SPX S&P 500 Daily Chart; Topping Process at Top Trendline of Multi-Month Sideways Channel at 3800-4150 Continues

The topping-out drama on the SPX daily chart continues. The negative divergence on the SPX 2-hour chart along with the neggie d (only the RSI, histo, stoch's) on the daily conspire to create the sogginess during the tail-end of the week of course ushered in by the peak of the new moon.

But the price action remains messy. April is chop suey directionless markets as evidenced by the four sideways moving averages. This year is choppy slop. The shorter term 20-day MA is ramping higher following price but the 50-day MA remains flatter than a newlywed's souffle.

The SPX 2-hour chart receives its neggie d pullback but the drop is unimpressive and minor in nature. The 2-hour chart is staggering sideways like a drunk in Times Square last night. The 2-hr chart may be waiting for something (a potential nudge higher in price).

The daily chart above shows the multi-month major sideways range at 3800-4150 with the thick purple lines. Keystone likes purple crayons since they taste the best. Let's pick apart the topping action to see what is going on.

Tuesday is the high candlestick that reversed intraday, thus the black body. That top-tick in price is 4169. Since price made this higher high at 4169, you can look at the chart indicators to assess potential negative divergence to figure out when the top is in. That top tick in price corresponds to the red and green lines for the indicators but one day back from the thin black vertical line.

Thus, as price made the high, the RSI was neggie d (sloping down although it is sideways), ditto the histogram and stochastics. In addition, the stochastics are overbot agreeable to a pullback. The RSI is not overbot. So the neggie d conspires with the universal neggie d on the 2-hour chart to create the sogginess in the US stock market in the back half of last week.

Note that when price top-ticked, the MACD is still moving higher ditto the money flow. Both still have some upside fuel in the tank. The day after the top, price comes up to suggest a matching high but just does not have the oomph or gravitas to reach the 4163-4169 again. If you do say that price has made a matching high again, and it is close enough for government work, follow the thin black line down and you see that the indicators are all neggie d except for the MACD line.

Since the MACD line still has some fuel vapor in the tank to help price move higher again, even on the day after the actual peak in price, it is a moot point to be concerned if the day after's price is a matching high or not. What does all this mumbo jumbo mean? It means that you are working in a lumberyard instead of an advanced physics laboratory. It means that price may want to come up one more time for a look at 4163-4169. Universal negative divergence is not yet in place in the daily time frame.

The blue circle shows a potential Tweezer Bottom pattern that should excite the bulls and help price nudge higher to tease last week's top again at 4163-4169. The higher MACD wants another price high and when the SPX comes back up, the MACD will then likely go neggie d to call the top in the daily timeframe.

The RSI has to be watched, however, since waiting for the indicators to all line-up is sometimes like herding kittens. The RSI will need to stay neggie d. If it ventures higher to touch the overbot territory, it will add a few days of life to the topping process.

The SPX violated the upper standard deviation line so the middle band, which is also the 20-day MA at 4092, is in play as well as the lower band at 3974 moving higher. The SPX made it down to 4113 last week only 21 points from the middle band. Thus, price may sneak lower to touch the middle band then run higher again on the remaining MACD fuel, or simply rally as the week begins and then roll over as the days move forward down to the middle band and lower. Any pullback will have the flat 50-day MA at 4034 in its sights.

The sideways stuff continues but she is close to topping-out in the daily time frame which will kick-in the negativity and allow the put/call ratios to spike higher filling minds with fear and panic. The Keybot the Quant robot is short right now and tracking chips and banks with interest so these two parameters are controlling the show. 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 4/26/23: SPX LOD 4049.