Monday, February 10, 2020
SPX S&P 500 Weekly Chart; SPX Prints All-Time Record High at 3352; Overbot; Rising Wedge; Negative Divergence; Price Extended
The SPX prints a new all-time high at 3352.26 and new all-time closing high at 3352.09 on Monday, 2/10/20. The band is playing late into the evening with traders and investors drunk as skunks singing songs and carryin' on. Irving Fisher's casket was exhumed today. The gravedigger's opened the lid, Irving sat up, pointed his bony index finger to the sky and exclaimed, "I think the stock market is at a permanently high plateau and we never have to worry about stocks going lower ever again."
The SPX weekly chart prints the record high with universal negative divergence across all indicators (red lines). A spankdown is on tap on the weekly basis. Note, however, that the MACD line is pointing ever so slightly higher in the near-term. Watch that closely. Since the week just started, that candlestick is in progress and so are the end points of the chart indicators. If stocks begin selling off, which is expected, that MACD can come down a touch and display neggie d against the price high which would signal that the selloff will be longer and more substantive. The red rising wedge is ominous. Remember, the collapses from rising wedges can be quite dramatic; price typically jumps off a cliff from this pattern.
The smackdown off the top should last for several weeks. It can start right away, which would be in sync with the daily and hourly charts, or the bulls may play around a bit more and try to keep stocks elevated for a few more hours or day or two especially expecting Federal Reserve Chairman Powell to speak dovishly before Congress this week. The central bankers are the market.
The expectation is for the stock market to begin selling off now. If there is negative news overnight or some type of negative catalyst, stocks and futures will likely be flushed down the toilet quickly since it would kick the neggie d into high gear. Barring any happy talk from the Federal Reserve, other global central bankers, or President Trump and his henchmen, stocks are set to start tumbling lower. Watch that MACD line closely. 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 on Sunday, 3/15/20: The SPX crashes from the all-time record high at 3393.52 on 2/19/20, to a low at 2478.86 on 3/12/20, last Thursday; a dramatic bloodbath of 915 points off the top, -27%, into a bear market in only 16 trading days!!! That is a record that President Trump does not appear to be touting. The 18-year secular bear cycle is growling; it should have ran from 2000 to 2018, finishing up a couple years ago, but is right-translated into this year (sharp upside cyclical rallies such as 2003-2008 and 2009 to present are very common within secular bear patterns). The secular bull cycle will begin at some point over the next year or two (it should have started in 2018 running to 2036 but is likely delayed because of the decade of obscene Keynesian intervention by the Federal Reserve) sending stocks to epic highs in the years ahead but it will likely be under a devastating hyperinflation scenario (your purchasing power will be in the toilet even though stocks and houses will be highly priced). First, remaining in the here and now, we will likely deal with some more deflationary fun ahead. Most analysts and strategists still don't get it. The world has a demand problem going forward which will be difficult to stimulate. A deflationary spiral may kick in once consumers realize that if they keep waiting to buy something, it will be a little bit cheaper next week. The Fed fears deflation more than inflation and Chairman Powell is unable to sleep the last couple months worrying about a potential deflationary spiral; simply look at Japan stuck in a disinflationary and deflationary quagmire for over two decades!. As Keystone always refrains, "the collapses from rising wedges can be quite dramatic." It was.