SPX S&P 500 Daily Chart; Overbot; Rising Wedge; Gap-Fill; Negative Divergence and Euphoric Sentiment Signals Stock Market Top At Hand

Whheeee! Whooopie! The euphoric bullish orgy is in full swing. The Aroon green line is pegged at maximum 1 hundo while the red line is smashed to the lowest possible at zero. From the Aroon perspective, this is the maximum possible bullishness that can exist in the stock market; it is impossible for traders and investors to become more happy and optimistic; everyone is convinced that the stock market will never go down again.

The CPC and CPCE put/call ratios remain at multi-year decade lows. This is exciting stuff to watch if you are a long-time student of the markets. The uber complacency and fearlessness may deliver a comeuppance to the stock market that may be quite spectacular.

The SPX daily chart above is cooked and the SPX would start dropping now if it was not for the US Monthly Jobs Report. Equities may idle sideways today while waiting for the BLS to come down from on high tomorrow morning and bestow the sacred jobs numbers upon the masses and tell global traders how to trade. Of course, any positive news, like an agreement on the new stimulus bill, may pump markets higher another day or two, but equities can only head up on hype news now. The technical fuel is gone as shown by the negative divergence (red lines).

The little green lines show some near-term, a few days, of momentum trying to create higher highs in the indicators to try and refuel. The indicators are lower than for the February price top but this is not yet negative divergence since price would have to make a higher high than February, to create the neggie d against the downward sloping indicators. However, the indicators are sluggish and losing some gusto (excluding the last couple days into the jobs report), so if price came up for new all-time highs, the chart would likely remain in negative divergence.

Note how price came up to fill the top gap from February. The gap was mentioned a couple weeks ago. This action buttons up the top and is actually bear-friendly if the stock market begins selling off now. Prior to the current prices, the stock market selloff may have begun but it would have always had the gap hanging over its head wanting price to come back up. The gap is filled now (price no longer has a reason to come back up).

The red rising wedge pattern is ominous and adds to this great epic stock market drama now playing out before our eyes, but few realize it. The ADX is down at 19 so the rally higher is not considered a strong trend by technical standards. Of course it isn't. It is another central banker pump. The central bankers are the market.

The chart is cooked and ready to drop. Stochastics are overbot ready to initiate the fall. The only thing that can save it is happy news talk, or say a stimulus deal, however, the writing is on the wall. There is no more time for stocks. Considering the uber complacency ongoing for a month, and the rising wedge, the selloff may be quite a sight to see. Hang on to your hat. Watch your wallet. The sharks are starting to swim out into the market waters now; have you prepared yourself or are you chum? There will be no mercy once the fun begins.  Turn out the lights, the party is over. All good things must end. Take it away, Willie. 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.