SPX S&P 500 Daily Chart; Overbot; Rsing Wedges; Negative Divergence; Upper Band Violation

The SPX daily chart says down but President Trump, the Federal Reserve and other central bankers say up. Trump is pumping stocks higher with the non-stop US-China trade deal hype and the central bankers send equities joyously higher after promising to print easy money forever. The wealthy elite class, that own large stock portfolios, dance with glee. The central bankers are the market.

The rising wedge is a bearish pattern and the collapses can be quite dramatic. Remember, the uber low put/call ratios, and the VIX coming to within 17 pennies of an 11-handle on Friday, verify the ongoing off-the-charts complacency and fearlessness currently in markets. Uncle Johnny, who is typically a very conservative man that wears wingtip shoes and still has a newspaper delivered to his door each morning, invested his entire life savings in the stock market on Friday afraid that he is missing out on the opportunity of a lifetime. The pundits on television told him so.

The red lines show negative divergence across all indicators so price needs to receive a spankdown for a few days or week or so. The RSI and stochastics are overbot agreeable to a pullback. Price tagged the upper standard deviation band at 2893 so the middle band at 2830, and rising, is on the table, as well as the lower band at 2769, and rising.

The volume candlesticks (blue circle) show seven solid weeks of buying. That is impressive. Traders and investors are buying what Donny Trump and the central bankers are selling. However, the volume is slipping away and not one single one of those happy bullish volume candlesticks are higher than the big sell day on 3/22/19. Price likely needs to return to this 2800-2850 zone to show respect.

Interestingly, after the over 3-month stock market rally, the 150-day MA at 2742 continues sloping lower indicating that the stock market remains in a cyclical bear pattern. Of course the bears will need to send the SPX sub 2742 to keep that trend in place which will obviously lead to gloom and doom ahead. The bulls need to keep price above 2742 for as long as possible since this will eventually curl the 150 higher and usher in a cyclical bull market. The 150 is flat-lining now so a decision will be made. If the bears want to maintain weak markets ahead then need to get the SPX under 2742 pronto. Otherwise, bulls win going forward.

The SPX daily chart above and prior 2-hour chart both say down ahead for the hours, days and perhaps week or so ahead. The new moon peaked on Friday for the month which typically creates sogginess in stocks so Monday trading may be interesting. SPX weekly chart, however, has a long and strong MACD line, RSI and money flow which hints at more higher highs ahead after the pullback due to the daily and 2-hour charts. The weekly chart may need 2 to 4 weeks to set up with negative divergence (this month) that will then usher in a multi-week decline for equities.

So the SPX may take one of two paths in the near-term. First, the S&P 500 may drop for a few days but it is a garden-variety pullback like the last two and then price recovers to matching and slightly higher highs as mentioned with the weekly chart. Second, the SPX may collapse like a rock right now, crashing 40 to 120 points, or more, over the next week. That will likely be met with a V-shape recovery and price rocketing back up to current levels as mentioned with the weekly chart. Going forward, the bulls are likely picking up nickels in front of a bulldozer.

The malaise in markets with this sideways bias, receiving upside spurts due to trade and central banker news, may continue until the SPX weekly chart sets up with neggie d across all indicators which is likely this month or early May. The tricky part is when does the low put/call ratios finally extract their pound of bull flesh? Is it right now, as the daily and 2-hour charts are set to create a smackdown (a big pullback would have already been expected by now), or, will this sideways to sideways up market malaise continue a little while in April and once the weekly chart is set up with neggie d that will lock in everything, including the low put/call negativity, and send stocks into Hades in May and June?

The timing of the market rolling over may coincide with a US-China trade deal. It would either be a sell-the-news event or perhaps fall short of goals and global investors hit the sell button. 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.