SPX S&P 500 Daily Chart; Overbot; Negative Divergence; Upper Band Violation; Price Extended

Stocks jump wildly higher on news that former Federal Reserve Chair Yellen, Queen of the Doves, will takeover as Treasury Secretary (Mnuchin's job); she will sign the US money. The Dow tags 30K. Indexes keep printing or teasing new record highs.

That choppy action with the slight upward bias you see the last couple weeks is the PFE vaccine rally, then the MRNA vaccine rally, then the AZN vaccine rally, and lastly, the Yellen Rally. Some of today's joyous 58 point pop in the SPX is attributed to the start of the transition of the presidency but the Yellen appointment is far more important. She will do everything in her power to try to push fiscal stimulus through while cheerleading Fed Chairman Powell to print money endlessly (monetary stimulus).

The red lines show the negative divergence now in play across all chart indicators as price made the higher high today. This is the top unless happy talk occurs to extend the fun again. Price also violated the upper band so the middle band, the 20-day MA, at 3497, is in play and lower band at 3259. Price is extended above the moving average ribbon requiring a mean reversion lower.

A neggie d smackdown is needed to put price back in its place. There was no reason for the SPX to come back up after the prior two highs this month; it was not due to technicals but instead due to vaccine and stimulus hype and perhaps an end to the King Donnie baby saga at the Whitehouse. 

Barring anymore happy talk, the daily chart is ready to receive a spankdown in this daily time frame (selling should begin and last several days). We shall see what the bears got. It is odd timing however, with the holiday. Typically, stocks are bullish into a holiday but the stock market is overdue to crack and the low put/calls and elevated NYHL want to see a major selloff. The month is up and when that happens the last few days typically finish down. Do not be surprised if the stock market retraces today's huge up move with a reverse move just as large or larger tomorrow. 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.