SPX S&P 500 Daily Chart; SPX All-Time Record High 3950.43; Overbot; Rising Wedge; Negative Divergence; Upper Band Violation

The holiday-shortened week is off and stumbling. This is one of those weeks where a Tuesday feels like a Monday, and then the whole week is messed up day-wise. Yesterday was a Stormy Monday. Everyone is always waiting for the eagle to fly on Friday. The SPX daily chart is in negative divergence. The huge amount of liquidity, stimulus money and Reddit and Robinhood money, keeps pumping stocks ever higher blowing the bubble bigger.

Wheee! Whoopie! Wheeee! The SPX prints a new all-time record high at 3950.43. All Hail Fed Chairman Powell and his money machine? All Praise to Sleepy Joe Biden's bigtime debt-fueling spending. Whoopie! Woo-hoo. The bulls are trying to push money flow and the RSI higher but it is a tough slog. The purple circle shows the lower volume on the upside. Conviction for more joyous highs would be shown by robust volume not lagging volume.

The upper band is violated so the middle band, the 20-day MA at 3851, is on the table, and the lower band at 3728. Blow on the SPX; that should be all that is needed to see it fall down the basement stairs. This is OpEx week so stocks are typically higher from a Tuesday low into a Wednesday high and this helps create buoyancy in equities.

Everyone is talking SPX 4000. BAC strategist Michael Hartnett stands on top of a soap box and proclaims words that may become as famous as Irving Fisher himself. Hartnett proclaims, "The only reason to be bearish is... there is no reason to be bearish." And this guy handles millions of dollars. Keystone just posted a string of charts explaining the topping process; neggie d is the reason for concern, my man, neggie d. Then there is JPM analyst John Normand who says he is "comfortable advising investors to stay long most markets." Normand proclaims, "When growth is above trend, monetary policy is ultra-loose and fiscal policy is on overdrive, markets tend to exhibit the financial variant of Newton's Law: they stay in motion until acted upon by another force." Newton, schmootin. He probably does not know the difference between Newtonian and plutonium. It is funny stuff.

Irving Fisher pushes the lid open on the casket, points his bony finger into the air and says, "Listen to Hartnett and Normand, folks, it is a permanently-high plateau we are on. You have nothing to worry about." Fisher said that right before the 1929 crash.

The blue lines show the triple top saga, remember that in the Fall? The ole Wall Street adage is that there is no such thing as a triple-top. As Keystone has said many times, after looking at 10's of thousands of charts over the years, a triple-top is a 50/50 proposition and does not offer anything to trade off of. Half the time the triple-top will hold and price will be smacked lower (blue dotted line) but the other half of the time price will break out higher which is what happened with the S&P 500. So in this example, you can declare that there is no such thing as a triple top.

Keystone's 80/20 Rule says 8's lead to 2's so the breach of 3800 opens the door to 4200. It does not guarantee it will occur but keep it in mind. The high is 3950 so 3948 was breached so 3952 is on the table. The SPX 2-hour chart remains in neggie d so down is the expectation.

Keybot the Quant is long so there remains a conflict between Keystone's individual trades which are nearly all shorts (due to the neggie d on the weekly and daily charts) and the robot that remains long. The two will rectify one way or the other. You can see that rally that started after the triple-top breakout to present is narrow and straight nearly all machine-driven trading.

Both stocks and volatility are up today so one of them is wrong. The bulls are euphoric and all-in as the couple of examples show above. It would be a bummer to top-tick the market with a comment. It is decades later, nearly a hundo years, and poor ole Irving is still constantly dragged out of his coffin to be paraded across blogs and internet web sites as the perpetual unaware and clueless bell-ringer. It is funny stuff. No one wants this eternal namesake.

CAT is rallying today but its chart is set up as a short. CAT is going to get bulldozed and in the broad stock market, investors that are busy picking up nickels in front of the bulldozer, with their heads buried in a smartphone looking at the Robinhood app, are going to turn into a pancake. Do not worry so much about a few percent of upside you may miss, worry about the -10% to -60% of downside that may thwack your capital. When that happens and you frantically call your money manager exclaiming, "What do I do!?" The broker will tell you that whether you knew it or not 'you are now a long-term investor'. That is like the ole Wall Street joke, what is a long-term investor? That's a short-term trader who's trade went the wrong way.

Stocks may want to receive that OpEx buoyancy into tomorrow but the bears should growl at anytime. 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 10:29 AM EST: US dollar index up to 90.54. The 10-year yield explodes higher to 1.26%. SPX is up 10 points, +0.3%, to 3945. The all-time high is 3950.43 which printed at 9:48 AM.  VIX 21.58.

Note Added 10:46 AM EST: US dollar index up to 90.50. The 10-year yield pops higher to 1.275%. SPX 3945. VIX 21.52. Stocks and volatility are both up so one of them remains wrong.

Note Added 12:13 PM EST: The 10-year yield pops higher to 1.284%. SPX 3930. VIX 22.01.

Note Added 12:13 PM EST: The 10-year yield pops higher to 1.29%. The Wall Street gangs face off against each other. The bulls, the green gang, pull a switchblade on the bears. The bears, the red gang, are ready to rumble. Beat It. The gangs push back and forth across the flat line. SPX 3938. VIX 20.95. The Fed is in there jamming volatility lower to light the way higher for equities. VIX is pounded down from 22.46 HOD, where it was ready to break out higher, to a 20-handle over the last hour. Comically, volatility and stocks both remain positive on the day so one of them remains wrong.

Note Added Friday Morning, 2/26/21, at 6:20 AM EST: The US stock market retreats on Thursday, 2/25/21. The S&P 500 drops 96 points, -2.5%, to 3829, and was down well over 100 points intraday. The Dow loses 560 points. The Nazzy Comp dumps 479 points a bloody -3.5% loss. The Nazzy 100 plummets -3.6% as tech stocks are thrown overboard. The Russell 2000 collapses -3.7%.