SPX S&P 500 Daily Chart Central Banker Party

The bulls are beating the bears over the head with the central banker baseball bat. The party started on Wednesday evening, 10/14/15, when Jon HIlsenrath at the WSJ released an article saying the Fed will likely not move on the rate hike until 2016. Many believe Hilsenrath has the inside track at the Fed so the S&P futures launched 15 handles in a heartbeat. This led to the pop in stocks (blue circle) when equities were actually beginning to roll over. Another central banker stick save. That joy continued with Fed members injecting happy dovish talk.

Then ECB President Draghi fired his money bazooka on Thursday, 10/22/15,  to keep the easy money booze flowing (brown circle). The tech big-wigs AMZN, MSFT and GOOGL had a trifecta of earnings euphoria on Thursday evening leading into Friday morning but the biggie is the PBOC cutting rates and bank triple R's on Friday morning (purple circle). The SPX jumps above the 200-day MA at 2060. The central bankers are powerful. After a few days of the pumping, the charts price-in the new information.

Price has not violated the upper band (pink) so the 2098 is in play. The SPX filled the gap at 2075-ish. There is a gap above at 2096-ish in play. The red lines show negative divergence. The stochastics are overbot wanting to see price drop. Money flow is developing into a weak and bleak profile. The RSI, however, never became overbot so that is still in play to help the bulls. The MACD line is long and strong (green) so price will want to come back up to the current levels or higher after any pull back.

The full moon peaks in the morning at 8 AM EST (in Pennsylvania as this is typed the full moon is out in its full glory lighting up the ground like daylight) and stocks are typically buoyant through the full moon each month. UPS earnings are out on Tuesday morning and will set the market mood. Consumer Confidence is a very important data point each month. Tomorrow is a key day and the behavior through the FOMC decision on Wednesday afternoon will tell a lot chart-wise.

The projection now would be down then back up then down for a more sustainable down move for several days, however, the weekly chart has upside juice so on a weekly basis price will want to come back up again. Thus, say a couple days of weakness, price may back kiss the 200-day MA at 2060, then back up to 2080-ish, perhaps to the 2096-2098 area, for a day or three, then price should roll over, it all depends on when the MACD line rolls over to top things out. The monthly chart remains weak. The 50-week MA is 2061.

So after some sideways jog action, price should come back up again on a weekly basis, so the 2096-2030 range has to remain in play for November, however, with the weak monthly chart price would be expected to roll over again for another strong move lower on the monthly basis for lower lows. This scenario is in direct contrast to the consensus that expects a year end rally. It may seem like the year end rally is in play say in early or mid-November, but instead the bulls will receive a Christmas stocking filled with coal.

When a month is up wall to wall like this month, the last couple days or so typically finish weak which would be Wed-Friday. 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.