SPX S&P 500 2-Hour Chart; Overbot; Rising Wedge; Negative Divergence; Upper Band Violation; Price Extended

Here is the SPX 2-hour chart again since it has been interesting to watch as the stock market top forms. The top is in again after the weak Jobless Claims number (almost 1 million Americans canned over the last week) portends that more Federal Reserve easy money, and government fiscal money, will be on the come which will pump stocks higher. The wealthy, privileged class dances with glee. President-elect Biden is going to announce his economic plan this evening and it should be $2 trillion with a $2,000 individual check for folks. It may lead to an even bigger $3 trillion or why not $4 trillion. Why not $4K checks? Wheeee! Whoopie! I....wanna rock n roll all ni.....ght, and par-tay ev-ery day!

The top is in due to the neggie d (red lines). The S&P 500 is a hair from new all-time record highs. The HOD is at 3823.60 at 10:19 AM EST. Remember the references to this area the other day and that pesky MACD line that still had some upside juice? 3824 is close enough for government work so that is a matching high, so you can look at the indicators, and you see that they are all neggie d, so the top is in. Keep an eye on the money flow since it is trying to squeeze out 2 to 4 more hours for the top. Bulls are trying to stretch things into the closing bell because Biden is going to deliver Christmas presents tonight. Traders may want to unwrap Biden's gifts this evening and see what they got before deciding to buy and sell. The gifts Keystone receives are always socks, and coal.

The expectation is for stocks to drop from here. Make sure the money flow remains neggie d. The overbot conditions and red rising wedge are bearish. Ditto the upper band violation. Note the tight bands so a big move is coming in this 2-hour candlestick time frame and considering the neggie d, you would expect it to be down. Price is extended above its moving average lines requiring a mean reversion lower. 

The SPX daily chart is set up with neggie d as well so a few days of down, at a minimum, is ahead (unless Santa Biden delivers a Lamborghini). The bears have it on a silver platter. What are yinz waiting for? Go up and blow on the stock market and it will fall over and collapse.

The next candlestick begins at noon and the the next after that is 2 PM so confirm the neggie d, and downward path ahead, at munch time. 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 11:14 AM EST: SPX 3821. VIX 21.88

Note Added 11:27 AM EST: SPX 3817. VIX 22.01. Gold 1849. Silver 25.70. Euro 1.2146. US dollar index 90.30. 10-year yield 1.09%.

Note Added 11:38 AM EST: SPX 3815. VIX 22.32. Volatility pops, so stocks drop. Perhaps the Fed is losing its grip on the VIX beachball it tries to hold underwater each day?. Probably not as they jam it lower again.

Note Added Friday Morning, 1/15/21, at 5:36 AM EST: The SPX loses 29 points, -0.8%, to 3795 in the Thursday session so a drop of almost 30 handles off the top. S&P futures are down -10 with the VIX 23.46. Today we see if the bears got legs or if they will retreat back to the winter den. Bears need VIX above 25.16 to create market mayhem (a level that is being tracked by the Keybot the Quant algorithm). That is when the real trouble starts. If stocks sell off, but the VIX does not move above 25.16, the bears got nothing, and stocks will turn around and rally into the weekend. MLK Day is Monday so markets are closed so equities would typically have a bullish bias into the holiday weekend. Bulls must push UTIL above 876 by 4 PM EST today (as per the Keybot quant), otherwise, the stock market will be weak next week. Biden was supposed to deliver a big bright new shiny pony last night and he shows up with a bovine of only average beauty, which is fine, although a minor disappointment. Sleepy Joe, fresh from a nap, announces a $1.9 trillion package but $2 trillion was expected. There were no real surprises only a realization that it may not be so easy to order up all the pork that the republicans say the democrats desire. Earlier in the day, Prince Powell proclaims that easy money will be provided forever. Rates will not increase anytime soon and he has not even begun to think about any type of tightening as yet. To pile it on higher and deeper, like a PhD would do, the Federal Reserve decrees that tightening is not only out of the question but when it begins sometime way out in the future it will only begin with the Fed telling everyone, in full transparency, that they are beginning to start to think about a tightening regime. It makes you laugh out loud. It's over folks. You are watching the end of crony capitalism. After you promise the sun, the moon, all the stars, and the universe itself to your honey, they always want more. The Fed is out of ammunition; it is interesting since this discussion has been ongoing in the financial community for the last few years. Think about it. Yesterday, Powell announces that he is 1,000% in forever at keeping rates low and printing money non-stop like a madman, but stocks slumped over, like a man knifed in the back while he was enjoying Sunday dinner, his face ends up in the gravy. That is a tell. Considering the last 11 years of easy money announcements beginning with QE1 in March 2009, stocks always pop on the news. The Fed happy talk typically sends the SPX from 10 to 30 points higher. Then the second act comes on stage; neither Jerome or Sleepy Joe are headline acts. Biden shows up with a Chevy that needs tires in the spring when everyone thought he said he was bringing a brand new Cadillac. The plot thickens. Are you ready for this year's future or are you whistling past the graveyard? The true headline act is a bubble-poppin' band singing about a crash in the classic Last Kiss.. 

Note Added Friday Morning, 1/15/21, at 10:59 AM EST: The SPX loses 32 points, -0.8%, to 3764 in the Friday session so a drop of about 62 handles off the top. LOD is 3749.62 so that is a key number which is 76 points off the top. VIX 24.61. Volatility popped but the bears could not hold it higher. Bears need VIX above 25.25 to create market mayhem. This tells you everything today. Stocks will rally if the bears cannot push the VIX above 25.25 and keep it above. Humorously, CNBC's Jim Cramer interviews David Tepper of Appaloosa hedge fund, and Tepper proclaims higher stocks ahead telling viewers not to bet against the market. It is funny because anytime Tepper has provided a proclamation over the last 10 years, the stock market catapults higher 20 or 30 SPX points. Instead, the SPX is tanking. The Fed proclaims money-printing but stocks drop. President-elect Biden promises a Maserati but shows up in a Vega. Tepper decrees blue skies ahead but stocks collapse. To use baseball lingo, 'three strikes and yer out'. Watch VIX 25.25 it tells you everything you need to know about the stock market today.

Note Added Saturday, 1/16/21: The stock market was weak on Friday, but the Fed held the VIX beachball underwater, so the bears were unable to make any headway lower. The SPX loses 27 points, -0.7%, to 3768. This is the fifth day off the all-time high at 3826.69 on Friday, 1/8/21. The neggie d spanks the SPX from 3824 on Thursday to 3768 on Friday; a -56 point drop, so far. The VIX could not move above 25.25 so the bears had nothing (it poked above but could not sustain). Utilities popped with UTIL ending the week at 861 but the bulls need 876 for all of next week. Therefore, the stock market will be weak come 9:30 AM EST Tuesday (US markets are closed on Monday in honor of Martin Luther King Day). Watch UTIL 876 and if utilities cannot regain 876, watch VIX 25.25 since that will tell you that the wheels are falling off the stock market. If the VIX continues to refuse to move higher, stocks will begin rallying again and the bulls will try to push utes higher. If the bulls then fail to push UTIL above 876, bloop, the stock market will then roll back over to the downside.