August is in the bag and September begins with the bulls flexing their muscles on happy US-China trade talk. The September candlestick begins with the bulls pushing the SPX up to 2938. The stock market continues printing a multi-month and multi-year historic topping pattern.
The rising wedge pattern is ominous. At the July top, 2 candlesticks ago, you see the all-time high at 3028 on 7/26/19 which violated the upper band. All the chart indicators were in neggie d (red lines) as price printed the record high so you knew a spankdown was in order which occurred. Price, however, did not even fall enough to tag the 20-month MA support at 2792 (in August).
The 10-month MA at 2831 is important since many Wall Street old-timer's follow this signal religiously. It is also a favorite of algorithms. Keystone's most important stock market signal is the SPX 12-month MA cross since it firmly identifies whether equities are in a cyclical bull or cyclical bear market pattern. Consider the 12-mth at 2816 as a cliff edge where all hope is lost below. Remember, price will eventually have to retrace to below the 200-month MA at some point forward and that is down at the low 1600's.
So 2831 would be an early warning signal that the stock market is falling apart in a serious manner. Then, if 2816 fails, it is all over but the crying. You can treat this 2816-2831 range as a support gauntlet for the broad stock market. Bulls are fine, on the longer term basis, above 2816-2831 while bears will growl and destroy markets below 2816-2831; the 2792 support would be immediately targeted and if that gives way, the lower band would be on tap down in the 2500's. Price is long overdue for a test of the 50-month at 2472 and rising.
The ADX was verifying that the US stock market was in a strong trend higher during late 2013 and 2014 but this petered out in early 2015. The stock market topped out in May 2015 with overbot conditions and negative divergence so it received the spankdown. Stocks were in trouble but the Federal Reserve and other global central bankers are always there to save the day to protect the wealthy class (that own stocks). The brown circle shows the Tweezer Bottom that occurred when the Fed stepped in to save the day. They knew it was over for the stock market so the sicko's intervened in this faux free market crony capitalism system to goose equities higher.
The same thing happened this year. The Fed and other global central bankers panicked on 1/3/19 and stepped in with a coordinated game plan to save the day. These people are sick. And the wealthy, that have raped America for everything its worth, especially with the help of the central bankers over the last decade, are skating off with their ill-gotten gains even willing to hide and stash the dough in negative-yielding debt instruments. As usual, the public is optimistic, and many are caught up in the President Trump braggadocio wealth vibe where if you feel rich you go out and spend money like you're a big shot since it will all work out in the end. The public will serve as the bag-holders.
After the central banker goosing during 2016 and 2017, the ADX verified that the move higher in stocks was truly a strong tend higher. This strong upward trend continued through 2018 but petered out early 2019. It is a disconnect to see price running up to new all-time highs in July while the ADX clearly confirms that price is no longer in a strong uptrend on this long-term monthly basis.
Remember late last year, Keystone was highlighting the MACD line (purple box) and it was a question of whether it would print a new high, or not. The two peaks in the MACD last year are nearly equal but the one on the right is a hair higher. That slightly higher high provided enough gusto for price to recover and come back up for a higher high. Then, with the July top, you clearly see the MACD is in neggie d.
The blue lines show sideways triangles for the RSI and MACD which is in concert with the ongoing choppy whipsaw sideways price action in equities for the last month. Those indicators are going to choose up or down which will provide direction ahead.
The upper band was violated so the middle band, the 20 MA, at 2792, and rising, is in play. There is no reason for the SPX to come back up again for another record high. The chart indicators are clearly out of gas. The Fed and other global central bankers are the rich Uncles, however, and will always step in to save the day to try and protect the wealthy privileged class that own huge stock portfolios. The central bankers maintain their dovishness pushing stocks higher since they are rewarded with lucrative speaking fees from the Wall Street investment banks once they leave public office. It is a filthy corrupt system. A cesspool ran by the privileged elite class just like Washington, DC.
The green Aroon line was pegged at 100 and now at 92 with nowhere to go but down. The last negative Aroon cross in early 2016 was confirmation that the stock market was falling apart after the May 2015 top but the central bankers turned that frown into a smile for bulls. Watch for a negative Aroon cross in the months ahead.
The SPX monthly chart shows that a long-term multi-month and multi-year top is being placed. If you are a young person, stay away from the stock market. Let your money even sit in a common bank account for a few months or year or two until you see how this epic mess works out. Remember, if you are a millennial, you have never seen a recession. It will change your life forever. If the central banks keep pumping, price may try and seek another move higher into the apex of that bearish rising wedge, but the chart indicators do not see this in the cards. The chart is very sick and the only cure is more Federal Reserve and other global central banker intravenous intervention. This is what everyone expects. The central bankers are the market. 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.
No comments:
Post a Comment
Note: Only a member of this blog may post a comment.