SPX Daily Chart New All-Time Record Highs Tight Bands Potential Upside Channel Break-Out

The SPX prints a new all-time record high at 1885.84 and new all-time closing high at 1885.52. Stocks are gapping up three days in a row all the way from the bottom of the 2-month sideways 1840-1880 channel to the top. The gaps will likely need filled moving forward. Today is an important day since price will decide if it is officially breaking up through the top rail of the brown sideways channel, or not. At a minimum, a back kiss to 1880 would be anticipated. The pink standard deviation lines squeezed inward for a sharp move and so far price has catapulted from 1840 to 1886 in 4 days. The bands are now expanding outwards which typically will indicate a continuation move and price continuing vertically, however, if there is a time for price to reverse, it is now, either today and perhaps tomorrow. The bears must make a move since there is no more time remaining. If the bears do not come to play today the bulls are going to push above 1900.

Note the band squeeze in December where price started to move lower (opposite of what is occurring now), the bands started to expand, price continued lower for one day, then the second day, whammo, hard fast upside reversal and the band squeeze actually results in a huge 70 to 80 handle upside move. Does this fractal repeat (as a mirror image) where the SPX will reverse hard either today or tomorrow and drop about 70 handles over the next couple of weeks? The ECB Rate Decision is tomorrow likely the most important event of the week, then the Monthly Jobs Report Friday morning.

Interestingly, recent volume favors the sell side. At the late December top note how price was gapping up before the roll over so that fractal may repeat. The red and maroon lines show the negative divergence spank downs to begin the year and the early March top. Sometimes the charts are like herding kittens since the RSI wanted another high after the January selloff, then when markets topped in early March the money flow was running higher. The blue line shows the higher high in price that is now printing with universal neggie d across all indicators in the three-week time frame which forecasts bearishness ahead. However, the jolly rally the last three days creates momo and in the very short term the green lines show long and strong behavior so a day or three may be needed to burn off this momo energy.

Today and tomorrow, call it the rest of this week since ECB and Jobs are on tap, are key and will likely determine market direction for the next 2 to 4 weeks. Overall projection remains for sideways to sideways lower prices for the days and weeks ahead. Bears must close the SPX under 1880 today, otherwise, Keystone's 80/20 rule says 8's lead to 2's and the pathway from 1880 to 1920 would be open. A multi-year top is expected to be forming currently and may peak at any day forward at these levels. 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.