SPX S&P 500 60-Minute Chart with 200 EMA Cross

Wheee! Whooopie! Wheeee! Woo-hoo! Praise and Honor to the stimulus. It's another party day and rock 'n roll is king! All she wants to do is rock 'n roll, boys. Stocks have had a joyous week thus far and hump day is a pump, too. The SPX comes up to fill the orange gap. The chart is the SPX 60-minute with 200 EMA cross, one of Keystone's key short-term stock market indicators. The SPX is at 3844 above the 200 EMA on the SPX 60-minute at 3774. All H*ll breaks loose if/when 3774 fails.

The SPX plays around sideways not knowing what to do. All these matching or higher price highs, including this spurt as this post is typed in the early afternoon, comes with neggie d across all indicators (red lines) except the MACD line. Thus, one more jog move is needed, down, then back up, to provide time for the MACD to go neggie d and identify this near-term top in the one-hour time frame. Two candlesticks is 2 hours but the market is always shifty and with time approaching 2 PM EST, that would open the door to a top in the morning after the opening bell. So either this afternoon or tomorrow morning for the top (see below comments on the SPX 2-hour chart so top anytime now through late morning tomorrow).

This is a bit odd considering the all-important, they are always called the 'all-important', it will be jaw-dropping if someone ever forgot to say that it was all-important, Monthly Jobs Report that hits Friday morning 8:30 AM EST. Usually traders try to limp markets sideways into the data; maybe they will try that tomorrow.

The SPX tested the 200 EMA twice in late January but the bulls beat back the bears pushing stocks higher. When the SPX drops watch that blue gap at 3780-3790. Price may come down and perform an island reversal gapping right back down through to 3780 moving lower, or, simply come down to fill the gap.

The 200 EMA on the SPX 60-minute at 3774 is moving higher to form a confluence with the blue gap and act as a magnet to pull price lower. Keystone added to shorts this afternoon. Bot some TWM, also some SRS. Already holding SDS and QID and adding. These are all 2x inverse ETF's and not to be fooled with if you are a novice. There are 3x triple-leveraged ETF's and ETN's but ignore those and do not ever play any of them; you will lose your money long with your shirt.

Never play any 3x volatility ETF or ETN instrument. Those are all flawed instruments and you will lose your money. Simply watch the VIX to gauge the market; do not trade it (stocks move inverse to volatility 90% or more of the time). Volatility is a different animal and you will end up losing your money. VIX drops down to 23.30 right now, Pope Powell lifts his robe maintaining his jackboot on the throat of volatility allowing stocks to rally and reward the wealthy class.

The SPX weekly chart has topped-out with negative divergence. Of course, some kind of happy talk announcement may occur to breathe a couple more steps into the corpse, but the ole gal does not have many more steps remaining. Stocks should begin a multi-week decline now so February will likely not be pleasant. The SPX monthly chart has to be monitored since the indicators are also neggie d, which will conspire with the weekly to create the multi-week weakness, except for the MACD line is still higher, in the stratosphere. The monthly chart has to be watched to see how that MACD line behaves when the selling begins. It will determine if now is also the multi-month and multi-year top, or if this top will be delayed by a month or two; THE top would then occur in March or April. Nonetheless, its time. Are you prepared?

Thus, you do not want to be long. If it is a ticker you want to hold for many years, fine, keep it, but understand that this time next year, your stocks may be worth about 50% of what they are right now. That is when you frantically call the broker to ask what is going on but why would you, he sold you the stuff and you lost your money. It is the time that the broker will then inform you that you are a long-term investor so that makes you feel good about losing your money. This is your vision and glimpse of Christmas future as per the Dickens classic, A Christmas Carol. This major top is occurring now through April, perhaps exactly right now, so you can hang low for a few months and if everything was and is fine, simply reenter the market in the summer.

If you never shorted before, there are inverse ETF's, like the ones mentioned above, that can be played. But if you want to dip your toe a tiny bit on the wild side, you know that you were always a Real Wild Child, as Iggy will sing, you could play one of the single 1x inverse ETF's. A 1x ETF moves the same percentage amount as the underlying index. A 1x inverse ETF moves the same amount as the index but the opposite way. The 2x double-leveraged ETF's move twice the amount in each direction.

