SPX S&P 500 Weekly Chart Overbot; Rising Wedge; Negative Divergence; Upper Band Violation; Distribution

The markets remain erratic and unstable and the price action is historic. This epic market behavior, that business schools will be talking about and studying decades from now, continues for the last four months. The Reddit crew initiated short-squeezes on GME, AMC and other heavily-shorted stocks, and then hedge funds jumped on board to also screw the other hedge funds that were shorting the stocks.

But the party ends, and the smoke clears, and as the street sweeper tosses the last red Solo cup into the trash bin, the witch-hunt begins. Congress wants to find the bogeyman. Reddit traders that boasted to their significant others that they made a ton of money on GME as it went up, are now too embarrassed to say they are in the hole after the sudden retreat (GameStop remains a turd going forward despite loyal niche customers). They want to blame someone and they know who caused their heartache. The hedgies are complaining that small-time traders outsmarted them costing their kingdom a few billion. They want blood and they know who to blame. The media wants to identify someone responsible for all this volatility and market mayhem and they worry that things may become worse. Who is causing this trouble?! Who is this sick individual that causes such strife, chaos and emotion in markets?!! Who? Tell us! Who is he? Where is he? Everyone zeroes in on the one person that is always blamed when things go amuck in markets. Get him!! He is the fault of it all!! All of you know who it is. It is the same person that is blamed every time. Everyone all together, shout out the name of that terrible individual that is responsible for all things bad in markets....... all at once now..... 1, 2, 3, ....... THE SPECULATOR!

The speculators, minding their own business, are always blamed for everything that goes wrong in markets. It is hilarious. Yes, those big, bad speculators are meanies, they ruin the markets for everyone, and they hurt orphans and elderly women in the process, maybe even your grandma. Alas, it is a weight us speculator's must always shoulder.

Jocularity aside, the top is in. Remember, you had to wait for the MACD to go neggie d on the weekly SPX, and it has now, so the top is in on the weekly basis. She should begin rolling over now and headed for a multi-week decline. The constant deliverables and drumbeat of more monetary and fiscal stimulus, and the vaccine happy hype, have created this nutso four-month topping process. It is very atypical which would be expected since the markets are likely at a historic point in time.

You do not want to be in the stock market on the long side going forward. Get out. Tell your friends to get out. To make you understand, follow Will Rogers, the scholar of wit, who said, "I am not worried about a return ON my money, I am worried about a return OF my money." Simply cash out of the longs and let the money sit there in cash. Bring on or add to shorts. 

Price made a matching high and the MACD is negatively diverged along with the other indicators so the gas tank is empty. There isn't any more fuel available to move higher on a weekly basis. The red rising wedge is ominous; a collapse to 2300-3200 is easily doable from this pattern. The top band was tagged so the middle band at 3607 and lower band at 3266 are on the table.

The money flow is squeezing out that tiny bit of positive joy trying to provide enough strength to extend the upside for a few more days, but you can see that the money flow is neggie d over the last year. That means even if money flow can buoy prices it may only be for another week.

The blue boxes show the biggest weekly volumes since the initial pop off the March low due to the biggest fiscal (Congress) and monetary (Federal Reserve) money pump in world history. Since these are the two largest volume weeks, and equal, what is the story on price? In early November, the gap-up orgy came with a flurry of volume and foretold of more stock market highs ahead. Last week's volume candlestick is red and the selling took prices down to tap on that lower trend line of the rising wedge. Both blue volume boxes are equal but in November price was down at 3500-3600. The same amount of people are selling now but price is far higher. Therefore, price will want to come down to 3500-3600 for a test and assess the volume that week against early November.

The brown circles show distribution weeks occurring since the spring and early summer orgy pump by Pope Powell, King Donnie, Barrister McConnell and Princess Pelosi. That is seven weeks of distribution in seven months (perhaps the seventh son of the seventh son announces the top along with the Seven Trumpets). One week out of each month, since the summer time, the smart money is sloughing-off shares to the bag-holding sucka's. It is a distribution phase. It helps to hype everything in the media; the classic pump and dump.

Have pity on Brian the know-it-all office guy. He is in the break room right now boasting that he bot AAPL and AMZN stock and already owns GOOGL and TSLA. Coworkers cordially nod as they try to walk around his ego and exit the kitchen. The smart money can always count on the Brian's showing up. Are you a Brian? Young Emily, the pretty and smart administrative assistant, rebukes Brian's advances after he asked for a date. Emily flicked him off with the back of her hand proclaiming that she would never date a man that did not have respect for neggie d.

So this will be fun to watch over the coming weeks. February should be nasty. It depends on how fast she wants to fall. Taking a gander at the SPX daily chart, price came up to tap on that gap from four days ago. S&P futures are up +14 with VIX at the 24.42 palindrome. Bears need VIX above 25.02 if they want the market to sell off. The pop in the cash index after the opening bell would fill that gap on the daily and button things up for the top side. It is good for bears since price would not have an excuse to come back up once it started collapsing. It is some choppy sideways slop developing on that chart. The SPX was knocked down with neggie d on the daily chart and does not appear to have the juice to get back up to the record high at 3855+.

Looking at the SPX 2-hour chart, you can see how price partially filled that gap. It's chopping sloppy like the daily. The shorter duration charts do not say much right now, give them a few more hours or day or so. On the SPX monthly, it is topped out as well. The jury is out on the MACD but the other indicators are neggie d and will conspire with the universal neggie d on the weekly and create the downside action over the coming weeks.

Once stocks drop and charts begin adjusting to the price action, the MACD on the monthly chart can be assessed. This is dictating whether the long-term multi-month and perhaps multi-year top is occurring right now, or, it will occur about two months out say in March or April after stocks recover from the multi-week selloff. For a multi-decade student of the markets, this is the Superbowl. In 2050, if the world lasts that long, folks will opine about Q1 and Q2 of 2020 and how it was such an epic year in markets.

The bulls keep telling everyone to buy. Of course they do. They are receiving manila envelopes containing circulated $100 dollar bills with little notes that say pump ABC stock or pump XYZ stock. They must keep the bag-holdin' sucka's interested all the way up through the end. The idiot public is taking stimulus checks and putting them into the stock market. Are you one of these knuckleheads? You are buying at the top. That is hilarious and Keystone has to belly-laugh out loud, however, it will end in tears of bitterness, it always does.

Wharton economics professor Jeremy Siegel remains on the bullish soap box proclaiming stock market joy and happiness ahead. He said he will be bullish no matter what and high inflation will not be a worry. Siegel proclaims a bullish economy and stock market ahead. Canaccord's perma-bull Tony Dwyer opines that a 5 or 10% pullback may occur but quickly offers it as a great buying opportunity. Dwyer says it is a multi-year game of upside ahead and he plans to buy the dips going forward. What are you going to do Sonny and Girly? Do you believe what a nasty ole speculator has to say?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.