SPX S&P 500 2-Hour Chart; Negative Divergence

The market bulls are partying like its 1999. More joyous chatter on the tax-cut bill in Congress pumps the S&P 500 to a new all-time high at 2672.33 the highest number ever printed in history. Bears are slapped in the face with the central bankers and then when they take a rest, the happy tax-cut bill talk sends prices higher.

The 2-hour chart is not looking for more upside, however, and is more in tune with the previous CPCE put/call ratio chart looking for downside. Perhaps the tax bill is a sell-the-news event? Price makes the new all-time high but the chart indicators are universally negatively diverged (red lines) wanting to see a spankdown.

If more happy tax bill talk occurs today, the upper band at 2675 must be respected but even if that prints, the indicators will likely remain neggie d. Note how price did retreat to the middle band on the previous selloff but the bulls rammed it higher again on the dovish central banker talk this week and the tax bill euphoria. ECB's Draghi flaps his dovish wings yesterday paring back on stimulus but saying the QE program may run long after September 2018; the central bankers cannot help themselves. The central bankers are the market.

The expectation is for a pull back so it will be interesting to see how it plays out today. 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 Saturday, 12/16/17: The wild upside stock market orgy continues after Senators Rubio and Corker (who originally voted no) said they will vote yes on the tax bill. The new tax legislation is a done deal and will be signed next week so stocks catapult higher. Markets remains very news-driven. When charts are hit with a news event it may take a little bit of time to price it in. Let's see how the chart looks after the upside push. The SPX pierces that upper band at 2678 printing a HOD on Friday at 2679.63 the highest number ever printed in history. Since the upper band is violated, the middle band at 2664, and rising, is on the table. The neggie d shown above remains in place. The stochastics push higher but now they are overbot. The MACD line is trying to squeeze out a smidgeon of life but overal, a roll over to the downside would be expected. The SPX daily chart has its indicators remaining negatively diverged wanting to see a spankdown but the pesky MACD line squeezes out a sliver more of upside juice with the tax bill happy talk so it may take a couple more days to fully top out. Perhaps down in the 2-hour time frame on Monday, then price comes back up again, then roll over for extended down say, starting mid week or so. Interestingly, the tax bill will likely be approved by Congress on Tuesday, then perhaps signed into law by the president on Wednesday. Either that will be a sell the news event in line with the charts, or, the euphoric joy over lower taxes will create another spike higher in equities and delay the top by a couple more days. And the other possibility, albeit very unlikely, is the bill hits a procedural snag next week and something goes amuck which would be a double-whammy to the downside along with the charts. Considering the odd, erratic adn unstable behavior ongoing in markets, and recent system outages and technical glitches being swept under the rug, do not rule out a flash crash event in the market up ahead; it would be the black swan no one sees since everybody is too busy buying stocks at the ask.