Here is an example for all of you that do not understand the ETF's. Let's take the spiders which is SPY. The three most active ETF's are SPY, DIA and QQQ, the spiders, diamonds and Q's, or cubes (channel your Wizard of Oz and sing 'spiders and diamonds and Q's, oh my!). These three track the S&P 500 Index, Dow Jones Industrials Index and Nasdaq Composite Index, respectively, on the long side. Google 'ETF list' and you will find information and all the ETF tickers available.

SPY is the 1x long for the S&P 500, SH is the 1x inverse ETF. SSO is the 2x ETF for the SPX and SDS is the 2x inverse ETF. Oh, okay, that makes it all clear as mud. Hang in there, it is quite simple to understand and you can adopt this example for the other indexes and track down their ETF symbols. If the SPX rallies +2% on a given day, SPY, the spiders, will rally +2% (about). SH will drop -2%. SSO will pop +4%. SDS would lose -4%. If the SPX collapses -3.5%, SPY loses -3.5%, SH gains +3.5%, SSO loses -7% and SDS gains +7%. Piece of cake.

If you are new to trading, and you performed your due diligence on a stock or three, and you feel the fundamental analyses are pointing to better earnings, and your chest is puffed-out believing you have some sure guaranteed winners, and you are about to pull the trigger and enter these long positions, you are going to lose your shirt. You do not want to be on the long side like that the way this market is set up. Keep those stocks on your long watch list and in a few weeks when the market is likely far lower, maybe give them a whirl then. In the meantime, consider a short 1x inverse ETF such as SH, DOG or PSQ, or many others. If the stock market begins its multi-week decline, these positions will make coin, and then you can brag to everyone at the office water cooler that you enjoyed the big drop in the stock market since you were short. They will be aghast at your chutzpah to play against the market, why that is un-American, co-workers may form a different opinion of you, but alas, they will rationalize the fact that you sell stocks short because they will say, "well, at least you are not a nasty ole speculator!"

Whhhheeeee! Whooopie! We're having the time of our lives! Take another swig of Fed whiskey. No thanks, I have ECB champagne and Harry over there is drinking PBOC rice wine. Frankie is buying stocks like crazy after drinking that BOJ sake firewater. Woo-hoo! Wheeee! The Federal Reserve, ECB, BOJ and PBOC are the four central banker horsemen of the financial apocalypse. The Fed is the last to ride into the New York Stock exchange on its pale green steed. The horse bends the front legs and kneels, and snorts black smoke, the clouds darken, the wind howls. 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 2:30 PM EST: By the time all that windbag writing was finished above, the next 1-hour candlestick prints and the MACD is flat, that is neggie d, so the top is in on the 60-minute chart. Let's look at the 2-hour. The SPX 2-hour chart has a long and strong MACD and wants price to jog, down then up, to place the top and that is zero to 4 hours. So a little more gamesmanship then mentioned above where the top is anytime now through say mid to late morning tomorrow. It is only 2:30 so there is another 90 minutes on the agenda today. Those sneaky bulls may keep things elevated into that jobs report on Friday morning. The stock market is such a piece of crap, however, expect a big drop anytime. As has been mentioned over the last month or two, do not be surprised if a flash crash type event occurs. The top of the orange gap is 3848-3849 so that will be an important resistance test. HOD is 3847.

Note Added 3:10 PM EST: The SPX comes up to test 3848 and is spanked down. Wait and see if it tries again. This could be the top right here. There may be fun ahead into the closing bell or over night tonight. This last 65-minute trading segment of the day begins at 2:55 PM EST so watch to see if big sell blocks come into the market between 2:50 PM and now which may signal ugliness but stocks are hanging in there. That MACD line on the SPX 2-hour may be holding up the top an hour or two into tomorrow morning. Copper is rallying which helps bulls. VIX is jammed lower to the 23.32 palindrome. VIX HOD 25.43. Bears must push VIX above 24.90, as per the Keybot the Quant algorithm. Until then, bears got nothing; that is when they will growl.