SPX S&P 500 Daily Chart; Overbot; Negative Divergence; Upper Band Violation; Price Extended

The S&P 500 has gone parabolic in recent days. President Trump keeps touting a huge $1 trillion infrastructure package coming as well as drastically lower taxes and reduced regulations. At the same time, the Fed is trying to instill confidence in markets by touting a rate hike in 13 days due to an expanding and robust economy.

Charts can only price in everything known up to the minute; they cannot predict sudden news events and 'The Donald' hit a homerun on Tuesday night with his speech and the charts are pricing in the new found joy. Trump finally looked very presidential and this is creating comfort in the orange-headed showman's leadership. The last look at the daily chart right before the Tuesday night speech predicted down. The only thing that could stop the technicals was happy news from the Fed or the president and both barrels are fired at the bears. So charts needed a little time to absorb the latest euphoric headlines.

Look at how price spiked up, gapping up, to tag the upper standard deviation band. The middle band at 2339, and rising is firmly on the table and also the lower band at 2270 and rising. The 20-day MA is 2339, the same as the middle deviation band, and will need back kissed. The sneaky bulls pushed the RSI to another high when price printed the high, ditto the MACD line, so there may be one more jog move in play, down, up, down, on this daily basis, before she rolls over. The histogram, stochastics and money flow are in negative divergence wanting price to drop now which creates today's sogginess in the stock market.

Price is extended above the moving averages and needs a mean reversion. The expectation remains for lower prices ahead only now from a higher high after the orgy rally yesterday. Today may stay down to satisfy the histo, stoch's and money flow, but then price should come up again to the highs, say 2400-ish, tomorrow. When the matching price high occurs, the RSI and MACD line should be flat to negatively diverged which will lock in the top and begin the rollover to the downside.

The market action is historic. The price action is epic and very atypical. If you are watching markets for the first time, understand that this type of action is not the norm. Markets remain in uncharted territory after 8 years of obscene central banker Keynesian spending. No one knows how the game ends since no one that was trading in the 1930's is still living.

Keybot the Quant remains long but is champing at the bit to go short. GTX (commodiites) are key at 2367 and VIX (volatility) at 12.86. GTX is at 2365 now in the bear camp creating weakness in stocks today. VIX is at 11.96 remaining in the bull camp. Market bears got nothing until VIX moves above 12.86; you will notice dramatic selling in stocks when this occurs. If the SPX drops under 2380, now at 2385, Keybot will likely flip short. If GTX moves back above 2367, the bulls will begin running stocks higher to new all-time highs again. The drama in the markets continues; it is difficult to keep up with all the theatrics. 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.