Thursday, November 7, 2019
SPX S&P 500 2-Hour Chart; S&P 500 Prints Record High at 3097.77 and All-Time Closing High at 3085.18; Overbot; Rising Wedge; Negative Divergence; Upper Band Violation; Price Extended; Mini Flash-Spike
The low CPC and CPCE put/call ratios say the stock market top is in for the near-term. Now it is time to figure out exactly whee the top is at; what minute, or hour ahead? You see the gap up move this morning on the US-China trade deal hype.
Price makes a matching or higher high for all three 2-hour candlesticks today thus far and all the chart indicators are negatively diverged wanting another spankdown. The good news on the trade front this morning is all priced in already. The bulls did not get much bang for the buck. The RSI and stoch's are overbot agreeable to a pullback. The red rising wedge is a bearish, and ominous, pattern. Price is extended above its moving averages needing a mean reversion lower.
The SPX tagged the upper standard deviation band last week so the middle band at 3075 and rising remains on the table as a first downside target. The stock market is ready to fall over but it won't. Go up and blow on it; that may be all it needs to collapse.
The SPX flash spikes at 11:58 AM EST from 3090 to 3097.77 a new all-time record high, then promptly retreated. It was a mini flash spike and flash retreat for stocks. These are epic times for markets that will be written about for decades to come.
The chart says Goodnight Irene, Irene goodnight, as long as there is no further trade news hype. The daily chart remains neggie d across the multi-month period wanting stocks to roll over to the downside but the near-term momo on the trade deal hype keeps wanting to extend the party for a day or two more (on the daily basis). The whole shooting match should fall apart at anytime. 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 12:44 PM EST: The party is in full swing with the highest number in stock market history printing only 46 minutes ago during the flash spike. Bulls are drinking Chinese rice wine buying stocks without a care in the world. The SPX is up 16 points, +0.5%, to 3093. HOD and all-time high is 3098. LOD 3087. VIX 12.59. The 10-year yield is 1.97%. Holy smokes. That is a breakout higher. Wow. 16 basis points. They are carrying traders out head-first that were long bonds. So some of that money leaving Treasuries sending note and bond prices lower and yields higher is floating into the stock market helping to maintain elevated equity prices. That move in the 10-year is a huge event. TLT crashes -4.3% this week while TBT is up almost +9%. Copper is up +2.4% today on the trade news happiness.
Note Added 12:59 PM EST: SPX 3095. VIX 12.55. Commodities and copper rally higher on the trade deal hype. It is interesting to ponder that the SPX 3098 number may be the highest number the stock market prints for the next several years ahead. Well, if that is to be the destiny of the stock market, in conjunction with negative divergence in charts across all time frames, so be it, however, humorously, let's wait and see how today plays out first. If you are a young person, stay away from the stock market, otherwise, you will lose all your money over the next couple years.
Note Added 1:06 PM EST: SPX 3092. VIX 12.60. The SPX printed its infamous low at '666' in early 2009. Is the '777' a hint that the top is in late 2019? SPX all-time high 3097.77.
Note Added Friday Morning, 11/8/19, at 3:24 AM EST: That flash spike occurs when the Whitehouse agreed with China's news that tariffs would be rolled back after the phase one deal is signed. President Trump was quiet about China's claim that tariffs would be reduced from here forward until 11:58 AM EST when the Whitehouse agreed with China. The SPX popped 8 points in one minute on the news to the all-time high at 3097.77 but then retreated to close out the Thursday session at 3085.18 a new all-time closing high a +0.3% gain. This advance is tame considering the block-buster trade news. Trump gives up all his leverage if he agrees to reduce tariffs here forward. National Economic Adviser Larry Kudlow says the rollback of tariffs is contingent on the phase one deal occurring if it occurs. This creates slight sogginess in the overnight futures. Today we will see what the bears got, if anything. The charts want to see the stock market retreat but King Trump stands ready to tweet happy trade talk news on the slightest sign of weakness in equities. The CPC collapses to 0.66 and CPCE is down to 0.54. Traders and investors are drinking Fed wine and tariff-free whiskey buying stocks fearlessly. Everyone is complacent expecting the big stock market rally party to continue into 2020 so there is no need to buy put protection or hold any short positions. Everybody and his bro are long the market. The bears have all left town and given up. The low put/calls signal that a significant stock market top is at hand. The market antics are comical nowadays since it has the feel of the dotcom bubble top. Back then Webvan and Pets.com were the two hottest new stocks but this garbage actually signaled the top in the market. In the present, we have Uber, Lyft, Airbnb, WeWork, food delivery businesses and lots of other goofy enterprises, many only function properly during a robust economic time. The recession will wipe them out. The ride-sharing companies are a joke since any driver with half a brain would simply build his own client list and deal directly with the person that needs a ride especially a standard weekly ride somewhere. WeWork is a complete joke but congrats to that young guy that stuffed Softbank and other large institutions. He sold them a bag of hopes and dreams and exited stage right. As the recession begins, WeWork will be crushed. The only reason young people go there is not to work but to find dates. Keystone remembers what it is like to be young. The guys are eyeing all those pretty young ladies sashaying to and fro jiggling their cafe lattes. The girls are not so innocent pretending not to eye up the fellows but that is why they are there at WeWork. Ahhhh, youth. Humorously, maybe as WeWork falls apart, they will change their locations to dating spots for young folks and call the company WeDate. Softbank is a joke. It's Vision Fund is blind in one eye and cannot see out of the other investing in any hair-brained start-up that comes down the pike. Softbank is reminiscent of Enron during the dotcom bubble. Enron was an energy company getting involved with all kinds of businesses like entertainment, home goods, all kinds of goofy stuff. Enron imploded exacerbating the dotcom crash and aftermath. Softbank, and its major institutional investors, may face hard times going forward.