The S&P 500 prints a new all-time record high at 3196.66. It would be interesting if the stock market topped-out at a '666' just as it bottomed at a '666' in March 2009. The PBOC promises to remain flexible and appropriate in setting monetary policy (dovish). China's central bank plans to support and goose the manufacturers and private sector companies. Happy days are truly here again.
The central bankers are the market. The Federal Reserve is also providing ample liquidity through the end of the year. In fact, the money the Fed pumped into the financial system in October is the largest injection in nearly one year; that money buys stocks. All Hail the modern-day Money God's in charge of the Wall Street Temple! Rejoice! Sing Praise! The wealthy dance with glee, smoking expensive cigars, dabbing the ashes on the stupid huddled masses.
Charts can only price-in everything known up to the moment and any new news needs to be absorbed. The SPX 2-hour is shown above since it has been of interest to the readers over the last few days as the top-watch continues. It's not really a true 2-hour chart since stockcharts prints a candlestick for 9:30 AM EST to 10 AM EST, then from 10 to noon, then noon to 2 PM, then 2 to 4 PM. The chart just updated for the noon candlestick.
The PBOC pump boosts global stocks along with happy and optimistic homebuilder sentiment but, as the ole joke goes, when did you ever see a depressed homebuilder? (They are in the business of selling homes so they always have to be optimistic and positive for their potential customers).
The US-China trade deal confusion continues. Lighthizer speaks on the weekend and changes his $40 billion number to $50 billion to match Soybean Donny's ongoing proclamation but he is the one directly involved in the negotiation and should know the number. Trump never likes to look bad. Perhaps it created confusion on China's end since a few hours later the number is now quoted as $40 to $50 billion in ag goods. They are making it up on the fly.
There is no time line or list of the actual goods involved in the trade deal so humorously, what is the deal? Lighthizer repeats what President Trump said about equipment and other items being lumped into the ag number; it is surprising the business media is not reporting on this. Obviously, Trump wants to compare apples and oranges so he can say it is the greatest deal in the history of mankind.
Comically, Treasury Secretary Kudlow is also talking on the weekend and says the translations from Chinese to English and visa versa for the trade deal are not complete as yet, which means the lawyers have not even started looking at the text. Kudlow says it will be a few weeks until a signing would take place and there is no date certain for that. When you get down to it, after a month of hype, the trade deal is about where it has always been; a few weeks away. Lighthizer also hinted that he may tweak a couple things in the deal.
Even funnier, Trump said Phase Two begins immediately but Phase One will not be officially done for several more weeks. This stuff is hilarious. The stock market likes it since Soybean Donny can keep tweeting happy stuff every day saying the final-final imminent super final trade deal is about to occur. It is starting to look like the Godot Trade Deal.
Another plate in the air is the impeachment. The House of Representatives will impeach President Trump this week, Wednesday, 12/18/19, which will turn his orange head red. The Republican and Democrat Tribes are playing their typical baby games. The dirtbag republicans are hiding the president's mistakes in the Ukraine scandal. Trump pressured newly elected Ukraine President Zelensky to dig up dirt on Joe Biden who is likely the president's top democrat challenger in the November presidential election. Trump withheld military aid for Ukraine, that was approved by Congress, until Zelensky would make the announcement of the Biden investigation.
Trump is preventing his top nine cabinet and department officials from testifying on the matter since they are the ones involved. They all either hang together as one, or they may hang (figuratively) separately, to paraphrase Benjamin Franklin. Boiling the Ukraine scandal down into its simple components, Trump could have easily directed the DOJ or other department publically to begin investigating Ukraine corruption and the Biden's. Ukraine would have gladly obliged and everything would have been out in the open from day one. However, Trump would have received a lot of heat from the press and accusations that he is targeting Joe Biden.
Therefore, Donny decided to covertly pursue dirt on Biden to help him win the upcoming election and as the scheme fell apart (Adviser Bolton described the Ukraine situation, which also involved President Trump's Attorney Rudy Giuliani, as a drug deal and said it was a hand grenade that was going to blow up), the military aid was quickly released and the nefarious tracks of the scheme covered-up by the nine co-conspirators. America will never know the truth until one of the group spills the beans.
Chief of Staff Mulvaney already admitted to the nefarious deed in public at the Whitehouse press conference. Bolton will release a book in the future that will shed light on the matter. President Zelensky got screwed. He is a young leader trying to do good for his country but has to deal with the Trump strong arm tactics and reality television drama; it is trial by fire for Zelensky.
