The uber low put/call ratios continue signaling rampant complacency and a stock market top near. Thus, it is time to sniff around the daily and hourly charts and see when the top will occur. The SPX prints a new all-time record closing high at 3334.69 on 2/5/20 overtaking the prior record close at 3329.62 on 1/17/20. Interestingly, the S&P 500 did not print a new all-time high the record high at 3337.77 on 1/22/20 continues to hold. Remember the trip 3's and trip 7's? The SPX bottomed at the infamous 666, trip 6's, in March 2009; has it topped out with the 3's and 7's? S&P futures are up +13 about 2-1/2 hours before the opening bell for the regular Thursday trading session. The SPX begins the day at 3335 so that would pump price to 3348 and create a new all-time record high. Perhaps the bears have some tricks planned before the opening bell?
The SPX daily chart (not shown) is in negative divergence across all its indicators but of course the price action is dealing with this obscene upside momentum move. The 2-hour chart is in universal negative divergence as well with the matching price high occurring. This 2-hour chart will receive a new candlestick at 9:30 AM EST and another at 10 AM EST which will shed lots of light on the path ahead.
The neggie d wants to spank price down but note the near-term momentum with the little green lines. When you shoot a projectile into the air, it goes straight up and does not peak and fall straight down, instead it tapers off, and peaks, and rolls over, it has a trajectory, so the momo may need a few candlesticks to burn-off. The RSI is trying to sneak higher so watch that, if it does, then there are likely a few more hours until the top appears. The MACD is neggie d over the last couple weeks but it has that near-term momo. Watch to see if the MACD places a higher high, if so, the top will not occur for a few more hours or tomorrow. If the MACD remains below the level from 2 weeks ago, the top is coming faster.
The stochastics are overbot agreeable to a pullback. The rising wedge is ominous. Price has violated the upper standard deviation band so the middle band at 3277, and rising, is in play, as well as the lower band at 3210. The SPX price is extended to the upside so a mean reversion is on tap going forward. Thus, wait for the 2 new candlesticks and at 10:05 AM EST you will know a lot more and if the top is on tap today or if you have to wait until tomorrow.
Tomorrow morning is the US Monthly Jobs Report. That being the case, stocks may idle sideways today waiting for the BLS tablets to come down from on high which will of course have the wage data boldly etched into the surface. Remember, overall inflation will never come about unless wage inflation is occurring. The Federal Reserve's grand 11-year Keynesian experiment is a failure unable to create inflation although it did serve to make America's wealthy privileged class more filthy rich and set the stage for a violent class war in the US once the recession arrives. It is Our Destiny. Crony capitalism is in the throes of extinction. The rigged game only serves the wealthy class. Payback will be a b*tch.
The demopublican and republocrat political baby games continue. President Trump was acquitted on the articles of impeachment yesterday, however, it did not go as planned. The expectation was for one or two democrats to side with the republicans and vote not to convict Trump while all the republicans would be expected to toe the line for their tribe. The opposite occurs, with all the democrats voting to convict Trump with no defectors and a crossover republican, Mitt Romney, a nemesis of Trump's, also voting to convict. King Donny planned to give a speech after the vote denigrating the impeachment process calling it a hoax and proving this by highlighting a partisan vote. Instead, the vote to convict President Trump is bipatisan (both democrats and republicans (even though it is one)) harpooning Donny's planned talk. 48 senators voted to convict the president on the key article of impeachment while 52 voted to acquit (there are 100 total senators). 67 votes are needed to boot Donny out of office so 19 more were required. Teflon Don beat the wrap.
So Soybean Donny's speech is tossed in the circular file and a new one is written overnight. President Trump plans to speak at noon today EST. No doubt he will continue to call the impeachment a hoax. Regardless, he has the impeachment stain on his necktie for the rest of his life. Trump was dirty-dealing in Ukraine and got away with it, for now, because he prohibited the direct people involved from testifying or providing documents while at the same time saying the case has no basis since it has no documentation or testimony. This is America, baby.
The interesting thing that came out of the impeachment stuff is that all future presidents are now allowed to deal with foreign governments to dig up dirt on their political opponents. Comically, this is what the Founding Fathers specifically wanted to guard against. Yep, the crony capitalism system is rolling over and dying. Humorously, Daddy Trump always covered up for Donny and extricated him from his messes and now the taxpayer takes on that roll.
Trump makes lots of enemies since he hires folks telling the world they are the greatest people available and then he screws them tossing them into the trash can like a dirty rag. Of course these people are waiting for opportunities to screw him back. That is the way it works in America. Romney gave Donny some payback yesterday. In time, the Bolton testimony concerning Ukraine (that republicans prevented from occurring) and other details will emerge, they always do, and the president will have to handle this stuff during the election campaign season. Trump demands 100% loyalty; you must kneel at his feet and kiss his wingtips each morning, if you choose not to, he will insult and denigrate you and tell everyone that you are unpatriotic and hate America. Isn't this junior high school behavior comical?
