SPX S&P 500 2-Hour Chart; Overbot; Double-Top; Rising Wedge; Negative Divergence

Here is the SPX 2-hour so you can see the progression of the chart the last couple days. Reference back to the previous post. The red lines show the negative divergence top that was forecasted and it appears (red arrow). The neggie d spankdown occurs but as always, either the Federal Reserve, other global central bankers, or the US government will announce plans for more stimulus to goose markets, or say a vaccine looks good and bingo, stocks pop. The latter took place yesterday to create the double-top, or M Top.

Since price was negatively diverged on that first top, there was no reason for price to come back up. The only thing that could change this was happy talk and the vaccine news came just in time to pump equities back up so the chart adjusts for the new information. However, the balloon still has that pin-hole leak that keeps getting larger and the entities listed above are going to have to keep pumping with more money faster. Pump it! Pump it, pump it up.

So the vaccine pump bring the SPX price back up to the prior top. The maroon lines show price printing matching or slightly higher highs but the chart indicators remain neggie d. The blue rising wedge pattern is ominous; it is a guillotine ready to slice bull's heads off. Price will likely collapse and seek one of those landing zones at price support.

The stock market (SPX) has bounced though 3000-3200 for the last month or more. This occurs while the stock market complacency and fearlessness remains at record levels (a top is expected due to the rampant bullish euphoria). It is time for the stock market to give up the ghost. It is all systems go for another neggie d smackdown as per the maroon lines, overbot stochastics, double-top pattern and rising wedge pattern. The ECB rate decision drops in a couple hours which may change the picture but currently S&P futures are -28 with the VIX at 29.16 so the sogginess is already creeping in. Can Madame Lagarde save the day?

The S&P 500 is trying to turn positive on the year above 3231. Yesterday, price runs to a HOD at 3238 but the bull cheers turn to jeers as the SPX slumped back over closing at 3227. Stocks are usually bullish from a Tuesday low to a Wednesday high during OpEx week and it was textbook this month. This is the top so now we see what the bears got. The only thing that can reverse course (sending stocks higher again) is positivity from the ECB or other happy stimulus talk from the Fed or Congress.

It is interesting that, when you think about it, earnings will not be returning to pre-covid levels anytime soon, so what justifies the upward move in stock prices? At best a sideways move would be expected. If earnings do not pick up until mid or late next year and 2022, stocks would likely not be justified in rising until next year. It is also interesting that there are not as many earnings downgrades as you would think with earnings season underway. The confessional season was somewhat quiet. Some analysts say the lack of earnings revisions indicates that a positive upside is likely ahead. Instead, looking at it Occam's razor-style, there are likely not many earnings revisions and changes since company executive and analysts are all flying blind not knowing what is around the next corner.

This top occurs on the 75-year anniversary of the Trinity Test. These were the first successful tests of the atom bomb ushering in a brave new world and the Atomic Age. J Robert Oppenheimer was brilliant and credited as the 'father of the atomic bomb'. Oppenheimer was fully aware of the seriousness and sadness of what he had developed. He was an expert at reading ancient Indian Sanskrit and he borrowed a phrase he had learned from these writings after the Trinity Test. Oppenheimer said, "Now I have become Death, the Destroyer of Worlds." The Trinity Test occurs exactly 75 years ago to the minute as this post is written. 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 6:34 AM EST: The ECB decision is an hour away. Lagarde is wiping powdered sugar from her fingertips as an aid adjusts her hair. Hopefully, she does not make a statement such as Oppenheimer's during the presser. S&P -25. VIX 29.08.

Note Added Friday Morning, 7/17/20, at 4:58 AM EST: The stock market remains buoyant with all the pumping this week. The vaccine pump, the Lagarde pump, Fed pump and Trump pump overnight where a payroll tax cut is promised for the next stimulus package. The stock market should roll over here. Bulls need more happy talk to keep stocks buoyant into the weekend. UTIL needs to move above the 828 palindrome for stocks to rally next week. If UTIL ends today sub 828, there will be trouble next week.

Note Added Saturday Morning, 7/18/20: The SPX ends the week at 3225. UTIL is at 828. The stage is set for theatrics and drama next week. The SPX hourly and daily charts remain negatively diverged, the top is in, however the pumps continue. Treasury Secretary Mnuchin is next to climb on top of the stock market and he is pumpin', pumpin', pumpin', promising to provide more stimulus for small businesses and the government may forgive some loans. Everyone loves to be Santa Claus (handing out other people's money not their own). Congress is back on Monday when the new stimulus bill will be at the top of the agenda so that anticipation is pumping the stock market's leaky balloon with hot air to keep it inflated.