The SPX 2-hour chart is topping out. With the price highs on Friday, you can see the chart indicators all negatively diverging (sloping downwards signaling that price is out of gas to go higher), the overbot conditions and the red rising wedge conspiring for a spankdown. Ditto the upper band violation from earlier in the week that continues to want price to seek the middle band, now at 2874 and rising, and the lower band at 2852 and rising.
That upper band is only 3 points away so it must be respected. The S&P 500 may kiss the upper band again before retreating. The blue lines show a two-leg bull flag chart pattern the first leg from 2730 to 2855 which is 125 points. The second leg begins from 2790-ish which targets 2915. The HOD Friday was 2893 the high for the year.
President Trump is touting the US-China trade talks and each tweet or verbal proclamation results in a bump higher in the spoo's. Charts can only price everything known up to the minute. Once the president makes news, the charts have to price in that announcement.
The new moon peaks for the month yesterday so the stock market would be expected to be weak moving through this period so Monday will be interesting. The new moon monthly seasonality was trumped by Trump. Price is extended above the moving averages so a mean reversion lower is needed. The chart is set up for the market bears to growl.
That RSI is trying to poke out a wee bit more joy; it will do so if Trump touts more happy talk this weekend or if the central bankers coo dovishly promising to print more money to enrich the privileged elite class that own large stock portfolios. If the RSI pokes out a high, that will only extend the top by 2 to 4 hours so stocks will top out say Monday afternoon or on Tuesday morning instead of early Monday. Any further upside would target the 2896-2915 zone but this would be short-lived if it happened due to the neggie d.
The SPX daily chart also remains in neggie d so barring any happy news announcements, the stock market is set for a multi-day tumble beginning now. Keystone also continues to highlight the uber low put/call ratios signaling bigtime complacency. No one expects the stock market to pull back to any great extent so it is extremely likely that the stock market will pull back to a great extent.
The SPX weekly chart previously posted shows a little more upside juice available. Thus, the SPX will likely drop for several days forward perhaps a week or so, then recover again back up to new highs to satisfy the weekly chart and perhaps tag 2900 to make the two-leg bull flag pattern happy. The stock market is likely to print a significant multi-week top this month or early in May which will usher in many weeks of downside. 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.
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