SPX S&P 500 Daily Chart; Fibonacci Retracements; Rising Wedge

Yinz recall the prior Fibonacci chart that showed the battle occurring at the 50% retracement at 2780-ish and battle for the 50-day MA now at 2741 and dropping. Price pokes up through the 50% Fib so the 62% Fib retracement at 2926-ish is on the table and the SPX did not look back after it overtook the 50-day.

Price moves higher to test the 62% Fib resistance and bumps its head on that ceiling and receives a spank down due to the neggie d with the indicators (red lines). The two matching price highs occur 3 and 4 days ago as the indicators universally negatively diverged creating the smackdown. Price hits the bottom rail of support of the triangle and bounces. The SPX comes up yesterday to fill that gap left behind. Technically, there is no reason that price has to move higher (although there are gaps above, especially 3300, that will need to be filled at some point in the future; it could be days and weeks or months and years for those gap fills to occur).

Remember, the SPX monthly chart printed a Tweezer Top and received the February-March spankdown on universal negative divergence across all chart indicators. "It's ovah," as they say in Brooklyn. The monthly chart indicates that a significant long-term (think months and years) stock market top has printed. Interestingly, the negative monthly chart was already in place as Keystone described during 2019 into the early 2020 top, and the coronavirus (COVID-19) serves as a negative catalyst. The stock market would have collapsed anyways, due to the technicals, after 11 years of central banker largess, and the ongoing virus tragedy can only point to an even worse outcome for the economy and markets; a modern-day Dustbowl. There goes a tumbleweed. History rhymes.

Markets remains choppy and erratic, whipsawing to and fro day after day, chewing up bulls and bears alike. The SPX has comically changed its daily direction 21 times in the last 31 days (since the March bottom). You want to spend more time watching than trading in these markets due to the choppy action which wreaks havoc on algorithms and trading robots. Some investment houses simply pull the plug on their algo's in this environment. If you are trading a lot in these whipsaw markets, your portfolio is like a bar of soap, the more you handle it the smaller it gets.

Stocks are very news-driven considering the ongoing coronavirus (COVID-19) pandemic. If there is positive news, stocks receive a lift, and conversely, negative news sends stocks immediately lower. Obviously, the top positive news, as it has been for the last 11 years is the Federal Reserve printing money like madmen to keep the stock market elevated and take care of America's elite class (that own large stock portfolios). The obscene fiscal and monetary stimulus in recent weeks creates stock market joy as America descends into a second Great Depression. Such is the crony capitalism financial system.

If stocks are pumped higher on happy virus talk, price has to first pop through the 62% Fib resistance at 2926-ish. That will immediately send price to the resistance confluence formed by the top rail of the wedge and the 200-day MA at 3004. Thus, stocks continue with a downward bias but if the coronavirus situation improves, the SPX may make another run higher. If this occurs, the daily chart will likely be in neggie d again, so another spank down will occur from the apex of the wedge and that will be substantial. Remember, the collapses from rising wedges can be quite dramatic. So, down from here, or, if a pop occurs on happy virus talk and price seeks 2926-ish again, or perhaps staging a push to 3004, stocks should reverse hard from either of these resistance levels.

There is a lot riding on the restart of the US economy including the presidency. President Trump is all-in with the restart. If it goes well and there is not a substantial increase in virus infections or death, Donnie will be a hero and his path to reelection is probably a given. If, however, the infections spike, and it stalls the economic restart, which will utterly destroy confidence, King Donnie will be looked at as the court jester that cannot manage himself out of a paper bag and his road to reelection will be rocky at best. Donnie is rolling the dice, that he kept from one of his bankrupt casinos, and your life and livelihood is on that felt-covered craps table. The tumbling dice are in motion as the economy restarts.

The US Monthly Jobs Report is Friday morning so stocks may stumble sideways until the BLS brings the tablets down from on high and tells global traders how to trade. This is likely the pivot point. Bad job news is expected so it will all be about if the numbers beat or disappoint and by how much. S&P futures are up +26 points about 3 hours before the opening bell. The full moon peaks for the month tomorrow morning at 6:45 AM EST and stocks are usually bullish through the full moon. 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 Saturday, 5/9/20: The SPX ends the week at 2930 at that 62% Fib retracement level, spending the weekend deciding what direction to choose.