SPXA150R Percent of S&P 500 Stocks Above 150Day MA and SPX S&P 500 Daily Charts; Megaphone (Expansion) Pattern; Significant Stock Market Top At Hand

The SPXA150R daily chart is Keystone's 'bet the farm on the short side' indicator. When the percentage of S&P 500 stocks above their 150-day MA's exceed 80%, the stock market is lofty. At 85%, you want to be short not long. At 90%, it is an easy call to be short. Above 92%-95% is the bet the farm on the short side indicator. The stock market will drop so there is no other play except down. The SPXA150R pokes above 90% as December began, but the Federal Reserve keeps printing money, Congress keeps promising stimulus, and the doctors are providing vaccinations. Traders are euphorically Happy singing along with Pharrell, dancing along the Primrose Path and whistling past the graveyard.

The SPXA150R peaks at 80% as September begins and bloop, the SPX ditches about 240 points. Then another tag of 80% mid-September flushes the stock market another 260 points. The SPXA150R tops again on 10/12/20 at 86% or so, so stocks flush about 270 points. Then price peaks again in mid-November at the 90%+ which creates that piddly pullback of 70 points. Bears were short-changed as the vaccine hype dominated December along with the monetary (Federal Reserve) and fiscal (Congress; US government) stimulus talk. The Fed maintains its jackboots on the throat of volatility which keeps stock prices elevated making for a happy privileged class, that own the stock market.

The expansion pattern, or megaphone, is highlighted including the mouthpiece and handle. Yell to your countrymen through the megaphone that the stock market is about to drop. The lower trend line of the megaphone is the target.

The SPX charts are setting up with a major top although the monthly chart may want to see one more up and test of existing highs which may occur in February. The SPX weekly chart wants a multi-week pullback and that should begin any day forward. New money comes into the stock market the first few days of the year creating buoyancy. Ditto the Santa Claus rally that runs through Tuesday. However, the piece of crap market is very overdue for a pullback. The uber low put/call ratios, that verify the off-the-charts bullishness and complacency, have sustained the low numbers for the last four months which is unprecedented.

The red boxes above are also unprecedented behavior. The SPXA150R is moving sideways, that should have collapsed by now but the stimulus and vaccine hype is powerful. There are a lot of young investors coming into the market now maintaining the buoyancy in stocks. Once they start seeing things drop, they will likely run for their lives.

Despite all of Wall Street touting big gains this year with targets of 4.2K, 4.3K, and higher, the charts say otherwise. The stock market is likely placing a significant multi-month and multi-year top right now in Q1 2021. A pullback is expected to begin anytime and it will run a few weeks, say through January. It has been a long time that the market has needed to pullback. Thus, once she starts sliding south, panic may set in very fast, and a flash crash is definitely on the table, only the crash part will occur but not the recovery part. Then stocks may be down for the count. The other path is up again in February as the SPX monthly chart hints, which would be THE top and then the long-term drop begins from February or early March. The charts will show the path ahead.

Over the next three months, do not be surprised if the SPX is sitting from 300 to a 1,000 points lower than current levels. There are 12 trading days until the Biden inauguration and they may want to tank the market before then. Enjoy your happiness now because the joy is ending. The only music playing in early 2021 will be Chopin. 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.