SPXA150R Percent of Stocks Above the 150-Day MA and SPX S&P 500 Daily Charts

The new week of trading is set to begin in the States which kicks off December trading. The bulls, with the help of the Fed and other central banks, are driving volatility lower this morning to pump the S&P futures up +12. VIX is down marginally to 12.59. Futures started to ramp higher after the European markets opened at 3 AM EST. Interestingly, copper was up +0.3% to +0.4% overnight but now slips to +0.1%. Commodities and copper are the main parameters controlling broad stock market direction these days.

On the political front, dictator Xi must be going ballistic behind the scenes. President Trump had no choice but to sign the Hong Kong bill supporting the demonstrators since the majority support from both parties in Congress would overrule him. Xi warned the United States for the last five months not to meddle in their domestic affairs but it occurs anyway.

The impact of the Hong Kong bill, however, has steam coming out of Xi's ears. The relationship between Xi and Trump is likely permanently damaged. After Trump signed the bill, which he attempted to keep as a low-key event, the Hong Kong demonstrators began waving the US flag in the streets. In addition, thousands of protesters march to the US consulate to thank the United States for their support. Xi must be livid. Good. He's a filthy communist. Global traders wait for China's retaliatory response against the US for signing the Hong Kong bill.

Economic data out of China overnight is positive showing a slight pick-up in growth. The stimulus programs from the PBOC provide the growth. It is the same in the US. Everyone becomes all excited about encouraging economic data proclaiming that a sustainable recovery is now underway and the all-clear has sounded.

However, after a quarter or two passes, the central bank stimulus wears off and the data droops. These few-quarter central bank-induced cycles have been going on for a decade (since the Federal Reserve started this ongoing sick Keynesian money-printing financial experiment with QE 1 in March 2009) and it is comical to see the learned analysts continually pretend that the growth is real. It is only growth created by another central bank sugar high that wears off after a while. These cycles continue as long as investors and traders have confidence in the central banks. When that is lost, all will be lost.

Today is Cyber Monday typically the biggest, or one of the biggest, internet shopping days of the year. People go to work today but sneak time on their computers for shopping while the boss is not looking. Employers realize productivity will be low in December. The Christmas holiday is 12/25/19 on a Wednesday, mid-week, like New Years. There will be very low productivity, and lots of goofing-off, at US companies during the back-half of December with the holidays landing on hump day. Black Friday retail sales were weak at the malls but robust online. Small-Business Saturday occurred on the weekend. The American consumer (women perform over two-thirds of the buying in the US) is carrying the economy on her thin shoulders.

Tax-loss selling will peak over the coming days which may create negativity in the stock market. The new month begins so new money may enter the market counteracting the tax-loss selling.

The red circles in the SPXA150R and SPX charts above mark the tops over the last year. The tops all occur within days after the SPXA150R peaks. February is a 91 point drop, May a 220 point drop, August was a 198 point drop and September lost 164 handles. The average pullback is 168 points. Throwing out the largest and smallest is a 181 point average drop. What do you think will happen?

The Friday high for the SPXA150R is 77.35-ish so keep an eye on this. If stocks rally today and the SPXA150R moves higher again above 77.35, the bulls will continue the top for a few more days. If the SPXA150R cannot move back above 77.35, the top is in, and correspondingly, the top is in for the stock market. 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 4:44 AM EST: S&P futures +11. VIX 12.64. Copper +0.1%. Gold 1456. Silver 16.93. 10-year yield 1.83%. Yields are moving higher.

Note Added 8:35 AM EST: S&P futures flat. Dow +6. Nasdaq -8. Russell +2. VIX 13.12. Copper -0.5%. Gold 1465. Silver 16.82. 10-year yield 1.83%.