SPX S&P 500 2-Hour Chart; Negative Divergence Developing

The uber high NYMO and low CPC and CPCE put/calls hint tht a near-term top is at hand in the stock market. This can occur any hour any day ahead. The 2-hour chart is a good place to watch to see where this top is at and as shown yesterday, the MACD line remains long and strong so price will want to make another high after any pullback in this 2-hour time frame.

The RSI was rolling over with neggie d but the Whitehouse staff yesterday, and President Trump himself today, proclaim great progress in the China trade talks goosing stocks higher. The joy over a potential US-China trade deal creates the positive joy.

The Trump announcement this evening at 9 PM EST (2 AM Wednesday morning London; 3 AM Frankfurt and Paris; 11 AM Tokyo) will move the futures market and perhaps Asia trading. Traders may have thought that the news will have to do with more border drama but now some think it may be positive news on trade. Everyone has to wait and see.

For the 2-hour above, one down-up jog may roll the RSI over and then another down-up to turn the MACD line into neggie d may be required. Thus, 2 to 4 candlesticks or 4 to 8 hours of trading time. Yesterday morning it looked good for a top late yesterday or this morning. The Trump trade euphoria talk creates the buoyancy in the stock market and further lift. The top is in when the MACD turns neggie d.

The push higher over the last couple days has created more strength in the daily chart. There may be some choppiness ahead like a hard down for a day, then bingo, a big up, but wow, a big down day again, you get the idea. Price should seek that middle band at 2515 in the days ahead. The SPX should top out anytime and probably drop from 40 to 100 SPX handles or more. The drop should be short lived during the days ahead and a sharp V bottom may form and strong recovery rally that will then be a substantive consistent rally for a few weeks.

President Trump is a wild card. If he brings joyous news to the table this evening, traders may run stocks higher like crazy men for the next few days. Conversely, the Trumpster may create more government chaos and a selling event. Keep watching the 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.

Note Added 10:24 AM EST: Bloomberg says President Trump will speak on the border wall tonight. Stocks are off the highs with the SPX up 8 points on the day at 2558.