The S&P 500 prints a new all-time record high at 3514.77. It's the bear's turn now. The SPX 2-hour chart displays overbot RSI and stochastics, and money flow, agreeable to a pullback. The rising wedge pattern is bearish and the collapses from this pattern can be quite dramatic. The chart indicators are in neggie d (red lines) which will create the spankdown.
The upper band is violated so the middle band at 3479 and lower band at 3427 are on the table. Price is extended needing a mean reversion lower. All of the above factors are bearish indicating the top is in. This is The End, at least for the hourly time frame.
As price retreats, watch to see if the lower rail fails on the upward-sloping green channel. If so, that obviously means more trouble ahead.
The Federal Reserve is not stupid. Their technicians likely told Powell and the gang about the problem at hand. Fed members are likely strategizing this evening, eating cold pizza in the Eccles Building conference room, figuring out some statement they can make to save the day. Ditto the Whitehouse. King Donnie Trump has called Mnuchin and Kudlow in on the Oval Office carpet and told them to have some type of hyped-up message ready for tomorrow morning before the stock market opens. The chart says down and that is all there is to it. The only thing that can save it is happy talk from the Fed, other central banks, President Trump, or happy vaccine talk.
As a previous post explained, VIX 28.03-28.35 is a key bull-bear line in the sand. The stock market party can be sustained a little bit longer if the VIX remains below 28.03. If the VIX pops above 28.35, the stock market will be collapsing.
Tuesday is the first day of trading for September and stocks typically receive buoyancy as new money is put to work. The monthly charts for August are cast in concrete today and the September price candlesticks begin tomorrow. The full moon peaks early Wednesday morning and stocks are usually bullish moving through the full moon. Labor Day holiday is Monday and stocks are usually bullish the 2 days in front of a 3-day weekend. A trifecta of joy for the bulls.
The underlying current of the stock market is bullish as per the three factors but time will tell if the neggie d on the hourly and daily charts are strong enough to overcome these positive factors (which the neggie d would be expected to overrule everything else; neggie d is a powerful force). S&P futures are down -4 as the clock ticks towards 9 Pm EST on the US East Coast. 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 9:41 PM EST: USD drops to 92.08. Euro pops to 1.1959. S&P +1.
Note Added Tuesday Morning, 9/1/20, at 4:30 AM EST: USD drops to 91.93; a 91-handle. The euro is pumped to 1.1980. S&P +13. VIX 25.61. Right on cue, AZN announces human trials for its vaccine. The CEO, however, is a Gloomy Gus saying the vaccine will likely not be ready by the end of the year and people will need to get used to living with the coronavirus. Gold 1990. Treasury yields are; 2-year 0.13%, 5-year 0.27%, 10-year 0.72%, 30-year 1.50%.
Note Added Tuesday Morning, 9/1/20, at 7:25 AM EST: USD 91.86. Euro 1.1978. S&P +8. VIX 25.69.
Note Added Tuesday Afternoon, 9/1/20, at 4:38 PM EST: Wheeeee! Whhooopie! This stuff is a hoot. The pumps arrive. AstraZeneca started off the fun with vaccine promises. Dr Fauci says vaccines look promising before year-end. Treasury Secretary Mnuchin was testifying on Capitol Hill promising a stimulus bill and no matter what President Trump plans to sign more fiscal measures via executive orders. What a mess. Whitehouse Chief of Staff Meadows promises a republican bill, that skinnied-down $500 billion package, in a couple days, and the Senate will vote and approve the bill next week and send it to the House. Pelosi will ignore it but none the less its progress on the stimulus front and stocks love it. Mnuchin does not want outdone so he then promises that he will speak with Pelosi to jump-start the stimulus talks. The SPX pops higher fueled by stimulus happy talk. Mnuchin says he is prepared to reach a deal with substantial stimulus. In other words, the republicans are willing to bring their overall dollar amount higher. Democrats are at $2.2 trillion, republicans at $1.0 trillion, so maybe both sides see the light and will make a crony capitalism deal at $1.5 or $1.6 something in there. Equities love the happy talk and explode higher into the closing bell. The S&P 500 prints a new all-time record high at 3528.03 and new all-time closing high at 3526.65. Note how the market makers bumped it a penny on the final print to avoid the 666. Happy Days. Whheeee! Whhooooopie!. Rockin' and rollin' all week long. Whoa, boy, all this partying can make a man dizzy. What do the charts look like since they have to adjust for the happy talk that did the goosing today? On the SPX 2-hour chart, today's bump is buptkis. The indicators remain neggie d. It is the same chart as above. The bulls may be able to keep price buoyant for an hour or two early hump day, but the SPX would be expected to receive its neggie d spankdown anytime. On the SPX daily chart, the indicators remain neggie d across the board. She remains topped-out. Typically, for a goosing, you would see at least one indicator bumping higher on the charts with extra fuel but there is nothing, nada, zilch; very weird. Bearish. Nothing has changed. Simply pretend tonight is last night. The SPX is topped out on the hourly and daily basis and expect it to receive a neggie d spankdown. The dollar recovered during the day but stocks remained buoyant. This is because the Fed jumped into action and placed its jackboots on the neck of volatility to keep it down and voila, stocks rise. It is a good thing that Charlie Evans shined the jackboots this past weekend so they were ready for use. VIX 26.12. The utilities remain key. Utes are trailing lower and that is an extremely bad stock market signal for the long-term. UTIL is sub 8 hundo to 794. UTIL must finish this week above 807 or the stock market is in serious trouble next week. Keybot the Quant was looking for 3493 today to flip short and price came down to 3494 and bounced. Take the flash crash and Black Wednesday, Black Thursday, or Black any day warnings seriously. It would not be surprising at all to see an intraday flash crash where the SPX drops 200 or 300 points in a heartbeat but instead of quickly spiking back up, it does not. Something nutso is about to happen; you can feel the vibe. Folks holding on to longs thinking there will be time to exit may be in for a surprise in the coming days. This is epic stock market activity occurring in real-time that will be talked about for decades to come. The SPX monthly candlestick begins a new month and the higher high may benefit the bears. Price makes its higher high and the indicators are in negative divergence. This is a long-term (months and perhaps years forward) stock market top that is occurring (in progress) and nobody understands it as yet. It is going to be an exciting Fall; a fall in Fall, when all the leaves are brown, and the sky is gray.
Note Added Wednesday Morning, 9/2/20, at 3:30 AM EST: USD 92.56. Euro 1.1875. Time will tell if the euro longs and dollar shorts panic. S&P +17. VIX 26.02. Futures are happy on upbeat virus talk and stimulus promises. Comically, US stocks and futures go up regardless of whether the dollar is up or down.
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