Fed day is at hand. The stock market typically moves higher 80% of the time the day or two going into the Fed meeting and this expected activity occurs again this time around. S&P futures are up +13 with VIX at 25.35 this Wednesday morning 4-1/2 hours before the opening bell. Markets await Pope Powell to return from the mountain on high and tell global traders how to trade this afternoon. The Fed decision is released at 2 PM EST with the press conference beginning at 2:30 PM EST. The central bankers are the market.
Interestingly, the new moon peaks this month at 7 AM EST tomorrow (Thursday) morning and stocks are typically weak moving through the new moon. This is the darkest time of the month so the militaries with advanced night vision technology will carry out covert raids. If a military event was going to occur before the US presidential election, it would likely occur over the coming days to take advantage of the pitch dark.
The SPX continues to battle through the channel created by the 20-day MA resistance at 3429 and the 50-day MA support at 3331. Price is at 3401 to begin the day so 28 points from the upper rail and a breakout and 70 points from the lower rail and a breakdown. This afternoon, Pope Powell will appear in a toga robe with a garland on his head a la Julius Caesar of ancient Rome. The sycophant of the elite privileged class will extend his right arm outward and turn his thumb up or down to dictate which way the SPX breaks.
If Powell is cooing dovishly promising quadruple double triple infinity money-printing to continue as long as time exists, that will send stocks soaring higher. If Powell is perceived as a tinge hawkish, stocks will drop like rocks. With stocks remaining at such elevated levels, they may drop, no matter what Powell and his friends say.
That's a lot of spaghetti in the chart above. Ready for some mumbo-jumbo? The red lines show the negative divergence that created the spankdown in price. Interestingly, when that blow-off top day occurred, the RSI popped so technically that has a bit of fuel remaining to help re-elevate price. Price dumps about 250 points during the selloff and begins bouncing through the 20-day and 50-day channel. The SPX backtested the 20-day MA as would be expected and has now tested this 3425-3429 level three times over the last five days. If Powell provides upside fuel, the SPX will pop up through the 20 and target that price resistance at 3450. Above that and the bulls will try to run stocks back up to the record highs. Powell holds the key.
If stocks fail after Powell, the blue two-leg bear flag pattern may play out. The first leg is 250 points south. If price drops say from the 20-day MA resistance at 3429, the target is 3179, call it the 3180-3200 area right where strong price support is at. When the SPX placed the low three days ago, the bounce occurs due to the positive divergence with the RSI and stochastics as well as the oversold stoch's. The MACD, histogram and money flow remain weak and bleak wanting to see price come down for a lower low.
The golden cross is shown with the gold circle where the 50-day MA crosses above the 200-day MA a bullish signal. Usually a pullback occurs after the golden cross and then price will continue higher as long as the golden cross remains. The SPX simply took off higher after the golden cross and never looked back. The world is awash in liquidity due to the global central banks printing money like madmen. That easy money is used to buy stocks, bonds, real estate, vineyards, art, antique cars, etc..., sending all asset classes into bubble territory.
The pink box shows that the rally higher is a strong trend higher in late August but this peters out a week ago during the selloff. The Aroon negative cross occurs. The purple lines show key price support levels going forward. The purple circles show juicy gaps that will need filled at some point forward. The brown boxes show the massive volume days all to the sell side. Even that volume candlestick at the end of July was a selling event all day until the last hour of trading that turned things around to paint it a buy candle. Price will want to come back down to test that price at 3270-3290 which is also price support and a gap-fill.
Keybot the Quant remains short during the big rally off the low three days ago but is champing at the bit to go long. Keybot likely wants to see SPX 3419 and higher to flip long. That represents about a +17 pop in the S&P futures and look at that. S&P futures are up +17 with the VIX at 25.31. The bulls know the number they need (3419+) and are counting on Powell to deliver the dovish talk and pump stocks higher. Bulls would be better off to see price slowly travel higher. If the gap-up open occurs, the quant will likely delay the flip to the long side for about 90 minutes even if the 3419 level is taken out.
