SPX S&P 500 Daily Chart; SPX Prints All-Time Record High 2694.97; Overbot; Rising Wedge; Negative Divergence; Price Extended; Upper Band Violation; Tax Bill Eve

The stock market rises on the tax bill hype printing a new all-time high at 2694.97 and new all-time closing high at 2690.16. The S&P was only 5 points from 2700. The tight bands squeezed out a strong upside move (yellow arrows). The red lines show negative divergence in play wanting price to roll over to the downside but the MACD remains long and strong wanting another higher high in price after any pull back occurs in the daily time frame. The RSI and stochastics are overbot agreeable to a selloff. Ditto the red rising wedge which is a bearish pattern.

Therefore, a jog move would be a projection, down one day, say Tuesday, then up the next for another new high, say Wednesday when President Trump is perhaps signing the tax bill into law, and that would be the top. When price comes up after a pull back you need to see the MACD line go neggie d that will tell you the top is in.

The CPC and CPCE put/call ratios collapsed to uber lows indicating complacency and a near-term top at hand and this jives nicely with the chart above. A hump day top may be in the works and from there the SPX should retreat to the 20-day MA at 2635 for starters. Price is extended way above the moving averages so a mean reversion lower is needed. The SPX violated the upper band at 2692 so the middle band, the 20-day, is on the table at 2635 and rising.

The ADX is moving higher. Market bulls need to see the ADX above 30 since that will prove the upside trend is strong and more upside joy is ahead and the bull rally will be extended. The bears need to crush the ADX right here and start pushing it lower to prove the upside trend has failed.

It would not be surprising to see the SPX testing the 50-day MA at 2597-2601 the first week of January, or sooner. The tax bill impact on the market, however, remains an unknown until mid-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.