The SPX 2-hour chart is topping out again. Each time the stock market tops out, President Trump or the Fed or other central bankers step in to pump stocks higher. The happy talk with the US-China trade deal pumps equities higher today. A government shutdown is also averted and King Trump decrees an emergency to fund the southern border wall with Mexico. Stocks rally but the chart says down.
Remember, the CPC and CPCE put/calls, and elevated NYMO, have yet to reconcile so stocks need to sell off significantly to shake out this ongoing euphoric joy in markets. Aunt Harriet took her life saving to the broker and told him to buy the market on the long side; she wants to own tech stocks. The neighbor, Carl, who drinks a lot of beer, told her she is missing the train leaving the station. He invested his life savings in Amazon yesterday.
The RSI and stochastics are coming off the overbot levels agreeable to selling. The rising wedge is a bearish pattern. The indicators are all in negative divergence (red lines) wanting to see a smack down in price. The upper standard deviation band was violated so the middle band at 2744 is on the table as well as the lower band at 2704.
The SPX daily chart needed to set up with neggie d to identify a sturdy near-term top, which it did, but again, the trade deal joy pushes stocks higher. The SPX daily chart is in neggie d except for the MACD line so watch that closely. Do not be surprised if stocks sell off this afternoon into the closing bell to end the week. This may allow the MACD line on the daily chart to register neggie d.
In other words, a significant near-term top is likely at hand right now. Get shorty. 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 3:00 PM EST: Minutes ago, the SPX prints 2771 at the intraday highs of the day at the 2772 palindrome. The stock market bulls are drunk as skunks from Trump champagne and Fed wine. Investors are partying like its 1999, before the closing bell, which may be a big mistake. Traders are care-free since the SPX is up a big 25 points. A trader yells, "Par-tay" as he buys six big blocks at the ask. Another trader is wearing a lampshade on his fat head celebrating daily stock gains that he says will never end.
Note Added 3:09 PM EST: The SPX is at 2771. The bulls are laughing and singing songs. The band plays on. The Fed booze and Trump Vodka is flowing like water.
Note Added 3:12 PM EST: Whooopsies, daisies. A wee bit of slippage with the SPX to 2768. One of the drunks on the trading floor falls down but laughs heartily, crawls to his knees and hand signals a buy of 5 more contracts at the ask.
Note Added 3:18 PM EST: SPX 2767.
Note Added 3:25 PM EST: The SPX is at 2768. Freddy Fafooshnik, floor manager at Shyster and Son brokerage, is stumbling around with a wine glass in his hand telling young traders to go ahead and buy since stocks will keep going up.
Note Added 3:43 PM EST: The SPX is at the 2772 palindrome HOD. Traders are singing, "Happy Days Are Here Again." They sing "For He's a Jolly-Good Fellow" to King Trump and Emperor Powell praising these money God's that can make stocks go higher by simply turning their thumbs skyward. The TICK machine is only at +400. It pegged +1200 at the opening bell and +800 about a half-hour ago when the high in the SPX was printed; now another high on less enthusiasm. The VIX is down to 14.81. They are jamming volatility lower to print a nice finish for the bulls today. The SPX gains 28 points to 2774 the HOD.
Note Added 3:47 PM EST: Jam it baby. VIX 14.79 LOD. SPX 2775 HOD. They want the happy finish for the weekend. Monday is a holiday, President's Day, so the stock market is closed which explains the buoyancy today. Equities usually trend higher before a three-day holiday weekend. Traders can also thank the president for the rally in front of President's Day.
Note Added 4:20 PM EST: The S&P 500 ends the session and week with a big 30-point rally, +1.1%, to 2776 at the HOD. The VIX ends at 14.99 off the LOD at 14.79.