The democrat presidential nomination process is a fiasco and Iowa has become a laughing stock. It looks like Buttigieg and Sanders are the two winners but neither of these bozo's have a chance against the Trumpster. Donny will eat them for breakfast. A woman is likely the only possible candidate that could beat Trump which narrows the field to Warren or Klobuchar. Rest assured, one of them will likely be on the ticket at least as a vice president.
The women out vote the men in America by about 55% to 45% and the ladies will likely vote for another lady. The female vote could not put Hillary Clinton over the top in 2016 since she was too dishonest and many ladies in their heart of hearts could not bring themselves to vote for someone corrupt. It would be a good time for an independent to rise this year but no one of substance is appearing. Bloomberg runs as a democrat. He's too short. What an idiot. The first test you have to pass to be electable, if a male, is you have to be tall. That's simply the way it works. Bloomberg is conducting a vanity project; you can do that when you are a billionaire, same with Steyer. It would be nice if shorty Bloomberg would take those millions, and the box he has to stand on for the cameras, and help feed the poor in Appalachia and the inner cities instead of making media moguls more filthy rich.
The funniest thing about the political tribal mess in the United States these days, is that very few see the big picture. Many Americans are spending their days cheerleading one political tribe or the other blind to the 900-pound gorilla sitting on the living room sofa which is the beginning of the end of crony capitalism in America. The government will likely morph into a socialist-light type nation over the next decade or two. The rich simply became too greedy destroying the middle class which was the fabric that held the country together. It's all over but the crying now and it cannot be fixed.
The republicans denigrate Romney for his decision placing the Republican Tribe above America. The liberals are the same way giving their Democrat Tribe more importance than America itself. The Republican Tribe is programmed by Fox News, Newsmax, Breitbart and radio hacks Rush Limbaugh and Sean Hannity, while the Democrat Tribe receives its talking points from the major broadcast networks (ABC, CBS, NBC), cable news outlets CNN and MSNBC, and the New York Times and the Washington Post. There is no America anymore; it is now the Republican Tribe and Democrat Tribe. What sicko's, however, it is all expected at the end of a Kondratieff Cycle and as crony capitalism begins taking its final breaths. Everything is entertainment during the bread and circus days. The coming years will be wild.
A stock market top should be near. Once those 2 candlesticks print on the SPX 2-hour chart above, the timing should be able to be nailed down better. The jobs report in the morning throws a wrench (spanner) into the works so stocks may idle today and make the big up or down decision at tomorrow's opening bell once the jobs data is known.
The VIX 200-day MA at 15.10 is the demarcation line between a near-term bull market and bear market. The VIX is currently trading at 15.35 above the critical 15.10 level so bears are fine despite the sharp rally the last couple days. The bulls will prove the stock market rally is real if they send the VIX below 15.10. If the VIX does not move below 15.10, the bears are going to start rolling the stock market over to the downside. 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 8:32 AM EST: S&P +13. VIX 15.09. The VIX is testing the critical 200-day MA right now. Bounce or die. Futures get a lift after China cuts tariffs on some products, however, the total amount of products may be less due to the coronavirus. Traders will want to see that jobs data and the release is now less than 24 hours away. There you go. VIX 15.12. The bulls are fighting to sink volatility but it is difficult for the Fed and the other corrupt central bankers to push the VIX beachball underwater and keep it under. This VIX 15.09-15.11 level is for all the marbles today; nothing else matters.
Note Added 9:31 AM: The SPX prints a new all-time high at 3346.20 today, 2/6/20. The VIX is at 15.20 above the critical 200-day MA at 15.12 so the bulls still have work to do. Stocks will roll over and sell off if the VIX does not move below 15.09-15.12. It is bounce or die time for the VIX and the SPX will move in the opposite direction.
Note Added 9:31 AM: SPX 3339. VIX 15.34. Boooiiinnngg. Volatility pops so that is problematic for the bulls.
Note Added 9:39 AM: SPX 3338. VIX 15.44.
Note Added 9:42 AM EST: Whoopsies, daisies. The SPX and Dow are slipping in and out of negative territory now flat on the day. SPX 3334. VIX 15.62. Volatility pops, so stocks drop.
Note Added 10:29 AM EST: SPX 3338. VIX 15.26. The SPX 2-hour chart has two candlesticks for today thus far and both represent a matching price top and a look at the chart indicators shows negative divergence for the RSI, histo and stochastics but the MACD sneaks out a higher high than two weeks ago. Therefore, price likely needs a jog move to allow time for the MACD to weaken and roll over. That would be a candlestick down, then a candle back up for a matching or higher price high, and at that time, the MACD may be neggie d and identify the top. 2 candlesticks is 4 hours so perhaps this afternoon the top may arrive. When the SPX comes back up, the MACD will tell you if the top is in, or not, and if not, it will be in about 3 hours hence (you need to see neggie d across all the chart indicators as price makes the matching or higher high).
