Wheeeee! Whhoooopie! Yee-haw!! Paging Major Kong! Paging Major Kong! Ride that stock market missile. Wheeeee! Whhoooopie!. The S&P 500 is in melt-up mode printing a new all-time high at 3588.11 and new all-time closing high at 3580.84. Keystone is looking for a potential flash crash to come out of the blue and instead a flash spike of +62 points intraday occurs. It is fascinating, and nutso.
While this epic price action occurs, the VIX pops above 27 settling at 26.57 up on the day. Stocks are euphorically bullish while at the same time volatility runs higher. Something is wrong there. The bulls also pumped utilities. To keep the upward trend in utes going, which helps bolster the case for the stock market, UTIL must stay above 807 through next week. UTIL was jammed to 822 today and settled at the 818 palindrome.
The bulls took advantage of the seasonality-style factors. Stocks are usually bullish through the full moon, equities usually float higher to begin a new month as new money is put to work and stocks typically rise the two days in front of a three-day holiday weekend. The bulls want to maintain a happy stock market into the holiday.
The happy vaccine talk pumps stocks higher and of course the stimulus talk over the last day. Humorously, republican Senate Leader McConnell comments that a stimulus deal does not look likely for at least a couple weeks or more. Traders and investors ignored that comment since they were too busy buying stocks.
The Fed's Beige Book paints a cautious picture and warns about a softening economy and layoffs that are becoming permanent. This is great news for traders, people's misery, since it means the Federal Reserve will keep printing money like madmen forever and stocks will continue rising. The SPX pops from 3560 to the new all-time high above 3588 a quick near 30-handle pop on the gloomy news for the economy. Praise and Honor to the Fed's Golden Printing Press in the basement of the Eccles Building.
There is another factor that is likely causing today's melt-up that no one has mentioned and yet it is as easy to see as the pimple on your face. The stock market is sniffing-out a Trump victory. King Donnie may be bequeathed four more years and traders can smell it. It may be his and Our Destiny that Donnie "Herbert Hoover" Trump would lead the path forward. Stocks received their conciliatory pump from the items mentioned above, but that obscene bullish orgy today, so decadent and pornographic that it would make Caligula blush, was likely also due to presidential poll results.
The polls are tightening for the 11/3/20 election only 62 days away. In general, democrat Sleepy Joe Biden was ahead of republican King Donnie Trump by +8 to +12 points in June. Sometimes it is not good to be the early leader. After the conventions, Biden's lead is in the +4 to +8 range now. Every way you assess the polls, there is a slight swing in Trump's favor over the last couple weeks. Markets sense a potential Trump win that will provide more cuts to banking and environmental laws and lower taxes for corporations so equities explode higher. It will be interesting to see if others think the polls had a lot to do with today's melt-up.
The universal consensus for the dollar was down but it has been showing buoyancy the last couple days as the possie d suggests (the dollar analysis was previously posted). Humorously, it does not matter since stocks go up if the dollar is weak or strong.
Keystone's 80/20 Rule says 8's lead to 2's so the closing price at 3580 hints that 3620 is coming. Bears need to reverse this fast and not allow the SPX to sneak above 3580 ever again. Can they do that? The 3588 high print hints that 3592 may print.
The SPX daily chart shows the huge price move today the candlestick poking up through the upper band. The middle band at 3420 and lower band at 3284 are in play. It has been over a month since the SPX has shown respect to the 20-day MA at 3420 so this back test is needed. Price is also extended above the moving averages requiring a mean reversion lower.
The RSI, stochastics and money flow are all overbot agreeable to a pull back. The red lines show the neggie d remaining in play although that sneaky RSI received enough bull hype news to print a higher high. The RSI needs a jog move to turn neggie d (price moves down one day and up the next to a matching high when the RSI will be neggie d identifying the top in the SPX. The chart remains set up to top out this week. Do not be surprised if a huge flush lower occurs tomorrow retracing much of today's joy and then followed by another big Friday up day. The VIX was above 27 today. As volatility climbs higher the intraday point moves and day to day point moves will become larger, faster and more erratic.
