SPX S&P 500 Daily Chart; Overbot; Rising Wedge; Negative Divergence Developing; Upper Band Violation; Price Extended

Waiting for the top in stocks is like waiting for Godot. The upside momentum is strong. New highs create new highs. Remember, the top is not in on the daily chart until that MACD line goes neggie d.

Same stuff going on as explained previously. Overbot RSI and stochastics are agreeable to a pull back. The red rising wedge is bearish. Price is extended above the moving average lines needing a mean reversion lower. Price has violated the upper band and desperately needs to touch the middle band, which is also the 20-day MA, at 2771 and rising. Since the SPX has not back-kissed the 20 since November, when stocks roll over this downside target at 2771-2800 should be very likely.

The chart indicators are all negatively diverged wanting to spank price lower sans the MACD that is still sloping higher; long and strong. So the likely outcome is down for a day or two but then back up again for a matching or higher high in price when the MACD will likely show neggie d identifying THE top in the stock market in this daily time frame. A long overdue pullback will then begin in the daily time frame.

Since the pullback is overdue, one potential outcome is the pullback say starting today and early next week, then the move back up to satisfy the long and strong MACD may be a short-lived intraday price spike up to the record highs from which equities will begin rolling lower. The top is very very close now as you can see above.

It may be worthwhile to look at the SPX 2-hour chart to see how the top/s form in the VST time frame. This is a futile task until the momo exhausts itself on the daily chart but that is close now. Note the selling volume candlesticks are higher than the buying candlesticks; this is the smart money sneaking out the back door selling shares to Timmy Tech that can hardly wait to brag at the office water cooler that he owns Facebook, Amazon and Netflix shares. The nice money manager offered shares and told him that he was making a great decision buying the hot FAANG stocks. In a few months the money manager will tell Timmy that he should think of his investments as long-term holds.

Thus, forecast would be for a top in stocks in this daily time frame over next one to three days then down to the 2775-2800 target zone. The low CPC and CPCE put/call ratios would finally be granted the pound of bull flesh they have been waiting for over the last six weeks. Watch that MACD line. 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.