SPX S&P 500 Daily Chart; Sideways Channel; Overbot; Rising Wedge; Negative Divergence Developing; Upper Band Violation; Price Extended; ECB Rate Decision Imminent

The big day is here; the ECB Rate Decision and President Draghi Press Conference. The EC decision drops at 7:45 AM EST and King Draghi begins the presser at 8:30 AM EST. Draghi will finish up the Q&A just as the US stock market opens at 9:30 AM EST. The big expectation, as evidenced by buoyant global stock markets, is for Draghi to flap his dovish wings.

If Super Mario is dovish, the euro may drop, so the US dollar will pop, and President Trump will run to Twitter to denigrate the Federal Reserve for not keeping up with the global race to the bottom. This stuff is hilarious. This is how crony capitalism systems plays out in its final years.

Thus, markets are a crap-shoot over the next 5 trading days. Draghi spews today and next Wednesday, 9/18/19, Fed Chairman Powell provides the US rate decision and conducts a press conference.

Placing the political theater aside, the chart shows the golden cross occurring as April began and the bulls are the winner a few months later. The thick blue lines show the major sideways channel trend through 2822-2950. Keystone explained the tops, in real-time, as they occurred, in late April and late July, and the neggie d spankdowns play out as expected and forecasted.

The S&P 500 collapses back into the sideways channel in early August and the gap-down move places the SPX on an island during August (thin blue circle). Price then breaks out higher printing an island reversal pattern. Happy trade talk and expected ECB and Fed stimulus create market joy. The central bankers are the market. The SPX pops above the blue channel, and the 50-day MA at 2949, and tags the upper standard deviation band. Therefore, the middle band, also the 20-day MA, at 2917, and rising, is on the table.

The red rising wedge pattern is ominous since the collapses can be quite dramatic as seen in early August. The stochastics are overbot agreeable to a pullback. Price is extended above the moving averages so a mean reversion lower will be needed. The chart indicators, however, remain mixed.

Remember on Monday, Keystone explained the SPX 2-hour and daily charts. The 2-hour was set up with negative divergence so a move lower was expected in the hourly time frame. The daily chart, like above, however, had a long and strong RSI and MACD. So mixing all that together and considering that King Draghi is on tap this morning, the thought was that the SPX would trade lower early in the week but then recover as the ECB dovish hype increased in front of the decision. This plays out as expected. The thinking was that perhaps the daily chart would then be set up with neggie d at this point but you clearly see that is not the case. The histo, stoch's and money flow are all cooked and neggie d but the RSI and MACD line would prefer to see another matching price high or highs in the SPX in the days ahead.

Of course all bets are off with the central bank decisions on tap; the ECB in a few hours and the Fed next week. Global markets may be in for a tumultuous week ahead.

There is a gap-fill needed at 3020-ish. It would actually be advantageous for the stock market bears to go up intraday, perhaps today, to print in that gap which will button-up the top side. The bears could then begin a slow and steady march lower for stocks that may continue for many months and even a year or two ahead.

If the central bankers were not on tap, the expectation would be for a day or two of softness but then price would head higher again above 3K until all indicators negatively diverge. The SPX will top out in the daily time frame when the RSI and MACD go neggie d. S&P futures are up +5 and the VIX is at 14.68 about 4-1/2 hours before the opening bell in the United States. President Trump softens his stance on Iran and China which creates buoyancy in stocks. 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 Friday Morning, 9/13/19, Friday the 13th: The US and China are touting a potential interim trade deal creating stock market joy. The SPX ran up to 3021 filling that gap from late July and sits at 3010. The SPX daily chart prints a doji candlestick which typically indicates a trend change. The S&P 500 daily chart continues to display a long and strong RSI and MACD and now the money flow has jumped back on the bull wagon. Thus, it will likely take a day or few for stocks to top out (down-up-down-up). Note that price is almost at the all-time high at 3028, only 7 points away intraday, but if you look at the chart indicators from late July to now, since price is starting to match, you see negative divergence; this is bearish for the chart and more powerful than the near-term neggie d developing. The full moon peaks for the month tomorrow and stocks are usually bullish through the full moon so the bulls may experience happiness today into the weekend. The NYMO remains elevated at 50-60 consistent where near-term market tops occur. The CPC and CPCE put/call ratios verify the complacency in the stock market. Folks are buying stocks without a care in the world. Ditto the VIX that printed a 13-handle yesterday, 13.85, and is now printing at 14.08. The wine is flowing like water. Traders sip yesterday's ECB champagne and look forward to imbibing on the tasty Fed rum, that is bottled at the virtual Keynes Distillery, next Wednesday afternoon. Every day is a party with the rich central banker's thumbs on the scale. Stocks may top out early or mid next week on the daily basis. Of course, President Trump's tweets and other trade and central banker news will dominate the market moves. The euro is above 1.11 to 1.1101. The US 10-year yield rises to 1.81%.