Goodnight Irene, Irene goodnight. Overbot conditions, rising wedges and negative divergence identify the stock market top. The ADX's clearly show that the strong upward trends are lost. A neggie d spankdown is on top and stocks will retreat for several weeks forward.
A flash crash remains on the table as well as any sudden crash. Stay extremely nimble if long any position. Ditch the longs and go short. Are you ready for the fun?
The VIX slips to 18.53 and S&P futures pop +16 pre-market on Thursday, 4/1/21, April Fool's Day, although humorously, this ain't no April Fool's joke. Prepare to lose a lot of money if you are long the market.
Due to all the obscene money offerings by the Federal Reserve and Congress, stocks have remained elevated since late last year. The S&P 500 has moved sideways, with an upward bias, through 3700-4000 for the last 4 months; a 300-point range. The 20-day MA at 3917 and 50-day MA at 3885 would be initial downside support tests, and then price will seek the 20-week MA at 38 hundo which teams-up with the lower standard deviation band on the daily so a healthy bounce would occur there. Then perhaps down to the lower band on the weekly at 3568. It is reasonable to expect 200 to 600 points of downside over the coming few weeks.
Interestingly, this may, or may not, be THE top. It is so close you can smell it. Again, due to the money-printing and Congressional largess offered to Americans, the game continues. You have to wait until all the pieces line up properly. The SPX monthly chart is in neggie d but the MACD and histogram are long and strong. Thus, the stock market may top-out this year with a double-top over the next month or two which will be THE top. The monthly chart wants price to come back up after the multi-week selloff occurs to make a matching high which would be the 3950-4000 level when the MACD and histo will go neggie d.
But, the monthly chart may pull a fast one and it will be apparent over the coming days. The March numbers are cast in concrete. The April candlestick on the SPX monthly chart begins printing at 9:30 AM EST. With futures up, price will make the matching price high right from the get-go for April (this is good for bears). Thus, as the multi-week selloff occurs going forward, the April monthly candlestick will be drawn lower and the monthly chart may display neggie d with the MACD and histo which would signal that we may be witnessing the multi-month and perhaps multi-year long-term top in the stock market right now. This minute! Today! This week! The charts will provide that answer concerning THE top over the coming days and say, week or two.
Exciting stuff. As everyone parties like its 1999, no one realizes that the stock market is printing a massive top right now (or within 2 months). Everyone is salivating at the Fed and Congressional money flooding into the markets and economy. Folks proclaim a huge boost to economic activity going forward with stocks rocketing to the moon. Everyone is all-in. The two charts above say that they are all wrong concerning the stock market.
This is the last call. Many of you may be prepared for the downside, but the majority of Wall Street enthusiasts are leveraged long refusing to leave the party. They will get what they deserve. Keystone has the knives out and they are sharpened; it will be bloody. Are you ready to receive the punishment for greed?
This multi-week top is potentially THE long-term multi-month stock market top, if not, then THE top will occur in May. Are you ready for the festivities? What a joyous springtime, if you are short. 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 8:08 AM EST: Traders are joyous over the guaranteed riches they see ahead. The eyes are wide with dollar signs inside the pupils. Investors are tripping over each other to buy, buy, buy! S&P futures are up +18 and the VIX goes sub 18 to 17.98; a 17 handle! The Fed has its jackboots on the throat of volatility keeping it down so stocks can remain elevated to protect the wealthy. 10-year yield 1.707%. Gold 1718. US dollar, USD or DXY, the dixie, is at 93.16 off the day's high at 93.34 rallying this year thus far. Nearly everyone (sans Keystone) on Wall Street said the dollar would be weak all year long; they are wrong. Euro 1.1747. Bitcoin 58,640.
Note Added 9:00 AM EST: On Bloomberg, Renaissance analyst Neil Dutta proclaims, "It's (economy) getting stronger." Dutta says do not pay attention to the higher Jobless Claims released this morning at 719K. He says sentiment is at the highest since 2017 so the Claims numbers are worthless. That is an interesting take. Dutta decrees, "People suffer from cognitive dissonance." The picture is painted for blue skies and rainbows forever.
Note Added 9:09 AM EST: Since it is EOQ1 and start of Q2, there is new money coming into the market explaining buoyancy in futures. President Biden also promises more trillions for infrastructure (sell the news?). S&P +19. VIX 18.32. Traders are singing songs and carrying on so grateful that the stock market offers limitless gains forever.
