SPX S&P 500 Daily Chart; All-Time Closing High; Overbot; Rising Wedge; Negative Divergence; Upper Band Violation

The bulls are unstoppable. Copper failed last week ushering in stock market softness but the dip-buyers were tripping over each other to buy the weakness. Copper then recovered providing the bulls with a happy weekend of Fed wine drinking celebrating the never-ending rise in equities. The S&P 500 prints a new all-time closing high at 2939.88, ending the day and week at the high, but the all-time high at 2940.91 from last September remains in place. The bulls only need a dollar and three cents to print a new all-time high. The internet web site and newspaper headline writer's will enthusiastically cheer the accomplishment if it occurs.

However, technical-wise, the chart is sick. Price prints the higher high after the better than expected 3.2% GDP number. At the end of last year, most analysts expected GDP to be a 1-handle in Q1. Recent estimates came up to the 2.2% to 2.3% range but the 3.2% was a blowout. Digging down in the data, you see the big inventory build due to the US-China trade war. Companies are ordering more parts than necessary worrying about supply-line disruptions. These inventories will have to be used-up going forward. At the same time, consumer spending remains lackluster prone to fits and starts. Imports are lower verifying the potentially lower spending trend.

The Q1 GDP number is usually the weakest of the four quarters so the Wall Street analysts are upping their targets for GDP and the stock market. Analysts and money managers are telling investors to jump into the stock market since the back half of the year is guaranteed to be better. The market Einstein's say there is nothing but blue skies and rainbows ahead. It may be comical in Q3 and Q4 when they remove their rose-colored glasses revealing a rainy day. The GDP popped because of the global central banker dovish intervention (easy money; the world is awash in liquidity) and the US-China trade war (building inventories). This market behavior is a one-off and unprecedented, therefore, analysts, strategists, traders and investors have a hard time discerning (reading) the tea leaves and will likely get it wrong.

All that fundamental mumbo-jumbo aside, the ominous red rising wedge continues displaying itself. The collapses from rising wedges can be epic. Price has violated the upper band for a month now, so the middle band and 20-day MA at 2896, is on the table as well as the lower band at 2846, and rising. Note that price is a whisker away from the upper band again at 2946 which would be a new all-time record. This level must be respected but the chart will likely remain in neggie d.

All the chart indicators are in negative divergence wanting to see price receive a smackdown going forward. It is a broken record commenting on the low CPC and CPCE put/call ratios but it is worth repeating since the price action is very unique. The low put/calls signal uber complacency. Traders are buying stocks without any fear that the stock market will ever go down again. The third year of a presidential cycle is typically up and investors believe the economy will be juiced into the presidential election in November 2020. The central bankers are the market and the Fed, PBOC, ECB and BOJ are flapping dovish wings like madmen.

The ADX has finally showed a strong trend higher for price but the ADX on the SPX weekly chart indicates a weak trend. The green line on the Aroon is pegged at +100 representing maximum bullishness. The red line should be at zero considering that a new record high just printed but it is not.

The expectation for the SPX is down going forward. This may be a significant top right now leading to multiple weeks of downside, otherwise, the SPX will jog back up to the current highs say after a week of softness on the daily chart, and then roll over for a multi-week decline. Therefore, perhaps very important stock market top will print anytime forward say from now into early May. You should likely ditch any long position that you are not willing to hold for many months or years. 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.