SPX S&P 500 2-Hour Chart; Overbot; Negative Divergence Developing; Upper Band Violation

A few of the prior charts hint at a market top at hand but the bulls remain enthusiastically and euphorically bullish sipping Fed wine and ECB champagne while smoking BOJ crack. The market price action is epic and fascinating. The S&P 500 prints a new all-time record high at 2714.37 and new all-time closing high at 2713.06 today, 1/3/18.

The VIX drops to an 8-handle for only the sixth time in history indicating fearlessness. The VIX printed the record low at 8.56 the day after Thanksgiving.

The CPCE put/call is at multi-year lows indicating rampant complacency. The NYMO remains elevated at 18.16 more consistent where stocks are toppy rather than down at -30 to -80 where market bottoms occur. The SPX daily chart is displaying negative divergence for all indicators although the bullish price momentum is trying to spoil the bears hopes. The stock indexes have gapped higher at the opening bells on both days this year.

Maybe the SPX 2-hour chart can provide clues. Look at price climbing the back of that upper standard deviation band. Prices are above the top deviation line!! The brown circle shows the active volume to begin the year. Wealthy kids and other young folks took their holiday money and are humorously buying FB, AAPL, AMZN, NFLX, GOOGL, and other high-flying stocks with both hands.

Price needs to come back to earth and check in at the middle band at 2690 and rising. You can see the gap up that occurred. The SPX is on an island above 2698 so an island reversal may occur down through the 2695-2698 gap.

That tight band squeeze is something (pink arrows). The bears print three black crows as price collapses but it was a fake-out move and the bulls jam stocks higher this year. The band squeeze is strong spike higher. Tight bands do not predict direction only that a big move will occur. The ADX line is sub 20 so the strong trend that was in place for the 2-hour time frame in late November and early December petered out.

The red lines show negative divergence in play but the green lines show more long and strong bull juice. Price may have to come down, then back up again for another high, to roll the RSI and MACD line over with neggie d in the VST, or at least keep them under the levels from early December. The negative divergence is firm over the last month. The SPX has that price momentum after the two-day orgy so it is tough to slow an object in motion like that.

So one or two jog moves, down-up, or down-up-down-up to provide the new highs with neggie d, may be needed to place the top. This is 2 to 4 candlesticks which is 4 to 8 hours which is tomorrow into Friday morning for the jobs report. Thursday may be a slow day with global traders waiting for the Jobs report tablets to be passed down from on High Friday morning.

So the guess for the top would be between noon tomorrow and noon Friday. Of course any bad news, or good news, can send the markets wildly one way or the other at any time. Bulls are probably already planning on trying to run the clock out for Thursday with flat markets and then roll the dice for the Friday morning jobs report. 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.