SPX S&P 500 Daily and 2-Hour Charts; Overbot; Rising Wedges; Negative Divergence; Rampant Complacency; Significant Stock Market Top At Hand

Whhheeee! Whhooopie! Whhheeee! The stock market is the ride that never ends. The SPX gains 46.66 points to 3380. There sure are a lot of 666's showing up everywhere this week. Dip-buyers are drunk as skunks off Fed wine buying stocks with reckless abandon.It is historic. The SPX is trying to pierce into new record highs and today price did poke through the all-time closing high number at 3386.15 with a HOD at 3387.89 but the S&P 500 could not close above the record high. The SPX all-time record high is 3393.52 and all-time closing high is 3386.15 both on 2/19/20. The S&P 500 is at 3380.35 only a whisker away from new record highs. The euro runs above 1.18 slapping the US dollar down to 93.28 which pumped copper and stocks higher.

The charts are set up the same. There was no reason technically for price to come up to print another high. Something special happened today. With price up to 3388 that is above the all-time closing high at 3386 from February so the indicators can be reviewed for any negative divergence and all timeframes are in neggie d. The MACD is rising fast on the weekly chart  but for now the chart is cooked. If the weekly squeezes out a higher high in the MACD, this major top may be delayed only a week or so.

The SPX 2-hour, daily, weekly and monthly charts are all in negative divergence across all indicators (RSI, MACD, histogram, stochastics and money flow). That is remarkable. You never see this. Typically, a technician must play three-dimensional chess since a stock may, say, be bullish on the daily chart, but bearish on the weekly and then bullish on the monthly, or other combinations. This present day price action is unique and it further lays the groundwork for something very special happening this month.

The universal neggie d on all time frames for all indicators says the US stock market will go down in the hourly time frame, down in the daily time frame, down in the weekly time frame and down in the monthly time frame (which means a few months or year or two or more). Nobody is saying this except Keystone. Traders, investors, strategists and market participants exclaim, "Blasphemy!"

Everyone else is busy drinking the easy money booze provided by the four central banker horseman of the Apocalypse, the Fed, BOJ, ECB and PBOC, and buying equities without any concern for due diligence. Moral hazard has arrived. There is no reason to worry that stocks will ever go down because even if they do the Federal Reserve will always step in to save the day to protect America's wealthy class (that own large equity portfolios). Isn't the crony capitalism system great?

There is not only universal neggie d on the charts, but also rising wedges, overbot conditions, prices violating the upper bands and prices extended above the moving averages, requiring mean reversions. Price is ready for a smackdown and what makes it very special is the spanking should occur across all time frames which means it will begin now and last for a while. Over the last two months, the five largest volume days were sell days; 7/31/20 was a sell day until the last hour so it received a green candlestick.

Not only are all time frames in neggie d, but the low put/calls continue to signal rampant complacency and a significant top at hand. Traders and investors are giddy about the stock market and do not expect any retracement or lasting downside. It is very rare for the put/call ratios to print such record multi-year lows for this long without resolution lower for the stock market. You can see the stars are all aligned for the bears. The SPX charts are cooked and the rampant complacency, fearlessness and euphoric bullishness hints that the move lower will be significant.

It will not be surprising to see the S&P 500 dump from 200 to 500 points this month starting now. The SPX should begin tumbling lower right now and a significant pullback will begin. It is fascinating that the SPX is trying to print record highs while its charts and the rampant complacency are screaming for a significant collapse from these levels. 

These are also exciting times since a black day or flash crash may occur. Things are so out of control now, they may rectify very quickly and violently so perhaps a Black Thursday, Black Friday or Black Monday are in our futures or an intraday major flash crash.

The only thing that can extend the top for another day or two would be happy talk from the Fed, other central bankers, the Whitehouse or from the vaccine makers.
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 Thursday Morning, 8/13/20, at 10:22 AM EST: Everybody and his bro are bullish. CNBC commentator Jim Cramer and his chartist say 3400 is next then 3600. The chartist says traders are too bearish. Huh? Take a look at the CPC and CPCE put/calls which verify the uber complacency, fearlessness and bullish euphoria. Who do you think is correct? Good ole Keystone or Cramer?.