SPX S&P 500 Daily Chart; H&S; Expansion Pattern

The SPX comes off the top but the central bankers are quick to promise more monetary stimulus and Sleepy Uncle Joe Biden, who's movin' kinda slow at the junction, promises fiscal goodies at everyone's front doors. The SPX is favoring the purple expansion pattern now coming up for a potential kiss of the upper trend line. Price just filled in the gap left behind 3 days ago so bears should be happy that is buttoned-up (price no longer has this as a reason to come up in the future).  The lower band was drastically violated and price drops to print the Tweezer Bottom at the neckline of the H&S. Say what? Hey Harry, what did he say? Did you get all that? Maybe, sumptin' about tweezers and necks?

The yellow lines are the standard deviation bands and the lower band was violated 2 days ago so you knew price was getting out of whack to the downside. The two long lower shadows, or tails, of the two candlesticks look like tweezers. When you see that, it usually indicates a Tweezer Bottom pattern and price recovers quickly. And it did. 

The blue lines show the head and shoulders (H&S) pattern with the Tweezer Bottom providing touches for the right shoulder to now form. The head is at 3950 and the neckline is 3725 so the difference is 225 points. When price comes back down, and fails through the neck at 3725, the downside target is 3500. For fun, if you continue that lower purple trend line in your mind outside the page, it will intersect the 3500 level about the first week of April or so.

The brown circles show 10 distribution days with the smart money sloughing off shares to the dumb money. Pump and dump. That is why the analysts keep telling you to buy, buy, buy. Their wealthy friends, and themselves, have time to keep ditching shares. Here you go Aunt Millie, I have some AMZN for you. You need some AAPL too. Oh, there's Mr Willoughby. It is a shame you are in a wheelchair sir but here take these TSLA and FB shares and you will be set for life. Thank you sir, now I will no  longer have to eat franks and beans each night and will instead dine on steak, fine wine and caviar. We are probably in for a crazy time over the coming days and weeks. 

The Aroon green cross paved the way for euphoric party fun but the red cross has not yet occurred to reward the bears. The $1.9 trillion fiscal stimulus package ws approved by the Senate on Saturday so it goes back to the House tomorrow and they will approve the changes and then Sleepy Joe will probably wake up, have a cup of black coffee, and sign the bill into law. Everyone is bulled up on the mountains of cash money that is raining down upon America. Perhaps, however, you can lead a horse to water but you cannot make him drink. People are more concerned than a year ago and prone to save the money or pay off debt. Who wants to start a business in the middle of a pandemic? If the US slips into the virus Hell again, right this minute things look okay, there will likely be Hell to pay in the stock market.

The SPX is enjoying a rally today after trading all over the map. The SPX is up 34 points, +0.9%, to 3875. The 20-day MA is 3884 so price is tapping at this ceiling trying to punch up through. It is also the upper purple trend line resistance. So it is do it or die for the bears to hold the line here. If the bulls can touch 3900 again, that may give them further upside confidence.

The chart is messy now after the stimulus offerings. Price is choppy, perhaps sideways.  On the SPX 2-hour, price has a few more hours to float higher, the indicators are long and strong. The SPX weekly chart topped out, remember, that pesky MACD line sneaks out that tiny higher high, and price floats higher again, but the top should hold and the multi-week downturn should continue along. On the SPX monthly chart, all indicators are neggie d except for that MACD in the stratosphere. As this month plays out, the MACD can easily go neggie d but regardless, the major multi-month stock market top continues to form right now in real-time with only a month or so left in it at best. The charts will pinpoint it as time plays out.

So there is likely some slop ahead, equities will float a bit higher, look to short the market off the 2-hour chart in a day or two which will likely begin next leg down. New moon is on Saturday so stocks would be expected to end the week and begin next week soggy. It sounds odd to hear a dire forecast with all the money sloshing around but the charts say what they say. Perhaps everything is priced-in to the umpteenth degree. 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 1:04 PM EST: Wheee! Whoopie! It's a Tepper Rally. Wheee! As the Federal Reserve keeps printing money year after year since March 2009, David Tepper of Appaloosa hedge fund would always show up on television when things looked gloomy. He would say the Fed will always keep printing money and voila, another Tepper Rally would occur. Every time he showed up on television it was good for at least 30 handles on the SPX. The SPX is up 34 points right now. Tepper strikes again. Everyone and his brother remain bullish the stock market. The SPX is up +0.9% to 3877. Everything is sun shine and soul shine as Warren would sing. Blue skies and rainbows as men search for their souls.

Note Added 1:20 PM EST: The 20-day MA is at 3884. Price taps 3881. This is the back test of the 20 and the battle for the remainder of the day. Bulls win big above 3884. Bears win big if the 3884 resistance holds.

Note Added Tuesday Morning, 3/9/21, at 6:25 AM EST: The bears hold the line at the 20-day rejecting the bulls. Price tumbles lower after the bears' successful back kiss and tests the 50-day MA at 3825, and falls through that to end the day at 3821. That is very bearish action. Overnight, the Fed jumps into action, throwing a black hood over Uncle Vix's head, dragging him to a back room where he is beaten with a rubber hose and kept low on the floor. S&P futures pop as volatility drops. VIX 24.50. The Fed maintains its jackboots on the throat of Uncle Vix and S&P futures float nicely higher up +43. The Dow shot +1% higher on Monday and the Nazzy Comp fell -2.1% the largest divergence in these indexes in nearly 40 years. That's interesting. This morning, dip-buyers are pushing tech higher. S&P +42. VIX 24.43.