SPX S&P 500 Daily Chart; Godot Top; Overbot; Rising Wedge; Negative Divergence; Upper Band Violation; Golden Cross; Record Stock Market Complacency and Euphoria

The bullish stock market euphoria and rampant complacency is ongoing for over a month with only the modest pullback occurring in the stock market in early June. The CPC and CPCE put/call ratios remain at record lows verifying the fearlessness in the markets and complete disregard for due diligence. Traders are guzzling down Fed whiskey, ECB champagne, BOJ sake and PBOC rice wine, becoming drunk as skunks, and buying any stock with a heartbeat.

Uncle Frank,who lives in the double-wide at the cul de sac side of the trailer park, dug up his entire life savings he stashed in a crawl space under the kitchen. He took this mountain of cash to the broker in town, located between the laundromat and thrift store, and bot AAPL, AMZN and TSLA stock. Frank is bragging at the bingo hall that he will be able to move to Florida next year with all his huge profits. He is encouraging all the blue-haired gal's, like Mildred, Agnes and Flo, to take their entire life savings and get in on the action before its too late. Flo says her grandchild David is knowledgeable on the computer so they placed her entire life savings in an online brokerage account and bot AAPL and TSLA stock. She said she wanted to stay diversified so she bot two stocks. These made-up stories are silly and funny but at the same time lots of folks will likely lose their shirts over the coming days and they will not be laughing, they will be crying.

It is interesting times. The charts want equities to pullback but there are several extraneous factors providing more bull power including the US dollar. ECB President Lagarde's decision last week results in the euro moving to 1.15 then 1.16 now at 1.1581. The euro moves higher so the dollar moves lower thereby pumping commodities, gold, silver, and stocks in general, and emerging markets higher. At the same time, the Federal Reserve is constantly at the ready, as is the other global central banks, to print more money. Governments are ready to spend more money. The democrat-led House wants a $3 trillion spending bill while the president and republican-controlled Senate want a $1 trillion package. The stimulus bill sausage is being made this week into next but everyone expects a lot of happy carefree money that will pump stocks higher. The constant vaccine happy talk also pumps stocks higher and creates some of the outperformance in the Nazzy indexes.

So all that said, stocks continue floating higher. The price activity is the same as the start of the year. There was a top occurring but stocks kept lingering on, until they didn't. It is the same thing now. As that top was described in real-time, it was called the Godot Top since it took a bit longer to appear than expected and this one is the same. The power of the central banks is amazing. The central bankers are the market.

The daily incremental moves are becoming smaller and smaller; the calm before the storm. Price has violated the upper band so the middle band at 3159 and lower band at 3014 are on the table. The ADX is down at 16 indicating that the rally higher is not a strong trend. The Aroon green line is pegged at one hundo with nowhere to go but down which is bearish. The Aroon red line is moving higher which is bearish so look for a potential negative cross. The rising red wedge pattern is ominous.

Price makes a higher high but the indicators are all in negative divergence wanting price to drop (red lines). Stochastics are overbot agreeable to a pullback. The RSI was overbot in June. The Golden Cross (gold circle) occurred so a pullback would be expected now in the near-term and then the chart will decide after that if it wants to maintain the golden cross and happy bull action. The Keybot the Quant algorithm remains long and is tracking the utilities as the major influencer of stock market direction today. Bulls win going forward with stronger utes while the bears will begin growling strongly if the utilities begin leaking lower.

The chart is set up for a big fall considering the rampant complacency. Do not be surprised to see the SPX 200 to 400 points, or more, lower in a couple weeks. Considering the action this week, a flash crash or Black choose-your-day event (Black Monday, Black Tuesday, etc..) is firmly on the table and more likely than days ago. Hang on to your hat. Buckle up, as Bette would say. S&P future are up +15 about 3-1/2 hours before the opening bell for the regular US Thursday trading session. VIX 23.98.

