SPX S&P 500 2-Hour Chart

The SPX stumbles sideways through 3000-3200 for the last month and tests the high end of the range right now with price currently printing 3217 with the VIX at 28. Both the VIX and stocks are up so one of them is wrong. The SPX and VIX move inversely over 90% of the time.

The SPX 2-hour is setting up with negative divergence. Price gaps higher at the opening bell obviously a higher high than early July's high and the red lines show the universal negative divergence across all indicators. The RSI and MACD are trying to develop some new bull juice, there is a little bit of momentum, so keep an eye on them for a couple more candlesticks (2 to 4 hours). Price is moving higher in the vicinity of the June record highs but not quite there yet so the negative divergence shown by the thin red lines over the last month is not official as yet, but it does hint weakness.

The stoch's are overbot agreeable to a pull back. The rising wedge is an extremely bearish pattern. Price could be at 3100 in a heatbeat then 3000 in a few pulses from there. The collapses from rising wedges can be quite dramatic. The SPX daily chart is agreeable to a pullback with neggie d in play across the indicators. This is a very favorable area for a top and a top that is long in the tooth considering the ongoing rampant complacency and lack of fear in the stock market. The SPX weekly chart is also agreeable to a pullback although the MACD continues moving higher. Traders have confidence in the Fed that they can print money forever and sends stocks higher perpetually.

Bank earnings are very important and will dictate whether stocks can hold on for another week, or not. For the 2-hour chart above, it should top out anytime as long as the RSI and MACD lines do not exceed the highs from a few days ago (neggie d remains in place). If the RSI or MACD poke a bit above the early July highs, then price will remain elevated for a couple more candlesticks (another 2 to 4 hours) and set its sights on the early June highs. The RSI is trying hard to break out. 

Today may be a wash since the bank earnings begin in the morning and traders may wait to see what the story is with JPM, C and WFC. The estimates for banks are in the crapper so they will probably beat; this is the way the Wall Street game is played. Banks rally Friday and today anticipating better news than the doom and gloom predicted. As banks go, so goes the stock market. The next candlesticks print at noon EST then 2 PM then 4 PM so check the chart above at those times. 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 11:04 AM EST: Wheeeee! Whoopie! The SPX is up 43 big points, +1.3%, to 3228. The breach of 3180 led to the 3220's. Traders are drunk as skunks on Fed wine buying stocks without a care in the world. Yee-haw. Whhhheeeee! Stocks will never go down because central bankers will always save the day. How lucky can a society be with such great fortune occurring daily? It is funny stuff although it will end in tragedy. Interestingly, the RSI is at the levels from early June but not yet able to move above those levels even with a big 40 point plus gain on the SPX. The VIX rallies above 28 to 28.09. Something is wrong with this picture. Something's gotta give. Stocks and volatility both cannot be right.

Note Added Tuesday Morning, 7/14/20, at 6:38 AM EST: Volatility was correct. The SPX peaks-out at 1:36 PM EST at 3235.32 and ends the day down 30 points, -0.9%, to 3155, a -80 point intraday reversal. That is a neggie d spankdown. The VIX ends at 32.19 a big jump higher and now sits at the 31.13 palindrome. The intraday price swings and day to day swings will become larger now that volatility is moving higher again.