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

The SPX monthly chart strengthened over the last couple months as the ECB and BOJ keep pumping liquidity into global markets and President Trump keeps promising tax cuts while cutting banking regulations. The red lines show negative divergence. The stochastics are cooked and want this long multi-year upside rally to end. Ditto money flow. However, note the RSI running into the stratosphere above 82. There are 4 days remaining in the month so the chart may change depending if the bears growl this week, or not.

The histogram ticks a tiny bit higher which will help create another month or two of stock market joy. This weak is critical since it may bring the RSI lower to end the month which will bring the multi-year top in sooner rather than what appears to be another 2 to 4 months out.

As mentioned in the previous monthly chart posting, watch the MACD line like a hawk. See how the ADX is moving higher but remains below the peaks from late 2014. This is negative divergence since SPX price moves higher in the same period. This indicator will tell you if the multi-year top is coming on fast or will be delayed a few more months. Bears need to keep the ADX below the prior highs, otherwise, the bulls receive a huge feather in their caps and stocks will likely remain at record highs early next year perhaps into springtime. If the MACD rolls back over and does not take out the 2014 high, the multi-year top for stocks is coming a lot faster than anyone thinks, say within 3 or 4 months or sooner.

The ADX is on the verge of moving into the purple box which signals a strong upside trend on the monthly basis. This would create strong bull juice to begin the new year. The downtrend was very strong in 2008 into 2009 when former Fed Chairman Bernanke rode in on a white horse and began printing money in March 2009 (QE1) to save the stock market and protect the wealthy elite class.

The 2014 period was another strong trend for stocks, this time higher, but that petered out. Never fear. The BOJ and ECB stepped in to keep the easy money printing presses going and guarantee that stocks will continue higher forever. So here we are in late 2017.

The projection is that stocks will pull back in sync with the weak daily and weekly charts but on this monthly basis, the S&P 500 will come back up again for new record highs after the near-term pullback. The multi-year top will be in when the RSI and histogram go neggie d; the next 4 days are important.

From the chart above, the multi-year top should print within the next 4 months it is a question of narrowing it down further and more will be known on Thursday. Keystone can post more monthly charts once the data point for November is cast in stone this week. 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.