The SPX 2-hour chart remains toppy due to neggie d so it wants the S&P 500 to top out anytime over the coming hours and drop. Back to the daily chart, watch that RSI at the opening bell tomorrow. If you see S&P futures higher and the opening prints are happy with a higher high in the SPX, that RSI may turn neggie d tomorrow. If so, the top is in. If not the top is only a day or so away. This is historic stock market and economic history you are watching in real-time.
September is going to be a crazy and wild month. Today may have been the anointing rally for King Donnie Trump. Donnie and Rock 'n Roll is King. Feel that rhythm, it's really going through your soul. Come along with me to a land of make believe. The bulls are trying to keep the stock market boat afloat into the weekend but two days can be an eternity in trading. 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, 9/4/20, at 4:48 AM EST: Yesterday, the SPX drops 126 points, -3.5%, to 3455. The VIX jumps to 35.94 and settles at 33.60. VIX is currently trading at 32.41. Bears will not be able to stop the selling unless the VIX drops below 28.666 (as per the Keybot the Quant algorithm).
There is another factor that is likely causing today's melt-up that no one has mentioned and yet it is as easy to see as the pimple on your face. The stock market is sniffing-out a Trump victory. King Donnie may be bequeathed four more years and traders can smell it. It may be his and Our Destiny that Donnie "Herbert Hoover" Trump would lead the path forward. Stocks received their conciliatory pump from the items mentioned above, but that obscene bullish orgy today, so decadent and pornographic that it would make Caligula blush, was likely also due to presidential poll results.
The polls are tightening for the 11/3/20 election only 62 days away. In general, democrat Sleepy Joe Biden was ahead of republican King Donnie Trump by +8 to +12 points in June. Sometimes it is not good to be the early leader. After the conventions, Biden's lead is in the +4 to +8 range now. Every way you assess the polls, there is a slight swing in Trump's favor over the last couple weeks. Markets sense a potential Trump win that will provide more cuts to banking and environmental laws and lower taxes for corporations so equities explode higher. It will be interesting to see if others think the polls had a lot to do with today's melt-up.
The universal consensus for the dollar was down but it has been showing buoyancy the last couple days as the possie d suggests (the dollar analysis was previously posted). Humorously, it does not matter since stocks go up if the dollar is weak or strong.
Keystone's 80/20 Rule says 8's lead to 2's so the closing price at 3580 hints that 3620 is coming. Bears need to reverse this fast and not allow the SPX to sneak above 3580 ever again. Can they do that? The 3588 high print hints that 3592 may print.
The SPX daily chart shows the huge price move today the candlestick poking up through the upper band. The middle band at 3420 and lower band at 3284 are in play. It has been over a month since the SPX has shown respect to the 20-day MA at 3420 so this back test is needed. Price is also extended above the moving averages requiring a mean reversion lower.
The RSI, stochastics and money flow are all overbot agreeable to a pull back. The red lines show the neggie d remaining in play although that sneaky RSI received enough bull hype news to print a higher high. The RSI needs a jog move to turn neggie d (price moves down one day and up the next to a matching high when the RSI will be neggie d identifying the top in the SPX. The chart remains set up to top out this week. Do not be surprised if a huge flush lower occurs tomorrow retracing much of today's joy and then followed by another big Friday up day. The VIX was above 27 today. As volatility climbs higher the intraday point moves and day to day point moves will become larger, faster and more erratic.
The SPX 2-hour chart remains toppy due to neggie d so it wants the S&P 500 to top out anytime over the coming hours and drop. Back to the daily chart, watch that RSI at the opening bell tomorrow. If you see S&P futures higher and the opening prints are happy with a higher high in the SPX, that RSI may turn neggie d tomorrow. If so, the top is in. If not the top is only a day or so away. This is historic stock market and economic history you are watching in real-time.
September is going to be a crazy and wild month. Today may have been the anointing rally for King Donnie Trump. Donnie and Rock 'n Roll is King. Feel that rhythm, it's really going through your soul. Come along with me to a land of make believe. The bulls are trying to keep the stock market boat afloat into the weekend but two days can be an eternity in trading. 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, 9/4/20, at 4:48 AM EST: Yesterday, the SPX drops 126 points, -3.5%, to 3455. The VIX jumps to 35.94 and settles at 33.60. VIX is currently trading at 32.41. Bears will not be able to stop the selling unless the VIX drops below 28.666 (as per the Keybot the Quant algorithm).
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