SPX S&P 500 Daily Chart; Test of Upper Trendline of Sideways Channel at 3800-4150 with Fed on Tap

The stock market choppy slop continues. As per the last SPX charts, the thin black vertical line shows how price topped-out with the neggie d on the RSI, histo and stochastics and the overbot stochastics were also agreeable to a pullback (red lines). The MACD line and money flow, however, remained long and strong (green lines) so there was still fuel in the tank for more upside in price on the daily basis.

Price sags and then forms the Tweezer Bottom hinting at the recovery move higher but that only lasts one day as inflation data and Fed speak sends stocks sharply lower for 2 days then sharply higher for 2 days snaring a bear trap. The chop suey continues.

Price makes the higher high compared to the prior top so the indicators can be assessed for potential negative divergence. The dark maroon lines show universal negative divergence for all indicators as price makes the higher high so the SPX does not have any more upside oomph. There is momentum due to the 2-day upside orgy so that push higher may continue for a couple days.

May trading starts tomorrow so new money comes into the market which helps buoy stocks. The Fed is on tap this week so stocks are usually bullish the 2 days in front of the Fed announcement on Wednesday afternoon. The negatives are the First Republic failure which may occur this weekend. If the banks begin the week on a sour note, the stock market will follow the doom and gloom. If the stock market brushes off the First Republic problems, the positive factors may boost stocks into the Fed decision on hump day afternoon when Pope Powell brings the tablets down from On High and tells traders how to trade. Such is the crony capitalism system.

Price is near the upper standard deviation band at 4179 so that is an upside target. It would also match-up with the February top where the RSI, MACD and other indicators should maintain their neggie d. The multi-month sideways channel of chop at 3800-4150 remains in play with the SPX testing the upper trend line (purple). For the month of April, the sideways channel at 4075-4170 was in play with price teasing a breakout higher (blue) to begin May.

The chart is uninspiring and weak. Price is propped up on soundbites of inflation and Fed speak and the week ahead will be no different. Wednesday will obviously be the big pivot day as Powell speaks. Price may tag 4180 to snag the upper band as traders sit on their hands waiting for Wednesday. The banks will be the major focus. Another top on the daily basis is expected to occur in the days ahead. 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.