The S&P 500 prints an all-time record high, the highest number in history, at 3127.64 on 11/19/19 and all-time closing high at 3122.03 on 11/18/19. Sound the Seven Trumpets!
Stocks rose last week on the happy US-China trade talk and of course the global central banks collude daily in the background always guaranteeing that the globe remains flush with liquidity. The uber low put/call ratios, subdued VIX, massive short volatility positions and universal consensus that stocks will rally through year-end may conspire to create stock market sadness. A lot of the negative energy, however, is getting burned up on the daily trade news happy hype; the bears cannot get any traction to the downside and in the process lose a few of their magic beans.
The SPX weekly chart has overbot stochastics and near-overbot money flow which are agreeable to a pullback. The red rising wedge pattern is ominous since the collapses can be dramatic and considering the longer-term nature of the chart, the drop from this wedge could easily be epic. The chart indicators are in neggie d (red lines) as price printed the record high last week. The MACD and money flow are trying to squeeze out some more upside juice on this weekly basis (tiny green lines) but even if they succeed, it would only be a week or so of sideways stuff. With the Thanksgiving holiday upon us, perhaps that is the idea.
The US stock market is closed on Thursday for the Thanksgiving Day holiday. Keystone needs his figgy pudding. Friday is an early close for the stock market. Stocks are usually buoyant around the holiday in thin trading, however, with markets printing epic history, anything can happen. The new moon peaks on Tuesday morning at 10:05 AM EST East Coast time, the darkest time of the month, and stocks are usually weak moving through the new moon. Covert military raids will be conducted under the protection of this darkened blanket.
The black night could lead to a Black Monday or Black Tuesday a la the market crashes of yesteryear. The stock market is poised to perform this type of negative deed if the trade deal happy talk would stop and/or confidence would be lost in the central bankers.
Speaking of black days, the day after Thanksgiving is Black Friday. This is one of the largest shopping days in America and when many folks begin their Christmas and end-of-year holiday shopping. Black Friday used to consistently be the top retail sales day each year but starting a couple decades ago, buying patterns shifted and consumers tend to now buy more on the Saturday and Sunday before Christmas.
The big US shopping day is called Black Friday because that is when 80% of the US retailers go from red ink on their balance sheets to black ink. When you are "in the red" or "bleeding red ink" that means your company's numbers do not look good and the place is headed for bankruptcy. "In the black" means you are a profitable and successful company selling products and services and making payroll with a little bit left over to keep expanding and growing the business. Companies are relieved when they "get into the black" and greatly depend on the American consumer coming out to spend a lot of money at this time of year. Will they spend this year? Or is it a holiday season where everyone receives homemade cookies in a tin? Ebeneezer Scrooge mutters, "Bahh, humbug."
The ADX shows the strong upward trend in place during 2017 into 2018 but it petered out. Price printed another high in September last year but that only served as the jumping-off point for the waterfall crash. At the start of this year, the ADX was just turning higher above 30 to verify that the big selloff was a strong downside trend but the central banks would have none of that. The central bankers step in to save the day acting in collusion for at least the last 7 years. On 1/3/19, the stock market was toast. Keystone described the carnage at the time. Price was going to take out the Christmas Eve low and when that happened, it was ovah, as they say in Brooklyn.
The 1/3/19 panic caused the four horseman of the central banker cabal, the Fed, BOJ, ECB and PBOC, to intervene in markets. The central bankers orchestrated the non-stop easy-money jaw-boning and policies in January and February to save the day and create the orgasmic rally in global stocks this year. Note that for the historic new highs in the stock market, the ADX is down in the cellar with an 11-handle telling you that the upside is NOT a strong trend. Central banker money-printing and financial engineering are the life-blood of global stock markets.
One thing is for certain, it is a parabolic rocket ship ride for the first 6 of the last 7 weeks from 2850 to 3128, a big 278 point rally, +9.8%. Wow. That's big-time. The trade deal happy talk and most importantly, the power of the central bankers, overcome all negativity.
The Aroon red line is pushed into the ceiling at one hundo with nowhere to go but down which is bearish while the green line is down in the basement with nowhere to go but up which is bearish. Watch for the potential negative Aroon cross which will tell you it is game-on for the bears and game-over for bulls.
Price is extended above the moving averages needing a mean reversion lower. The S&P 500 has tagged the upper standard deviation band (pink) so the middle band and 20-week MA at 2990, and rising, is on the table and the lower band at 2850. The weeks and months ahead will be interesting.
Keybot the Quant is on the short side but champing at the bit to go long. Copper is the key to market direction these days so 'as copper goes, so goes the market'. Copper futures will tell you the market story ahead. The US or China may release happy trade talk news between 4 PM and 6 PM EST today to pump the Asian and US stock futures higher.
The SPX weekly chart is poised to roll over and collapse. The tiny bit of juice with the money flow and MACD may squeeze out a week or so of sideways, which will get us through the Thanksgiving holiday into the first week of December. A top would be expected then, or sooner, like now. Tax-loss selling usually hits its maximum the first and second week of December so this may create a slight negative tail wind favoring the bears. 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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