navigating SPY's Channel Maze

After Monday's big gap down in the market everyone will be looking to see if a tradeable bounce begins now.  The SPY is a complex maze having a number of secondary channels.

Monday's gap down open gained the support of two channels with the opening tick, the large horizontal green channel and the recent downhill pink channel.  These two channel lines of support look to have given a bullish trading opportunity but the problem is that just above Monday's close there are two lines that will serve as resistance until broken through, the eight month declining blue channel and the steep uphill red recovery channel.  With Monday's unusually heavy volume for a gap down open there were no doubt a number of traders that bought the SPY but will be watching closely when the SPY reaches the red and blue channel lines to see if they become resistance when tagged.

Trade well my friends

Alan

AAPL Rejected by 100 Week MA

AAPL reached a pivotal point a week ago when it got down to its 100 week SMA shown with the brown line in the first chart of the bottom row, its weekly bars chart.

However, APPL will soon have support of its 38% Fibonacci level measuring off of its 2013 Summer low up to its peak (shown in chart 3).

The support level in the top chart that was lost on Friday was a fairly important one from December 2014.  The mixture of these could produce volatile trading in AAPL.

Trade well my friends

Alan

NASDAQ Could Test 150 & 200 MAs Monday

If Friday's selling in the NASDAQ follows through on Monday it could reach a volatile price level quickly.  It has the unique situation of having its 150 SMA and 200 SMA pressed together which could be big support if it holds but a downside accelerator if it is lost (shown in chart 2 of bottom row).  

Chart 3 and chart 4 of the bottom row show that long term and midterm Fibonacci levels are way out of reach for the time being.  

Looking at the top chart, we see that the NASDAQ also is not likely to reach a horizontal support nor resistance level on Monday.  

Trade well my friends

Alan

S&P Rejected By 50 Week MA

The final week of trading for the S&P disappointed many as it popped topside of its 50 week SMA but lost it by the end of the week (shown in the bottom left chart).

Friday's open was right at its 200 day SMA which shows to be firm resistance and took the S&P down through its 20 and 150 day MAs by the close (shown in the second chart of the bottom row).  Charts 3 & 4 of the bottom row show that the Fibonacci retracement levels are not in play yet.  

Looking at the large upper chart, the prominent support and resistance levels show that Monday will have to be a volatile day for it to impact a support line or resistance line.

Trade well my friends

Alan

Checking VIX for First 5 Trading Days Insight

After having a look at the yearly candles we next need to check the VIX for clues as to how much resistance Wall Street will have in executing its first 5 trading days of the new year pump routine.

click on image to enlarge

In the left Daily chart I have posted two very large EMAs that have triggered large moves in the VIX anytime they interact whether it is a simple line cross or the smaller red line being pushed up or down by the larger green line.  Friday's sell off was a line bounce that triggered hard selling late in the day.

The chart on the right shows that Friday's sell off took the VIX back up into its three month uphill red channel that triggers stock selling every time it enters it.  Right now the VIX is set up to have a negative effect on the first five trading days of the new year.  However, keep in mind that the "mysterious buyer" lol, that likes to come in during the wee hours of the morning and buy S&P Futures really likes to do it on a Monday to get the new week off to a good start.  We will have to see.

Trade well my friends

Alan

Scanning the Yearly Candles

With the new year beginning it is now time to take a look at how the 2015 yearly candles closed.

The first two columns are of the primary Indices, third and fourth columns are the big name stocks, and the last column are the two bond and a gold indices.  The stock indices and big name stocks printed some less than desirable yearly candles looking forward.  

Trade well my friends

Alan