The US dollar, the dixie, DXY, or USD, is at 94.86, matching the lows from March. It is decision time. Bounce or die. On 3/9/20, the dollar closing price was 94.87 and LOD was 94.61. She's testing support now. What will happen? 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 Friday Morning, 7/24/20, at 4:17 AM EST: The bulls started yesterday in a joyous mood but that turned sour at munch time. Perhaps the pastrami on rye sandwiches were sitting outside in the sun too long, along with the deviled eggs. Stocks drop intraday. The SPX ends the Thursday session down 40 points, -1.2%, to 3236. The bears need either UTIL below 828 or NYA below 12470 to prove that the selling can continue. S&P futures are down -19. VIX is trading at 27.61. Bears are going to need to see higher volatility. Note the ongoing battle with volatility at the 200-day MA line in the sand at 26.76. Bears win going forward if the VIX remains above 26.76 trending higher. Bulls win going forward if the VIX drops back below 26.76 trending lower. US dollar index is at 94.71 so far holding support.

Note Added Friday Morning, 7/24/20, at 8:01 AM EST: S&P -13. VIX 26.96. US dollar index 94.70. XLU, the utility ETF, trades dead flat in the pre-market.

Note Added Friday Morning, 7/24/20, at 11:40 AM EST: US dollar index fell to a LOD at 94.54 which directly corresponded to gold tagging 19 hundo. It's all about the dollar. UTIL just cracked the 828 palindrome so hold on tight. Ditto the NYA at 12470. It is decision time. The bears have it on a silver platter if they want it. The SPX is down 13 points, -0.4%, to the 3223 palindrome. This is the climax of the market drama.

Note Added Friday Morning, 7/24/20, at 11:50 AM EST: The tension is so thick you can cut it with a knife. UTIL 828. NYA 12477. It's a knock-down, drag-out bar fight between bulls and bears. Chairs are tossed around, a bull breaks a pool stick over a bear's back. A bear stuffs a basket of pretzels in a bull's face. The bartender is calling the cops.

Note Added Friday Morning, 7/24/20, at 11:50 AM EST: Utes fail. See if it holds. UTIL goes sub 826. Watch the markets; it may get nasty. NYA fails at 12470 now printing 12468. Strap yourself in. Keystone attaches the shoulder harness and helmet. Do you love the smell of napalm in the morning? Let's see if the bear's got anything. Bears would need to take out the LOD at 3202 to show they have the beans to usher in significant weakness.

Note Added Friday Morning, 7/24/20, at 11:56 AM EST: UTIL 827. NYA 12474. SPX 3220. Wait until you see the white's of their eyes before you shoot.....wait.....wait..... you will see the NYA fail below 12470 if the bears want to create carnage today. The battle continues.

Note Added Friday, 7/24/20, at 12:04 PM EST: NYA 12472. SPX 3220. The bulls know the seriousness of the situation and are holding on by their fingernails. If NYA is lost, all is lost. Here it is, NYA 12470, for all the marbles. NYA 12469.65 is the exact bull-bear line in the sand (identified by Keybot) and determines who wins now and into the end of the year.

Note Added Friday, 7/24/20, at 12:07 PM EST: UTIL 827. NYA 12460. Bye-bye. SPX 3217. Stocks would be expected to puke from here. The VIX 200-day MA is at 26.79 and the VIX is at 26.66. Bears simply need a few pennies higher and it should all roll over. Bulls are trying to cling for life and fight back by holding on to volatility with one remaining fingernail.

Note Added Friday, 7/24/20, at 12:17 PM EST: UTIL 827.50. Bulls are trying to goose the utes. NYA 12465. SPX 3214. VIX 26.80. The stock market is not only deciding the near-term direction forward, which should be down considering the multi-week complacency, but also the likely fate of equities into year-end. Hence, it is a bloody and wicked battle today with both sides taking heavy casualties. The drama is peaking. VIX is at 26.79 and the 200-day MA line in the sand is 26.79. Time to bounce or die. As volatility goes, the stock market will go in the opposite direction. UTIL is back-kissing the 828 palindrome. Bulls know their backs are against the wall; they are fighting for their lives.