SPX S&P 500 Monthly Chart

The neggie d spankdown occurs this month for the S&P 500. The red lines show how price continued higher but the indicators were all out of gas, thus, price stalls. The SPX violated the upper band so a move to the middle band at 2624, which is also the 20-month MA support, was on the table and on Friday, price drops to 2628 close enough for government work. The lower band at 2296 and rising remains on the table going forward.

The top in the MACD line was a bit cheesy, but even if the SPX musters up a strong relief rally, the current negative divergence is likely too much to overcome. After almost one decade of central banker Keynesian money-printing, the index is sputtering and running out of gas. It is obscene to see the index rise from the bottom left to the upper right purely on central banker largess. It makes you want to vomit.

Free markets and capitalism are a joke; these theoretical ideals were spit on to save the banks and protect America's wealthy elite class in early 2009 (that own huge stock portfolios). America is best described as a 'pseudo free market crony capitalism' financial system.

The loss of the 10-month MA at 2754 and 12-month at 2738 remain major technical breakdowns. The stock market will remain in turmoil and in a cyclical bear market pattern going forward unless these two key moving averages are retaken.

When a month moves in one direction, typically, the last few days of that month it will move counter to that direction. October is a mini-crash downwards so the bulls may see some relief into Wednesday the EOM. A bounce will also hold the 20-month MA support at 2624 at least for now. Watch these three key moving averages to gauge the strength of any rally.

Bulls will rejoice if the 12-month MA is retaken but they will have to also retake the 10-month MA to prove they have lots of upside strength. If price moves above the 12, but then stalls at the 10 and begins slipping away to the downside again, and then loses the 12 again, Katie bar the door; the stock market may go straight into free fall. Bulls can throw confetti if they regain the 10-month MA. 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.