Watch the 20-day and 50-day channel since the breakout, or breakdown, respectively, tells you the path ahead. It is all in Pope Powell's Holy hands. The central bankers are modern-day Money God's. 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, 9/17/20, at 2:36 AM EST: Fed Chairman Powell promises ZIRP through 2023. The central bankers are sick. Powell says bond purchases will remain at current levels. Stocks pop on the dovishness but then roll over into the closing bell. The SPX HOD is 3428.92 and the 20-day MA is 3428.74. Price comes up for a test of this key resistance and is spanked back down. The SPX finishes Wednesday down 16 points, -0.5%, to 3385. S&P futures have been deteriorating the last couple hours from -33 down to -65 currently about a -2% drop for the S&P 500 cash index if the futures remain negative. The Federal Reserve's grand 11 plus year Keynesian financial experiment is beginning to unravel. Treasury yields tick a bit higher since some bond traders likely expected more bond purchases. Higher rates hurt utilities. If the dollar rises, especially in a short squeeze, as described here over the last month with the dollar charts bottoming, commodities will be whacked. Keybot the Quant flipped to the long side yesterday but with the dicey markets perhaps the robot will whipsaw back to the short side.
If Powell is cooing dovishly promising quadruple double triple infinity money-printing to continue as long as time exists, that will send stocks soaring higher. If Powell is perceived as a tinge hawkish, stocks will drop like rocks. With stocks remaining at such elevated levels, they may drop, no matter what Powell and his friends say.
That's a lot of spaghetti in the chart above. Ready for some mumbo-jumbo? The red lines show the negative divergence that created the spankdown in price. Interestingly, when that blow-off top day occurred, the RSI popped so technically that has a bit of fuel remaining to help re-elevate price. Price dumps about 250 points during the selloff and begins bouncing through the 20-day and 50-day channel. The SPX backtested the 20-day MA as would be expected and has now tested this 3425-3429 level three times over the last five days. If Powell provides upside fuel, the SPX will pop up through the 20 and target that price resistance at 3450. Above that and the bulls will try to run stocks back up to the record highs. Powell holds the key.
If stocks fail after Powell, the blue two-leg bear flag pattern may play out. The first leg is 250 points south. If price drops say from the 20-day MA resistance at 3429, the target is 3179, call it the 3180-3200 area right where strong price support is at. When the SPX placed the low three days ago, the bounce occurs due to the positive divergence with the RSI and stochastics as well as the oversold stoch's. The MACD, histogram and money flow remain weak and bleak wanting to see price come down for a lower low.
The golden cross is shown with the gold circle where the 50-day MA crosses above the 200-day MA a bullish signal. Usually a pullback occurs after the golden cross and then price will continue higher as long as the golden cross remains. The SPX simply took off higher after the golden cross and never looked back. The world is awash in liquidity due to the global central banks printing money like madmen. That easy money is used to buy stocks, bonds, real estate, vineyards, art, antique cars, etc..., sending all asset classes into bubble territory.
The pink box shows that the rally higher is a strong trend higher in late August but this peters out a week ago during the selloff. The Aroon negative cross occurs. The purple lines show key price support levels going forward. The purple circles show juicy gaps that will need filled at some point forward. The brown boxes show the massive volume days all to the sell side. Even that volume candlestick at the end of July was a selling event all day until the last hour of trading that turned things around to paint it a buy candle. Price will want to come back down to test that price at 3270-3290 which is also price support and a gap-fill.
Keybot the Quant remains short during the big rally off the low three days ago but is champing at the bit to go long. Keybot likely wants to see SPX 3419 and higher to flip long. That represents about a +17 pop in the S&P futures and look at that. S&P futures are up +17 with the VIX at 25.31. The bulls know the number they need (3419+) and are counting on Powell to deliver the dovish talk and pump stocks higher. Bulls would be better off to see price slowly travel higher. If the gap-up open occurs, the quant will likely delay the flip to the long side for about 90 minutes even if the 3419 level is taken out.
Watch the 20-day and 50-day channel since the breakout, or breakdown, respectively, tells you the path ahead. It is all in Pope Powell's Holy hands. The central bankers are modern-day Money God's. 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, 9/17/20, at 2:36 AM EST: Fed Chairman Powell promises ZIRP through 2023. The central bankers are sick. Powell says bond purchases will remain at current levels. Stocks pop on the dovishness but then roll over into the closing bell. The SPX HOD is 3428.92 and the 20-day MA is 3428.74. Price comes up for a test of this key resistance and is spanked back down. The SPX finishes Wednesday down 16 points, -0.5%, to 3385. S&P futures have been deteriorating the last couple hours from -33 down to -65 currently about a -2% drop for the S&P 500 cash index if the futures remain negative. The Federal Reserve's grand 11 plus year Keynesian financial experiment is beginning to unravel. Treasury yields tick a bit higher since some bond traders likely expected more bond purchases. Higher rates hurt utilities. If the dollar rises, especially in a short squeeze, as described here over the last month with the dollar charts bottoming, commodities will be whacked. Keybot the Quant flipped to the long side yesterday but with the dicey markets perhaps the robot will whipsaw back to the short side.
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