The dirtbag democrats are no better than the republicans. Democrat presidential candidate and former Vice President Joe Biden stinks to high heaven over the Ukraine scandal. His son Hunter was on the board of an energy company shoving money into his pockets his only function was allegedly to provide access to daddy. Crony capitalism is on full display daily in America; simply open your eyes and you will see it glaring at you. The political parties are two sides of the same corrupt Washington, DC, coin; demopubicans and republocrats. You do not want to associate yourself with either tribe.
To shed more light on America's ongoing headaches, 50% of Americans want to see Trump impeached and removed from office. 70% say that they think he did something wrong but not all these folks want to see him kicked out of office. Trump's approval numbers remain consistent in the 35% to 45% range, low as compared to other president's, but steady.
A couple-few decades ago, to make things simple, America used to be 40% democrat, 40% republican and 20% independent. That was when the Democrat Party was a proponent for the poor and disadvantaged but now the Democrat Tribe has been taken over by the arrogant West and East Coast progressives that could not care less about the poor just like the republicans. Being an independent 20 and 30 years ago was looked at as odd. Fast forward to the present and now the split is more like 30% democrat, 40% independent and 30% republican. The independents dictate who wins the elections. The women also dictate who wins since they vote about 55% to men at 45% during elections.
Considering that breakdown, it is easy to understand the polls. The base 30% republicans are always for Trump no matter what. In addition, about 5% to 15% of the independents lean in the president's direction providing the consistent 35% to 45% presidential approval rating for Trump that never moves from this range. The 50% in favor of impeachment and removal makes sense since it is all the democrats, 30%, and about half the independents, 20%, which is 50%.
The impeachment numbers do not move much because the distribution of the repubs, dems and independents. For the 70% of Americans that believe that Trump did something wrong, that also makes sense. It is all of the democrats at 30% and the independents at 40% with the republicans only seeing a golden halo above Donny's head. This stuff is not rocket science. President Trump should worry about that statistic (pulled out of the air by Keystone) about most all independents thinking he did something wrong in the Ukraine scandal. When it comes time to vote, independents will have to search their soul about re-electing someone they know is an alleged crook and has the impeachment Scarlet letter tattooed on his chest.
In the last election, the crookedness factor is one of the reasons President Trump won. Voters, in their heart of hearts, especially the women, could not bring themselves to vote for the scandalous lying crook in the pantsuit so they voted for the orange-headed bloviating carnival clown instead. Trump labeled Clinton as "Crooked Hillary." Considering the Ukraine scandal and impeachment, Donny may adopt that moniker for himself going forward. In the November presidential election, Americans may be making a similar decision.
The most interesting thing is that perhaps the so-called 'deep-state', that is actually made up of the establishment democrats and republicans and not just dems as the repubs constantly tout, wants both Trump and Biden to go away and how beautiful it is to take them both out together with the Ukraine scandal. Trump is damaged with the impeachment stain and labeled a crook while Biden and his son are exposed as crooks as well. This paves the way for something else.
The democrat presidential candidate field is weak. If the lefty's were smart, they would pump Amy Klobuchar higher in the polls and set her up for the top spot. She checks the female box, would be the first female president, which the ladies would be inclined to vote for, and she is a moderate, that would bring the independents into her camp. In addition, she is boring, which is something that Americans may want after four years of daily reality television drama and tweeting. The US presidential election is less than 11 months away and the primaries begin in only about 8 weeks. If Trump cannot go the distance in 2020, Vice President Pence would be the likely top man for the republicans on the ticket unless a challenge is mounted.
The 2-hour chart just started to print the new candlestick. Remember, we were in neggie d but the happy China data, PBOC pumping, trade hype, UK election and global central banker backstop provides more stock market life. The SPX prints a new all-time high at 3197.71. You did not think the market makers would allow a '666' print, did you? The stock market is a "Goddess on a mountaintop, burning like a silver flame, the summit of beauty and love, and Venus was her name" as Shocking Blue would sing. Everyday is joy and effortless bullish fun in the stock market.
The stock market is taking on momentum which creates further lift but the 2-hour chart remains toppy. You see this morning's gap-up candlestick, then the 10 AM to noon candlestick, and now the ongoing candle for noon to 2 PM. The MACD line and money flow are trying to squeeze out a sliver more of strength but you can see that the chart remains in universal negative divergence.
The two-leg bull flag pattern is playing out in textbook fashion (green). The first leg was the rally from 3080 to 3150 which is a difference of 70 points. The sideways consolidation flag is formed with price action that moves sideways to sideways lower; pure textbook. The second leg starts at 3130 so the target is 3200 and voila, it's there satisfying the two-leg bull flag pattern.
