SPX S&P 500 Daily Chart; S&P 500 Prints New All-Time Record High at 3085.20 and All-Time Closing High at 3078.27; Shooting Star; Overbot; Rising Wedge; Ascending Triangle

The SPX prints another new all-time record high at 3085.20 and new all-time closing high at 3078.27 on Monday, 11/4/19 (neon green squares). The Dow Jones Industrials join the party overtaking their July highs to print new all-time highs. Of course, the Nazzy indexes also print new all-time highs.

Yesterday is a Shooting Star candlestick. It's been a while since one of them printed. You have to listen to some Bad Company in honor of that candlestick. The shooting star typically appears at or near the end of a rally and is a bearish reversal signal. The open, low, and close are at the same general level with the HOD above creating a long candlestick shadow, over two times the length of the actual body, like yesterday.

The LOD is 3075 well below the opening price of 3079 which is a more bearish signal. The close at 3078.27 is below the opening price of 3078.96 a more bearish signal for the shooting star albeit the close is only 69 pennies below. The bulls were euphoric with traders chasing the upside with reckless abandon but this joy dissipated as the session played out. The 3085 is now considered as strong resistance.

Of course, the next day or two will show if price follows-through to the downside or if more happy trade talk news and central banker dovishness continues the stock market rally. The shooting star shoots the market in the leg. We will see if the stock market now falls down the basement steps or if it limps higher ahead after stuffing trade deal gauze into the wound. The trading volume for the big rally is not impressive.

Traders believe the stock market party will never end. It will and it is about to judging by the uber low CPC and CPCE put/call ratios. The CPC plummets to 0.65 not seen since the January 2018 top and subsequent market crash. Nobody expects stocks to go down (so they will).

In the SPX daily chart above, price is running higher into the blue rising wedge pattern which is bearish. The stochastics are overbot agreeable to a pullback. The red lines show universal negative divergence (bearish) across all chart indicators in the multi-month time frame for the daily chart although the green lines show the near-term momentum with the RSI and MACD. This behavior may be able to jog price at these elevated levels for a couple days, but, as previously mentioned in another post, the neggie d across the 2 to 5 month period is hanging over the stock market's head. The bulls need the RSI and MACD to move above the July highs to prove that the stock market will rally into year-end.

The green ascending triangle is a bullish pattern with vertical side at 2735 to 3025, a difference of 290 points so the breakout from 3025 targets 3315. Isn't that something? Bears had better hope that this several-day rally on trade deal hype will be short-lived and that stocks reverse quickly. A longer term rising wedge pattern, which is bearish, remains in play over the multi-month period; you can scroll back to a previous chart to check that out. The market has a lot of cross-currents occurring now. Investors are likely asking themselves how long this phony central banker-induced stock market rally can continue; 11 years is a long time to goose the markets.

Keystone's 80/20 Rule says 8's lead to 2's so this 3080 level is critical. A close for a day or few above 3080 says 3120-ish is highly likely. Bears have to hold the line at 3080-3085 or equities are going to take another big leg higher. The out-of-hand euphoric complacency and fearlessness in the stock market says this will probably not happen and stocks should roll over at anytime, any day ahead.

Price came with in a few dollars of the upper band at 3091 so the middle band at 3000, which is also the 20-day MA, and rising, is on the table. It is 18 days since the SPX has back-kissed the 20-day support so this is in play. Price may want to come down to back test the top trend line of that triangle as well, the 3025-ish level. Thus, with the middle band coming up from 3000, there may be a confluence that forms at 3025-ish that will pull price down to here as a first test when stocks roll over due to the rampant complacency.

The Keybot the Quant algorithm, Keystone's proprietary trading model, remains on the long side since 10/9/19. The quant continues to track commodities,copper and retail stocks as key parameters most impacting stock market direction currently.

Yesterday into this minute, stocks and futures are trading higher as volatility trades higher, so one of them is wrong. S&P futures are up +7 and the VIX is above 13 to 13.03. Perhaps we find out today if stocks print more new record highs and the VIX collapses to a 12 and 11-handle, or, if the VIX continues higher to a 14-handle as stocks fall apart to the downside and the rampant complacency kicks equities in the teeth.

Note that the ole Wall Street adage about triple-tops held true this time; "There is no such thing as triple-tops." This time there wasn't; price came up for the third top and then broke out higher nullifying the triple-top. If you are contemplating selling some of your stocks, "Sell, Mortimer, sell!" Flip them short. 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.