Note Added 9:30 AM EST: The SPX rocket launches to 4,000 on the opening print. Wheeee! Whoopie! Par-tay! Sarah the screenprinter is tossing out the "SPX 4K" hats. What a glorious Gilded Age it is! Hmm, mine says Made in Bangladesh.
Note Added 9:35 AM EST: The SPX prints the highest number in history at 4002.42, 4's and 2's, but the day has only started. VIX drops to 18.22 with a LOD at 17.97. The SPX 2-hour chart will call the top and interestingly, it is already neggie d across all chart indicators. A gap-up like this should lead to strength through the morning and sometimes the whole day, again, the new money at the start of each quarter always creates some buoyancy. It is odd to see that the SPX 2-hour chart pops around 30 handles to a new all-time record high at 4002.42 but is already in neggie d. A candlestick will print at 10 AM, noon, and 2 PM on the 2-hour chart. As the SPX gaps-up to a new all-time record high, the SPX daily and weekly charts remain in full neggie d as shown above.
Note Added 10:32 AM EST: The SPX prints the highest number in history at 4006.95, but the day has only just begun. VIX drops to 17.96 for the LOD. It is a joyous fun day at Itchykoo Park once again. It's all too beautiful. The SPX 2-hour is in neggie d, however, you see the MACD over the last four candles a hair higher. This is only VST (very short term) price action so this momentum should only create an hour or two of buoyancy. Bulls need to jam price higher from here to 4020-4030, immediately, to create more thrust, to prove they mean it and enable it to have a couple days of run room. Bears need to place a lid on the action immediately and the whole thing should slowly roll over and unravel going forward. The 2-hour at noon will provide another clue.
Note Added 10:39 AM EST: The SPX prints the highest number in history at 4007.15. VIX prints a new LOD at 17.93 confirming the price high. The bulls are telling everyone to kiss their arse, they are going to Party Town. Yippee! Wheee! Whoopie!
Note Added 10:45 AM EST: The SPX prints another new all-time high at 4007.60. VIX prints at 17.93 at this low number for 10 minutes (not going lower). The bulls are going for the thrust move; let's see what they got. Everyone's on the dance floor. The Shiny Happy People are buying stocks with reckless abandon. What a groovy world it is...... unitil .......
Note Added 11:04 AM EST: The SPX prints another new all-time high at 4009.88. VIX prints a new LOD at 17.81. The bulls pull out all the stops and proclaim that they plan to Rock and Roll All Nite long and par-tay everyday. You only live once. Woo-hoo!
Note Added 12:11 PM EST: The SPX prints another new all-time high at 4010.90. VIX is at 18.02. For the new joyous high at munch time, the VIX should be sub 17.81 and down at 17.60 or 17.50 but, it is not. The bulls, like The Pointer Sisters, are so excited they just cannot hide it. The market has lost control and the bulls like it. Whoopie! The MACD on the 2-hour is still heading higher VST so the bulls are trying to keep things afloat for another hour or two. Overall, the SPX 2-hour, daily and weekly charts are all in neggie d calling a multi-week top now but the promises of limitless Fed and Congressional money keeps sending stocks higher.
Note Added 12:21 PM EST: The SPX prints another new all-time high at 4011.56. VIX is at 17.99. The thrust is on to try and keep it going for a few days. The bulls can see Paradise by the Dashboard Light and are pushing as hard as they can to pull it off and provide breathing room. The day still has a long way to run.
Note Added 12:29 PM EST: The SPX prints a new all-time high 4012.20. VIX 18.03. The thrust continues.
Note Added 12:48 PM EST: The SPX prints a new all-time high 4012.75. VIX 18.17. Both stocks and volatility move higher. Investors gleefully exclaim the Future's So Bright that I Gotta Wear Shades. Pass a pair of those rose-colored glasses. The bulls say things are going great, and only getting better. Wow. It's beautiful!!.
Note Added 1:43 PM EST: Price comes back up once again teasing another record high. It is interesting to watch history in the making. Business schools and market participants will be taking about this period for decades forward. There it is. The bulls stab the bear's ribs and ran. The SPX prints a new all-time high at 4013.04 with the VIX at 18.08. Lucky 13. On the SPX 2-hour chart, the indicators are neggie d except the MACD maintaining and perpetuating the thrust move. The RSI is a sliver higher in this VST (last 6 hours) so the thrust move is pulling the RSI higher. Placing this VST chatter aside, the 2-hour chart remains fully negatively diverged over all indictors over the last month period. The chart is set to fall at anytime, but that sliver of juice in the MACD and drop of juice in the RSI keep the game going. The 2 PM candlestick will start shortly on the 2-hour chart. It is interesting price action. All you have to do is blow on it, and the stock market may fall right over, despite all the euphoric off-the-charts joy. The minute, hourly, daily and weekly SPX charts are all in neggie d and the only thing hanging on is the MACD on the 2-hour trying to create a couple more hours of buoyancy to limp things into the closing bell. We shall see if she falls into the close.
