SPX S&P 500 Weekly Chart; SPX Prints New All-Time High at 3960; Overbot; Rising Wedge; Negative Divergence; Upper Band Violation; Price Extended

Wheee! Whoopie! The ongoing easy money monetary policy from the Federal Reserve and the $1.9 trillion pork-filled fiscal package from the US Congress sends the S&P 500 to a new all-time record high at 3960.27 and new all-time closing high at 3939.34 taking out the mid-February highs. Traders are mainlining ECB heroin and snorting BOJ coke declaring that every day is a euphoric joyful par-tay. King Biden is the master of ceremonies this evening providing a prime time address to America; his handlers are getting him ready with a pot of black coffee. Forget that folks, come along with me to a land of make believe where rock 'n roll is king.

As the circus plays out this week, time is provided for price to come back up. Remember, we had the first move off the top but that pesky MACD on the weekly chart was still long and strong. We needed price to come up one more time on the weekly basis to finish things off. It's cooked. You can see the MACD is now neggie d (red circle). All the indicators are topped out. The fuel tanks are empty. It is over in the weekly time frame with a multi-week down move about to begin. Isn't that wild? With all the over the top party euphoria and everyone convinced that stocks will rock and roll all year long, the charts say not so fast.

Price has not touched the 20-wk MA since November and has not touched the bottom band since March one year ago. The middle band, the 20-week MA, is at 3728 and the lower band is at 3409. Price is elevated above the moving average ribbon needing a mean reversion. Just think, for price to retrace properly and go beneath the 200-wk MA, that would be sub 2900.

As always, the timing of the charts has to be grouped together into a path forward. We know the weekly chart is now cooked and a multi-week downturn will begin at anytime. So when does it start? The shorter term hourly and daily charts will tell you that. The SPX has momentum gapping up the last few days each day as the hype with the fiscal package hit fever pitch. The daily chart is in full neggie d also but it has that momentum aspect. Thus, the bulls may try to squeeze a few more drops of joy out for a few hours or day or two.

Considering the nosebleed territory and this four-month euphoric game getting long in the tooth, expect anything at anytime including a major crash and/or flash crash. You can wake up any morning forward and who knows, the market may not even open. This is serious business, folks, so it is hilarious to see everyone partying, singing, dancing and boozing without a care in the world.

If you bring up the SPX 2-hour, you can see all the indicators are cooked with neggie d but the MACD is still slightly long and strong. You know what this means. Price needs another jog move, down-up, to give time for the MACD to go neggie d when price makes another matching high. On a 2-hour chart, a down-up move is 2 candlesticks so the stock market top will occur within say 4 hours so that is by 1:30 PM EST tomorrow. However, and this is coolio, price is at a record high now. Thus, when the opening bell rings in the morning, the candlestick has a high probability of starting the session at a matching price high. This then permits the indicators to be perused and if the MACD line is neggie d out of the gate tomorrow, the top is in from the get-go.

So stocks will top out now and roll over on a multi-week basis. The daily chart may put up a fight for a day or so but lets say this rolls over and dies without the drama. The stock market is so long in the tooth, just blow on it and it will probably collapse. So let's say the multi-week downturn starts now. The new moon is Saturday and stocks are usually weak through the new moon so that gels nicely with a selloff say now into Monday.

The Fed is on tap on Wednesday so Tuesday and Wednesday may be up days. It is OpEx week so a Tuesday low will typically lead to a Wednesday high. Thus, if you simply group together the background factors and seasonality, stocks would be expected to be soft into Monday then buoyant Tuesday-Wednesday, then negative after that.

The stock market is cooked for the following weeks but is that the final death nail? The monthly chart is cooked with neggie d except for the MACD line. This one you have to watch since it desires price to come back up again after the multi-week selloff ends say in April-May. The charts will provide the answers as it all plays out. That $1.9 trillion package is outrageous and time will tell if it impacts the charts. For now, it appears that most of it is priced-in. The stock market is placing a m ajor long-term top now that will last a few months if not a year or two or more. This is THE top right now but if not, and the monthly chart will tell us in a couple weeks, THE top will be, say, April. It will be interesting to see if that package can save the day. Keybot the Quant is on the long side so it will be important when it flips short.

Of course, the central banks will have a lot to say about the direction of markets going forward. Confidence in the Fed is shaky. Pope Powell will don the pale green robe next week and try to pump and cheerlead the markets some more but we are at the end game folks. Expect craziness. Look at the big day to day and intraday moves with the VIX at a paltry 21-handle. Just think how wild it will be at a 30, 40 and 50+ VIX. The Dow will be moving 1,000 points intraday easy. It will be fun. Biden's words will impact infrastructure stocks in the morning.

Keystone is holding index shorts and started to short the banks this afternoon. You are an idiot if you are not holding short positions. Hang on tight, folks. Leave that party early and get your act together. The cops are on their way and everyone is going to jail, except for the band of course. 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 Friday Morning, 3/12/21, at 9:15 AM EST: On Bloomberg, Credit Suisse analyst Jonathan Golub says there are no worries about the stock market until next year at the earliest. Golub says do not let the fear hold you back. Buy, buy, buy. Cantor, JPM, CS, GS, Oppenheimer and UBS keep cheerleading their SPX target ranges of 4250-4400. With the passing of the $1.9 trillion stimulus, every analyst on Wall Street guarantees higher stock prices, blue skies forever and a Wonderful World. S&P futures are down -18 marginally lower overnight. VIX is at 22.666 an interesting number.