SPX S&P 500 Daily, 2-Hour and 1-Minute Charts; Silly -20% Bear Market Threshold Comes and Goes; United States is in a Bear Market Ignore the -20% Metric; Positive Divergence On Hourly and Daily Charts

Global markets remain erratic and unstable. 10 days ago a tradeable bottom was in play but thwack, the Monday morning retail crowd hit the sell button on 5/9/22 representing the first day that Joe Sixpack and Jane Retail have lost confidence in the US stock market.

The nosedive on Friday, 5/20/22, was likely due to the bombshell news that Hillary Clinton is linked to the scandal with the Trump/Clinton election. It is confirmation, proof-positive that America is corrupt like all other countries. On top of that, the dirt will come out from the Capitol Hill Riot investigation and testimony about how Trump was trying to overthrow the election he lost. The country's leaders, lawyers and lobbyists are rotten to the core so people are losing confidence in stocks.

The SPX daily chart is a lot of spaghetti. Everyone is on the doom and gloom train and as typically occurs when sentiment is ultra negative, stocks will bounce. The green lines show the positive divergence in play so price is fueled-up and ready to pop higher. Stocks recovered late day Friday after traders realized yes, we live in a corrupt country, we all knew that already.

Price is extended below the moving average ribbon and needs a mean reversion (higher). The expectation is for a bounce in the daily time frame and S&P futures have been higher overnight from +10 to +60 now up about +20 points 3 hours before the opening bell.

The ADX is only at 28-29 on the verge of becoming a strong trend lower in price, but not yet. If the bottom fell out in stocks from here, the ADX will shoot higher. However, the last strong trend was in March when stocks were falling apart. That downtrend that ended in March was a stronger trend than the current downtrend hinting that stocks should bounce.

The Aroon shows the green bull line down in the basement at maximum bearishness. Stock bulls have thrown in the towel and do not think equities can go up again in the daily time frame (this is when stocks usually rally). The red bear line is at the maximum euphoric 100 level. The bears believe 100% that stocks will continue going lower and lower (typically this is when stocks will rally). The Aroon is at maximum bearishness. The bulls have all left town.

The black circle is the death cross where the 50-day MA crosses below the 200-day MA ushering in negativity. Remember, Keystone always tells you that stocks will actually bounce when the death cross occurs but the stock or index will remain weak and weaken further if the death cross remains in place. The above chart is textbook death cross. Stocks bounce when everyone is running around shouting "death cross" and then equities roll over again since the death cross remains in play.

The sideways blue channels and downward-sloping green channel are in play. If stocks rally from here, the 4090-4100 is an upside target. Price will likely want to migrate to the upper green trend line as the days progress which is in the 4200-4300 area.

The media is pumping the -20% bear market drama to attract eyeballs. It is a stupid metric. The -10% pullback from a record high is a 'correction' and a -20% pullback is a 'bear market'. It is a jackass metric that is why you will only hear professional traders mention it because it is in the news.

Keystone has given you 3 metrics that are far superior. The number one metric that dictates a cyclical bull market from a cyclical bear market is the SPX 12-month MA cross. Also the NYA 40-week MA cross. Third, check the slope of the 150-day MA since it tells you if a stock or index is in a cyclical bull or bear. The pink line above has clearly rolled over and along with the other 2 Keystone metrics, proclaim that the UNITED STATES IS IN A BEAR MARKET. Capeesh? Forget the -20% stuff but lets have some math fun at its expense.

The all-time intraday record high for the US stock market, the SPX, the S&P 500 Index, is 4818.62 on 1/4/22 and all-time record closing high is 4796.56 on 1/3/22. The 4819 is the highest number printed for the S&P 500 in history and it occurred 4-1/2 months ago.

On the all-time high basis of 4819, the correction began at 4337 and the -20% bear market is at 3855. For the all-time closing high at 4797, the correction started at 4317 and the -20% bear market is at 3837. There is no right or wrong in which one you show allegiance. It is good to follow both. If you blinked on Friday, 5/20/22, or got up to go to the can, you missed the bear market. The 2 little red lines show the dip into bear market territory as per the silly -20% metric.

Stocks are ready to rally in the short term daily time frame. This is verified by the SPX 2-hour chart set up with possie d (green lines). Stocks want to bounce in the daily and 2-hour time frames and the only thing that can change that is negative news hitting the wires. The 2 red bars represent the bear market that lasted 10 minutes (based on the silly -20%).

The 2-hour chart shows the nice set up on 5/6/22, and stocks bounce, everything is going swimmingly into the weekend. Then, Monday, 5/9/22, after a weekend of negativity that the sky is falling, Joe Sixpack hit the sell button. The retail investor is smart taking the money off the table. In past years, retail was the dumb money that would stand around holding the bag. There will still be a lot of these losers but nowadays traders and investors are more savvy to the corrupt Wall Street game.

The SPX 1-minute chart illustrates the silly -20% bear market metric. A bear market is at 3855 based on the all-time high and at 3837 based on the all-time closing high using the -20% yardstick. The SPX loses 3855 at munch time Friday but the bear market only lasted 2-1/2 hours since the S&P 500 pops back above 3855 at 3:30 PM EST. Humorously, whew, that was a close one.

The 3837 level fails at 12:40 PM-ish and the television announcers are animated in frenzy yelling "bear market; run for your life." Then, at 2 PM, the bear market was over. As Emily Litella says, "Nevermind." But wait! A few minutes after 2 PM it is a bear market again. Oh no. The sky is falling. But don't worry. This bear market only lasted about 45 minutes. The bear market is over. No wait! The bear market starts again at 3 PM. No, it doesn't. Wait, the bear market ends at 3:20 PM. Silliness.

Use Keystone's 3 metrics as stated above. All three confirm the ongoing bear market. 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.