SPX S&P 500 Weekly Chart; Overbot; Negative Divergence; Double-Top (M-Top)

It's cooked. Stick a fork in it. Crispy-fried. The SPX weekly chart is in full on bear mode now, however, as usual, happy talk will try and save the day. The ongoing nauseating fiscal stimulus saga drags on with Trump, Pelosi, Mnuchin and McConnell mud-wrestling each other. No one actually cares about common Americans; they care about their political futures and are progressing the stimulus bill based on each individual's interest.

Humorously, analyst such as Mike Wilson at MS, say any oncoming slog in stocks, over the next three weeks, is a buying opportunity for the next rally since a stimulus bill will be coming. That's just it. Everybody and his brother knows a stimulus bill is coming after the election mess ends 11/3/20 if it does end on Election Day. The fiscal stimulus may be priced-in to equities already; everybody knows and expects stimulus. What happens when folks are waiting for the so-called buying opportunity but are cut off at the knees each time they attempt to enter the stock market long? The stock market is a short the rallies scenario not buy the dips.

The SPX monthly chart is also topped out with neggie d. The MACD line is trying to poke higher and there are 7 trading days to play out in October. If the SPX weekly creates its spankdown as the neggie d suggests, the MACD on the monthly chart can easily be neggie d at the end of the month which means the stock market has topped-out not only on the weekly basis but the long-term monthly basis and likely couple-year or more basis. If the MACD remains that hair higher on the monthly chart, the stock market will top out on a long-term basis in the November-December time frame instead of now. This is a far different analysis than Wall Street is telling you, isn't it? Well, do you feel lucky punk? Will you get blown into the water by holding long positions through the pending downfall, or, will you be able to walk away unscathed?

The weekly chart above clearly shows universal negative divergence for the double-top or M-Top in play (red lines). There is no more gas in the tank to take stocks higher. The maroon lines show the last top Keystone called due to the neggie d but, if you remember, the long and strong MACD line (green) was still in play wanting price to come back up again for one more matching or higher high. That is what the SPX did last week. Now, the red lines show the MACD went neggie d so the top is in on the weekly basis.

Price did not tag the upper band but it was close. The center band, the 20-week MA, is at 3297 and rising and serves as a downside target, call it 3300. The CCI is overbot agreeable to a pullback. The Aroon lines are overbot, the green line above 70 and red line near zero, so watch for a negative cross as the selling gains steam.

Mnuchin and Pelosi are doing the two-step dance playing their crony capitalism baby games. If a stimulus bill is announced, price may spike to that upper standard deviation band at 3584 but the expectation would be that the chart simply sets up with neggie d again in a week or two (the top is just delayed a week or two). 

It is remarkable how ignorant folks are about the ongoing escalation in the coronavirus pandemic. It is very possible that the United States will fall into a funk like February/March/April with the virus. Obviously, the hit to the economy would sink stocks. The Fed is at the end of the line. This is evidenced by the Fed members asking for fiscal stimulus help from Congress. 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.