Friday, February 7, 2020
SPX S&P 500 2-Hour Chart; Overbot; Rising Wedge; Negative Divergence Developing; Upper Band Violation; Price Extended
The Jobs report is a strong 225K jobs but that would be expected due to the seasonal corrections occurring with a very mild winter in play. There will likely be big revisions in the spring. The construction jobs are strong due to the mild winter. Manufacturing jobs are lost; of course they are since the sector is in a recession but pssstttt, keep it quiet. Wall Street and King Donny will be mad if you say this too loud. The wealthy need time to distribute their shares to the bag holding public and then skate out the back door. Company executives and insiders are ditching stocks at five times the pace that they are buying. Obviously, they understand what is going on at these companies better than you do.
The VIX is at 15.32 above the critical 200-day MA at 15.12 so the bears are winning today. The low put/calls signal a significant top is at hand. The SPX 2-hour is useful in determining where this top is at. Remember, you need to see universal neggie d to know the top is in. (At that last price high where the vertical line is drawn down from, if the MACD was sloping down, neggie d, the top would be in now, but instead it still had some energy).
When the 10 AM EST candlestick printed it was down but note that the MACD line was still long and strong. Therefore, price still has some juice to come back up again for a matching high to likely then place the top. Thus, it was best to wait until noon-time when the next candlestick prints to get a better feel for the top.
The new candle starts minutes ago. You can see that the MACD is not yet neggie d. The bears would benefit if price came up for another matching high, since the MACD would then be sloping down in neggie d, and the top would be in. Thus, the stock market may float higher into the afternoon. The top should be in as soon as price comes up for a matching high (perhaps in an hour or two) at the red dot since the MACD line should then show neggie d and create the smack down.
The stochastics are overbot agreeable to a pullback. Ditto the rising wedge. Ditto the price tagging the upper band so the middle band at 3301, and rising, and the lower band at 3220 are on the table. All indications are bearish. Plan accordingly. The bears should have their turn at smiling going forward. As Steve Harley sings, "Come up and see me, make me smile."
Interestingly, the full moon peaks early Sunday morning East Coast time at 2:33 AM EST. Stocks are typically buoyant through the peak of the full moon each month which may create some lift Monday morning. Earthquake and volcanic activity may ramp up substantially in the coming days since the gravitational forces between the Earth and Moon are at an inflection point. Stay aware in the coming days if you are in an earthquake zone such as near the Taal Volcano in the Philippines. 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 12:20 PM EST: The SPX is down 6 points, -0.2%, to 3340. The Fed is jamming the VIX down to 14.92 to try and save the day. If the SPX came up to 3345-3346 which is only a handful more of points, that will be enough to create the matching price high which would then trigger the neggie d spankdown and identify the top. Keep watching it. The SPX is tired so if the ole gal can even muster up a push higher to 3342 or 3343 that may be enough to call the top and watch her drop going forward. She may simply collapse under her own weight. Remember, the SPX daily chart is also in neggie d. Ditto the weekly and monthly charts. These are special historic and epic times in the stock market boys and girls. If you are new to trading, get out before you lose all your money.
Note Added 1:06 PM EST: SPX 3337. VIX 15.14. The VIX 200-day MA bull-bear line in the sand is at 15.13.
Note Added 5:23 PM EST: The SPX loses 18 points, -0.5%, to 3328. LOD 3322. VIX 15.52. The SPX did not come up for a matching high as yet so the door has to be left open for the stock market top to occur Monday morning. The bears would have been better off to see the SPX to print, say, 3346 around noon time today and that would have locked in the neggie d and the top would be in now. Since the MACD was still long and strong at the last price high, the S&P 500 may receive buoyancy Monday morning to print the matching high the MACD desires. The other scenario is that markets simply fall like rocks on Monday morning and if the coronavirus news is worse, that would sink the market ship. Barring bad news, and perhaps even if a bit of good news occurs, that matching price high may print and firmly identify the top. If the coronavirus news is excessively happy on the weekend, then the SPX will probably pop a lot higher and the charts will need a day or two to price-in that happy news. For now, the top is either in right now or will be on Monday morning. All that is needed is the neggie d on the MACD. Keystone is a poet and he knows it.