Keystone's 80/20 Rule says 8's lead to 2's (on the way up) and 2's to 8's (on the way down) so the breach of 2800 opened the door to 3200. The breach of 3180 opens the door to 3220. A breach of 3198 opens the door to 3202. Stocks are topping-out due to the complacency but in the coming days we will see if the SPX can make it to the 3220-3230 level. Price came this far; it is only another 20 points.
The RSI and stochastics are overbot agreeable to a pullback. The rising wedge remains ominous. Price has violated the upper band, look at that parabolic price action running right up the flagpole, so the middle band at 3156.66, is on the table as well as the lower band at 3114. Price is extended requiring a mean reversion lower. it is the same song and dance the last couple weeks. Stocks are toppy and want to retreat but good news extends the fun a wee bit longer.
The RSI is neggie d again over the last couple candlesticks with the higher high in price although as this is typed it is trying to squeeze higher. If the RSI does move higher by 2 PM then that will extend the top for another jog move zero to 4 hours. The MACD line may try to squeeze out another down-up, so a top continues to be expected in here anytime over the next 4 hours which would be this afternoon and bleeding into tomorrow's first half hour of trading. Keep watching the neggie d since it will identify the top. Remember, the low put/call ratios signal uber complacency and today's activity is obviously euphoric. Watch your wallet. 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 1:17 PM EST: The SPX is up 27 points, +0.9%, at 3196 printing a new all-time record high at 3197.71. VIX 11.87. Copper +1.1%. The VIX sports an 11-handle; the central bankers are holding the volatility beachball underwater today so stocks float higher. The RSI is flat-lining currently which would be negative divergence if it remains this way for another half-hour.
Note Added 2:09 PM EST: The new 2-hour candlestick begins for the 2-hour chart a few minutes ago and it begins at the same elevated and record price highs at 3197-3198 so the indicators can be assessed to see if they are in negative divergence. The RSI, histogram, stoch's and money flow are in neggie d. Ditto the MACD line over the 6-week period, however, it is trying to create a tiny bit more strength in this immediate hour-by-hour time frame. The chart should top out anytime forward as long as the central banks and other market cheerleaders remain quiet. The SPX all-time record high remains at 3197.71.
Note Added 2:14 PM EST: SPX 3194. VIX is above 12.00 to 12.02 trying to move higher. 10-year yield 1.89%. Traders are selling off notes and bonds sending yields higher and then using some of that dough to buy equities. Bears that had placed shorts expecting the big pullback ran for cover this morning creating a mini short-covering rally.
Note Added 2:28 PM EST: SPX 3193-handle. VIX 12.08.
Note Added 2:37 PM EST: SPX 3193. VIX 12.15. Copper +1.0%.
Note Added 2:41 PM EST: SPX 3192-handle. VIX 12.14. Bears will need higher volatility if they want to send stocks lower. Bulls will be happy seeing the VIX flatten-out. Interestingly, we are only minutes away from the start of the last of the six 65-minute trading segments for the day that runs from 2:55 PM EST to 4:00 PM EST. There may be interesting price action occurring over the next 10 or 15 minutes as the robots close out the fifth segment and begin the trading programs for the sixth segment.
Note Added 2:48 PM EST: SPX 3194. VIX 12.11.
Note Added 2:55 PM EST: Time to see if the bears got anything. SPX 3193. VIX 12.14. What say you, robots? Typically, about 80%of the issues traded are computerized programs but considering the goofy erratic action these days it is probably closer to 90%.
Note Added 2:58 PM EST: SPX 3192-handle. VIX 12.17. Equities remain buoyant.
Note Added 3:01 PM EST: SPX 3193. VIX 12.15. The bulls are saying nothing to see here, move along, move along.
Note Added 3:43 PM EST: VIX spikes to 12.33. SPX 3192.
Note Added 3:45 PM EST: VIX spikes to 12.35 but stocks remain buoyant. SPX 3193.
Note Added 3:46 PM EST: There she goes. SPX 3191. VIX 12.40. There is only 14 minutes of trading remaining in the session. The uber important Housing Starts are released in the morning. Stocks remain supported.
Note Added 6:39 PM EST: The SPX finishes the day up 23 points, +0.7%, to 3191.45 a new all-time closing high and 3197.71 a new all-time record high. Sound the Seven Trumpets! VIX 12.14. Copper +1.1%. UTIL jumps +1.2% a huge plus for bulls. Utilities move higher despite the higher yields. The SPX 2-hour chart remains in negative divergence so a top should be in now or anytime ahead, say, by tomorrow lunchtime; this should be plenty of time for the MACD to roll over lower. S&P futures are down -3.
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