SPX Monthly Chart; Obverbot; Rising Wedge; Negative Divergence Developing; Upper Band Violation; Price Extended

The SPX monthly chart above is a bowl of spaghetti. Note the universal negative divergence across all indicators over the last four years (red lines) which are calling a multi-year top on the come. The dark red lines show the May 2015 market top spanked down by the universal neggie d. The Fed and other central bankers saved the day in February 2016, as usual, and then President Trump's November election kicked stocks into overdrive with traders drooling over promises of lower taxes, less regulation and massive infrastructure spending. The ECB's QE has been a key driver in the buoyant stock market but the central bank is reducing its monthly asset purchases from this month into April.

So stocks float higher after the May 2015 major top fueled by central banker easy money and Trump hype. The red lines are universal neggie d wanting a multi-year top to print at anytime but note the very near term. The Trump bump creates short-term momentum as shown by the short green lines that indicate long and strong RSI, MACD line and money flow. This will likely create a couple jog moves in price until these indicators can print neggie d in the very short term to match the neggie that remains in place over the last four years. As long as the RSI and MACD lines stay below the purple line shown in the right margin, the bears will have their multi-year top at some point in the near future (probably within 16 weeks). Above those lines and the multi-year top would be likely occur in October-ish instead. The chart will simply have to be monitored as it develops.

The month of March began at 2364. The SPX is at 2378, up 14 points this month, +0.6%. The month ends on Friday 3/31 which is 10 trading days away where the chart will receive an official print for March and a candlestick for April will begin. The S&P 500 is currently  up for five months in a row gapping-up on the Trump joy each month since November.

The RSI and stochastics are overbot wanting to pull back and take a rest. Price is extended above the 10-month moving average above the 20-mth MA above the 50 MA above the 100 above the 200 so the SPX needs a mean reversion lower. Price tags the upper standard deviation line at 2374 sitting firmly above at 2378. The S&P 500 will need to move lower to touch the middle band at 2119 and rising, and the lower band at 1864 is on the table as well for the weeks and months to come.

The pink box shows that the upside multi-year rally was a strong trend in late 2013, 2014, 2015 but then petered out in 2016. The ADX is down at 16 so the move higher in the stock market, at or near record highs, is occurring but not with a strong trend anymore. The rising wedge over the last two years and the long-term rising wedge since 2009 are ominous since the drops from rising wedges can be quite dramatic.

The 10-month MA is 2220 and followed closely by old-timers that control a lot of money on Wall Street. Algo's, such as Keybot the Quant, have this number programmed into models. The 10-month is an excellent early warning indicator of serious trouble ahead. If 2220 is lost stocks will likely drop like a rock. The 12-month MA at 2197 is Keystone's indicator called "the cliff" since markets will completely fall apart under this level now at, say, 2200-ish.

Recapping after all this windbag talk, there is momo in the short-term monthly basis, but the neggie d over the last four months is very ominous. Stocks may go down for one month, then back up for a month for a matching high, when the RSI would likely turn neggie d in the couple-month time frame, then down for a month, then back up again where the MACD should go neggie d in the couple-month time frame. This would be THE top; thus, down to mid April, up to mid May, down to mid June, up to mid July then major roll over to the downside. This momo in the shorter term is subservient to the negative divergence for all indicators in place over the last four years.

The four-years of neggie d is is like an anvil hanging over the market's head supported by a thin frayed rope. The stock market may be able to play out the down up down jog move or moves described, however, the rope may snap and markets may collapse downwards at anytime printing the major top and the long-term downside begins. The 18-year stock cycle is coming to a close in 2018 (2000 to 2018; 1982 to 2000 was a secular bull) and we are  in a secular bear so it makes sense that now through 2018 and perhaps 2019, negative years should be logged for the stock market. It is very common to have powerful cyclical bull markets such as 2003-2007 and 2009 to present within the secular bear so this action is no surprise. A secular bull market would occur from 2018 to 2036 which makes sense since inflation and hyperinflation will likely kick into high gear in the 2020's driving all prices wildly higher.

The expectation would be for a major multi-year market top to print in the April-July time frame, or sooner (at anytime forward). The prices in the stock market now, once she rolls over at anytime in the weeks ahead, may not be seen again for many years. Looking at the prior SPX weekly chart and technical analysis, the MACD line needs to go neggie d to identify the market top in the weekly time frame which may be a couple weeks out so it is conceivable that the stock market may print its epic multi-year top over the next month. The weekly chart would be cooked and the monthly chart would honor the four years of neggie d across all chart indicators shown above which would be the end game and then the bears would begin to growl for many months and perhaps a couple years ahead. 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.