SPX S&P 500 2-Hour Chart; Overbot; Rising Wedge; Negative Divergence; Upper Band Violation

The stock market saga continues with bulls marching higher goose-stepping over the bear's hopes and dreams. The left red arrow shows the prior top in this VST time frame, as previously discussed, brought on by the overbot conditions, rising wedge and negative divergence. Price would have been expected to retreat further, however, the Federal Reserve was at play this week. Chairman Powell rode into the press conference on a white horse, releasing white doves into the sky and throwing money out to the adoring journalists and lucky bystanders. Powell turned from dovish to uber dovish so the expectation would be for a 30-point pop in the SPX (this is the typical bounce occurring over the last decade each time Bernanke, Yellen or Powell flaps their dovish wings).

However, on Wednesday afternoon that did not happen. Stocks did not know which direction to move. The rally was a delayed reaction taking place on Thursday the S&P 500 gaining 33 points. Stocks are typically bullish moving through the full moon each month which peaked Wednesday evening.

So equities receive the neggie d spankdown but the Fed sends price skyward again for another high. Price violates the upper standard deviation band, printing the higher high in price, with universal neggie d across all indicators remaining in play. Ditto overbot conditions and the red rising wedge. All these parameters are/remain bearish. The expectation is for the SPX to trend lower for a few hours and days ahead. The middle band at 2834 is on the table as well as lower band at 2811.

Remember, the uber low CPC and CPCE put/call ratios have not yet extracted their pound of bull flesh and are foaming at the mouth to do so. 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 10:03 AM EST: Whoopsies, daisies. The S&P 500 drops 27 points, -0.9%, to 2827. LOD 2825.85. So price quickly tagged the middle band. VIX 15.28. Yesterday, the SPX printed new highs but instead of the VIX sporting a 12-handle and lower, it was at 13 and now runs above 15. That divergence may have been telling with the stock market making new highs but volatility not making new lows. The XLF is taken to the shed out back and beaten severely down -2.3% to 25.46 below the critical 25.95 bull-bear level called out by Keybot the Quant. This behavior creates negativity in the broad stock market. The SOX is down -1.6%. So the banks and chips that took stocks higher yesterday take it away today. Watch copper closely. If it keeps falling, that will place the stock market into a firm bearish pattern. CPER is at 17.97; trouble would begin at 17.77.

Note Added 12:00 Noon EST: The SPX is puking 49 points, -1.7%, to 2806. The uber low put/call ratios signal complacency which begin claiming their pound of bull flesh. Price drops out of the red rising wedge; the collapses from rising wedges can be quite dramatic. Traders were far too optimistic and joyful. The VIX is at 17.00. The US 10-year note yield is at 2.42% down a dozen basis points since the Fed circus on Wednesday afternoon. The 2-10 spread is 11.4 bips. The 3-month-10 spread inverts for the first time in over a decade warning that a recession is on tap in the months ahead. The German bund goes negative to -0.03%. After the weak PMI data across the pond this morning, European investors flock to German bunds for perceived safety driving prices higher and yields lower. The euro is at 1.1282. 

Note Added Saturday Morning, 3/23/19: After the Friday selloff, the SPX drops 54 big points, -1.9%, to 2800, sitting on the 20-day MA support at 2799. LOD 2800.47. Bulls held the 2800 psychological level by 47 cents. The S&P 500 will bounce or die from this pivot point on Monday. More downside would be expected due to the neggie d on the 2-hour and daily charts. The 200 EMA on the SPX 60-minute chart is 2781 (this is a key short-term market signal which is now bullish; big trouble for the stock market begins with a failure at 2781). The 10-month MA is 2762 (this is used by many algorithms and old-timer's and would be a last chance level to stop the slide lower; if 2762 fails, stocks are going to continue substantially lower). The 200-day MA is 2755. The 12-month MA is 2748 (this is The Keystone Speculator's SPX 12-Month MA Cross Cyclical Market Signal which currently indicates a cyclical bull market going forward; if 2748 fails, it is over for the stock market). The 150-day MA is 2744 (watch the slope of this line since it dictates the cyclical market pattern; the 150 is flat to sloping lower signaling a cyclical bear market but bears will need price to go sub 2744 to maintain this negative signal going forward). The 50-week MA is 2743. The 50-day MA is 2734. The 20-month MA is 2701. The 100-day MA is 2686. The 200-week MA is 2683 (which needs back-kissed). The 100-week MA is 2654. Thus, the bulls have a chance to save the day and stop the retreat in stocks if they can hold support at SPX 2762-2781. If that fails, the market is in bigtime trouble. If the 2734-2748 support fails, the stock market will likely collapse and bulls will be grabbing at straws praying that the 2683-2701 support will hold. Humorously, you need sunglasses to read the paragraphs above.