Note Added 10:37 AM EST: SPX 3342. VIX 15.08. The VIX 200-day MA is 15.12.The bulls are cheering and excited that they have broke down through the VIX 15.12 level. Bulls are singing and dancing while drinking PBOC rice wine and Fed whiskey. The bulls win big if they keep the VIX under 15.12 and moving lower. A VIX 14-handle would create an upside stock market orgy. The 2-hour chart above will receive the next candlestick at noon. Bears need the VIX back above 15.12 pronto or they will fold like a cheap suit.
Note Added 10:45 AM EST: SPX 3340. VIX 15.08. The VIX 200-day MA, the bull-bear decider line, is at 15.12. Bounce or die.
Note Added 10:48 AM EST: VIX collapses to 14.98, no, check that, 14.88. The SPX pops to 3344. The bulls erupt with applause and begin stripping off their clothes in joyous celebration. The chorus line comes out from behind the curtain by the snack bar and high kicks their way onto the floor of the NYSE. The upside orgy is underway with investors buying stocks with reckless abandon. Bullish traders buy at the ask and proclaim how lucky they are to effortlessly make money without care or worry.
Note Added 10:55 AM EST: VIX 15.17. Ho, whoa, ho. The bulls jump up off the floor gathering their clothes and running to their computer stations to find out why volatility is climbing. Here come the bears punching back. The fight at the VIX 200-day MA line in the sand at 15.12 continues. Do you think this metric is important? It is obvious by the price action. VIX 15.12 dictates which side lives, and which side dies, today.
Note Added 10:57 AM EST: The VIX is at ..... wait for it ...... wait a bit longer for it .......yes, it is directly at 15.12. Bounce or die for all the marbles. Stocks will move opposite the VIX. SPX 3341.
Note Added 5:03 PM EST: The VIX was spanked below 15.12 after that last message at 11 AM EST and stayed that way during the session ending at 14.86. The VIX has a 14-handle so it was an upside orgy today. The SPX gains 11 points, +0.3%, to 3345.56 a new all-time record closing high and 3347.96 a new all-time record high. The highest print in stock market history, 3348, occurs at 1:06 PM EST. The battle at the VIX 200-day MA at 15.12 continues tomorrow. Stocks are parked at elevated levels because traders are waiting for the jobs data at 8:30 AM EST. The VIX will either continue dropping below 14.86 rewarding the bulls, or, depending on the jobs report, may send the VIX straight up through 15.12 ushering in market negativity. Looking at the SPX 2-hour chart, today's four candlesticks all show progressively higher highs in price. The RSI is flat which is considered negatively diverged, ditto the histo, ditto the stochastics that are overbot; all of these parameters are negative. The MACD line continues to point higher long and strong. Those pesky bulls kept stocks elevated into the jobs report with the long and strong MACD A jog move is needed to roll the MACD line into neggie d so down one candlestick, then up one candle to another slightly higher high in price, and at that time the MACD line should be neggie d, if not, another jog is needed. So stocks should top out in 3 to 8 hours if a jobs report was not on tap. Since this data will impact markets, the top may be in right away. If the MACD line needs a couple jogs to finally show neggie d and call the top, the top may bleed into late tomorrow or Monday before lunchtime. You will be able to forecast this after trading begins tomorrow by the behavior of the 2-hour chart. Also of interest is that the full moon peaks at 2:33 AM EST early Sunday morning. Stocks are usually buoyant through the full moon so perhaps a happy jobs report will buoy stocks into the weekend and Monday morning when the top occurs. The full moon highlights a gravitational inflection point between the Earth and Moon so earthquakes and volcanic activity may greatly increase say tomorrow through next Thursday. It seems a lot of quakes occur on the waning full moon so that would be, say, Monday through Thursday. Good luck to the Filipinos since the Taal Volcano may burp a little bit in the coming days. Walk softly if you are in a quake zone. President Trump pleaded his innocence during his speech today. Of course he did. If you ever have been around the county lock-up, so does everyone there. The democrat presidential hopefuls are campaigning in New Hampshire where no one is excited about the selection. Someone needs to tap Joe Biden on the shoulder and tell him to sit down and take it easy; serve him a slice of pie and hand him the remote. Conoravirus, schmirus. The news is not encouraging but no one cares since they are too busy tripping over each other to buy stocks. The original doctor that reported the virus has croaked. 636 people have died from the virus with over 31K cases confirmed and growing. China is in lockdown. Big Brother is monitoring the population via drones and cameras. Isn't the planet a Brave New World? The beat goes on.
Note Added Friday Morning, 2/7/20, at 4:00 AM EST: The VIX is trading at..... wait for it..... yes, 15.12. The battle at the 200-day MA continues. It is all noise, however, until the US Monthly Jobs Report drops at 8:30 AM EST only 4-1/2 hours away. S&P futures -2.
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