Note Added 2:04 PM EST: Breathe on it and it should fall down the cellar stairs. The new candlestick begins printing on the 2-hour chart and you can see the RSI is neggie d again in the few-hour period and over the last month. Equities are at the pinnacle. Stocks are on the high-dive but stupidly drank Fed wine and ECB champagne before climbing the multi-story structure. The drunken diver yells to the crowd below that he can fly. His Speedo's are stuffed with stock certificates. He teeters on the edge of the slippery platform while juggling a bottle of BOJ muscatel.
Note Added 2:47 PM EST: The SPX prints a new all-time high at 4014.34. VIX collapses to 17.91 but above the LOD at 17.81. The VIX should be in the low or mid 17's considering the orgy highs every 10 minutes. The last 65-minute trading segment of the day begins at 2:55 PM EST so watch the 2:50 to 3:00 time slot to see if any of the robots begin executing large-block sell programs, or not. Stocks are at the Wile E Coyote moment but the bulls are trying to live another day.
Note Added 2:58 PM EST: Price pivots at 2:58 PM so let's see if the bears got anything or if they go home and give it a go in the morning. There's a couple points off the top to 4012. There's 4011. It may be gaining oomph, if so, it would trigger other sell programs. VIX is behaving itself at 17.84 with the SPX at 4011. Here's the pulse up so will the bulls bring it back up to the top or does it get flushed?
Note Added 5:57 PM EST: The SPX prints a new all-time high today at 4020.63 and new all-time closing high at 4019.87. VIX plummets to 17.29 closing at 17.33. The thrust move succeeds with the SPX daily chart sneaking out a VST with the RSI, however, the neggie d remains for one month back and longer. Thus, the bulls pushed enough to set up a potential jog move which is one day down and the next up which would be the top. Good Friday is tomorrow so the stock market is closed but the Jobs Report is released. Bulls are joyous with a whisper number of 1 million (said with the tip of the pinky finger touching the corner of the lips) jobs on tap. Stocks are usually bullish into a holiday weekend. Thus, the technicals (charts) are all set up for down, down, down, but the seasonality in front of a holiday weekend, the expected 1 million jobs number, the Fed largess, the Congressional largess, the Biden infrastructure joy boosting EV's, and the new money coming in for the start of Q2, overpowered the charts, creating up, up, up, for today. So we are left to ponder over the weekend if this is The End. The top that will begin a multi-week selloff is expected to occur next week probably Monday or Tuesday. Cara Mia why must we say goodbye? Because the charts are in negative divergence, that's why. It will be interesting to see where the put/calls land today. The SPX monthly chart begins the new month, April, with a price high so the indicators can be compared for the whole month ahead and the RSI, stochastics and money flow are already cooked. The MACD and histogram are higher but, as explained above, if the market flushes, which is expected, you will see these 2 parameters drop and if they slope lower that would lock in THE long-term top on a monthly basis (major top) right now rather than a month or two from now after the multi-week down move occurs and a recovery higher. These are epic times and interestingly, it is watching the whole thing unfold in front of you, but everyone around you does not understand what is happening. Or perhaps it is that Keystone does not understand? What do you think? It is wunderbar (wonderful). Quite fantastic. Keybot the Quant remains long so you will know things are real when the algo kicks in on the bear side, however, this may not occur until the SPX rolls over a few percent off the top. Fundstrat's Tom Lee looks for a potential upside face-ripping rally. The Nasdaq went straight vertical in the dotcom bubble which is probably what many are thinking about. Lee says, "There is no sign of a top." What do you think? Flash crash ahead? Maybe? You don't believe that we are on the Eve of Destruction, do you? SPXA150R is at 92.38. Go short and do not even think about it. If long, you will lose money going forward. Think about it seriously especially if you are near retirement. If you leave your money long in the stock market, you are going to lose a big chunk of it.
Note Added 7:40 PM EST: CPCE drops to 0.42 and CPC down to 0.72 continuing to flash the red warning signals of uber complacency. Everybody is fearless and does not expect stocks to ever sell off again and if it does happen in a tiny way, the Federal Reserve will immediately pump the market up again. Thus, no need to worry, only buy, buy, buy. It is fantastico. It will end in a bloodbath.
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