SPX S&P 500 2-Hour Chart; C&H; Upper Band Violation; Overbot; Negative Divergence Developing; Teasing All-Time Highs

The bulls are beating the bears up this week. The pre-holiday positive seasonality is slapping the bears around since mid-week. Volatility drops and banks run higher crushing all the bear's hopes and dreams. Keybot the Quant is long and says higher retail stocks will help bulls while lower banks and higher volatility will help bears. Note that the VIX fell through Keybot's line in the sand at 11.14 and stocks have been running higher ever since.

On the SPX 2-hour chart, the tight pink standard deviation bands squeeze the radical move higher. Price runs directly up the outer band without taking a rest. The middle band at 2456, and rising, is on the table. The blue lines show a C&H  (cup and handle) pattern with head at 2420 and breakout line at 2453 so a move above 2453 would target 2486 (2453+33). Using the whole numbers 2420 and 2450 would target 2480 so the target zone is the 2480-2486 to satisfy the C&H. You can also call it a W pattern if you like (light blue line) although it has a funky right side. This pattern has the same upside target.

The SPX is at 2479 only 2 points from a new all-time closing high at 2480.91 from 8/7/17 (purple circle). The all-time intraday high is 2490.87 from 8/8/17 (brown circle).

As price makes higher highs in this 2-hour time frame, the stochastics are overbot and cooked, rammed into the ceiling and neggie d. The histogram and ROC are in negative divergence. The MACD line and RSI, however, are long and strong wanting more higher highs in price after any pullbacks in this 2-hour time frame. The RSI is overbot.

Price should drop for a candlestick, then come back up again for a higher high in price, at that time, the RSI will likely roll over and be in neggie d. Then price will then go down again but then come back up for another higher high when the MACD line will likely go neggie d that will be the top in this near term. Thus, potentially a couple jog moves, down, up, down, up, then down for a move lower. 5 candlesticks is 10 hours of trading time on the chart so that takes things into Tuesday lunch time. So stocks may remain buoyant into the holiday weekend and then sort the top out next week when trading resumes. US market are closed on Monday for Labor Day.

If price sneaks out those two more highs as it tops and rolls over you can see where the SPX would venture into that 2480-2486 target zone to satisfy the C&H. Watch to see if the SPX prints a new all-time closing high today. That will be happy news for the headline writers this weekend. 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 12:54 PM EST: The SPX is at 2479.73 with a HOD at 2479.81. The bulls are pushing to try and print a record closing high today now only one point away. Can they do it?

Note Added 11:07 AM EST on Tuesday, 9/5/17: US stocks are trading again today after the Labor Day holiday yesterday. The SPX is selling off to begin the holiday-shortened week down 11 points at 2465. Price topped at 2481 close enough for government work to satisfy the C&H discussed above. The MACD was not exactly convincing as price topped out (did not display neggie d) in this 2-hour time frame so do not be surprised at some more buoyancy in the S&P 500. Price leaves a gap behind that is big enough to drive a truck through at 2470-2477. The full moon peaks overnight tonight and stocks are typically bullish moving through the full moon. A Bradley turn occurs on Thursday so markets are in a window where an inflection point may occur anytime now through next Wednesday. Stocks may stagger sideways, like a drunk in Times Square on Saturday night, into the Thursday ECB policy meeting where Draghi will dictate the direction of the euro, and subsequently, the US dollar and stocks. Thursday morning will be big so traders may take it easy until then. The all-time closing high at 2480.91 from 8/7/17 (purple circle) and all-time intraday high at 2490.87 from 8/8/17 (brown circle) remain the records. The SPX teased higher on Friday but could not close at a new record high.