SPX S&P 500 Daily and Weekly Charts

Stocks are trading soft over the last 3 weeks as the 3 black crows on the weekly chart illustrate but remember, don't panic! Don't panic! Don't panic!

Looking at the SPX daily chart, the red lines show the rising wedge pattern, overbot RSI, stochastics and money flow, and most importantly, negative divergence, along with the upper band violation and over extension of price above the moving average ribbon, conspiring to slap price lower in the daily time frame; an easy top call.

Stocks rallied since the banking crisis in March due to four main themes. First, the AI orgy rally. Tech stocks are bid higher as well as any stock that mentions AI. Joe Sixpack chases the stocks higher as well as foreigners. Second, lots of Fed monetary stimulus and Congressional fiscal stimulus remains in the pipeline and fuels the spending by the upper middle class and privileged elite, the have's, that keep the economy afloat (but they will not spend forever). Third, the ongoing inflation data and Fed rate drama sends stocks to and fro mainly higher in recent weeks.

Fourth, and last, is a reason that people do not comment on but it is something very special this time around, is foreign investment. Foreigners have money to burn, the corrupt Saudi's bought-out the PGA for gosh sakes, and that money is buying US stocks and real estate. The home builder stocks are at record highs, despite the ongoing housing recession, because foreign buyers in white robes and other garb are laying $300K, $500K and more on the table telling the builder to construct a McMansion with granite countertops. Crazy times.

Well, what now? Price drops and prints lower lows and lower highs so the indicators can be assessed to see if positive divergence is forming to call the bottom in the daily time frame. Price stalled at the price support at 4400 to make a bounce or die decision. The red lines for the RSI, MACD and histogram (weal and bleak) want to see lower lows in price after any bounce occurs in the daily time frame. The green lines for stochastics and money flow (long and strong), and the oversold stoch's, want price to bounce right now in the daily time frame.

Thus, the SPX will likely bounce now in the daily time frame for a day or two but will then roll over lower again for another low to satisfy the weak and bleak indicators. The RSI and stochastics are below 50% in bear territory. The histogram is flattish so that should turn possie d easily as long as highly negative news does not hit the wires.

The ADX on the daily chart shows that the trend higher in stocks was a strong trend in June, July and early this month, but that is over. The upside rally in stocks is no longer a strong trend higher. The red negative Aroon cross occurs forecasting more negativity ahead for stocks. Comically, the red lines shows the bears went from being totally rejected a couple days ago, with 100% of the bears believing that stocks would go up, to now all the bears believing stocks will go down; that's a fickle bunch.

The 100-day MA at 4289 and rising may be a magnet because price tends to seek this moving average during a selloff. The 100 has not been touched in a few months so it is overdue. The lower band is violated so the middle band, that is also the 20-day MA at 4514 and dropping, is on the table going forward.

The SPX may eventually run down to the 4300-4350 area before the daily chart sets up with possie d for an extended rally in the daily time frame to begin; all you have to do is watch the chart. The 50-day MA at 4449 will need a back kiss and bounce or die decision probably in the coming days which means there is probably more choppy slop ahead.

Keystone's 80/20 Rule says 2's lead to 8's on the way down so the breach of 4420 opens the door to 4380. A drop to 4402 opens the door to 4398. If price ventures down to 4320-ish that will be a major test to see if 4280 would be on the table.

The SPX weekly chart also topped out with neggie d as previously described. For the matching and higher high in SPX, follow the thin black line downward to see what the indicators are doing. You see that all were weak and bleak, topped-out and heading lower; negatively diverged against the rising price. Thus, you can call the top due to the neggie d and you were correct.

The money flow is cheesy remaining flat but that is considered neggie d. The dip-buyers are buying what the television pundits are selling and champing at the bit to buy the dips. The dips are buying the dips. The indicators remain weak and bleak so lower lows in the SPX price is expected going forward on the weekly basis.

Price violated the upper standard deviation band so the middle band, which is also the 20-wk MA at 4318, is on the table and also the lower band rising sharply from 4009. There is a confluence forming at that 4318-4340 area with the daily and weekly charts so that may be the logical place where price will try to establish a bottom in the daily time frame.

The ADX is on the verge of declaring the multi-week uptrend a strong trend higher but alas, the ADX flattens and will likely roll over and die. The stock market rally over the last few months may never be called a strong trend on the weekly basis.

Despite the 3-week pullback, comically, the Aroon shows that nearly 100% of the bulls remain uber bullish and nearly 100% of the bears remain bullish. Thus, after a couple-three week selloff for stocks, it has not even begun to dent the rampant market complacency and fearlessness. Traders are ready to buy any dip. This behavior indicates that the downside likely has a long way down to go as the multi-week selloff plays out and the dip-buyers are smacked and discouraged.

Watch the RSI and stochastics on the weekly chart to see if 50% fails sending the indicators into bear territory and more negativity ahead on the weekly basis. Watch that sneaky sideways money flow, that is flatter than a newlywed's souffle, as Art Cashin would say, that is now at a 2-month low.

Back to the near term, there is lots of drama ahead in the news department. King Donnie Trump, the orange-headed bloviating carnival clown, must decide if he is attending the debate on 8/23/23 by Sunday evening, 8/20/23. The BRICS garbage with instituting a new currency basket to take on the US dollar's global reserve status hits the fan on Tuesday, 8/22/23. That currency cabal wants to back their new offering with gold but it will not work because the countries are not stable. The US has troubles but in the laundry basket of dirty and corrupt unstable countries, that is all of them on Earth, America is the least dirty shirt although it is soiled and stained badly.

The first republican presidential debate takes place Wednesday, 8/23/23, by Fox News, so markets may react to that circus. If Donnie does not show up, he may hold a competing event which will make everything more of a 3-ring circus with the showman in the center ring. King Donnie must turn himself in for arrest in the Georgia post-election scandal by Friday 8/25/23. Also, the Fed and the world's bankers and economists, meet late next week in Jackson Hole, Wyoming, and Chairman Powell speaks on Friday morning. It's fascinating watching the crony capitalism system crumble. They're all crooks. Sleepy Joe Biden, the brain-dead Alzheimer's patient, is more of a thief and corrupt individual than Trump. That's funny.

The Federal Reserve has been raising rates for 17 months (the fastest rate rise period in 40 years) and 18 months is the magic number for recessions. Everyone sings from the same hymn sheet that a recession will not occur and is nowhere in sight when in reality, it likely has just started. The US has been in a housing recession since Christmas and a manufacturing recession is ongoing. The overall US recession that takes everything down is nipping at the door. People will be surprised at how fast the economic data will likely reverse.

Note how stocks are weak into and through the peak of the new moon. Stocks should bounce for a day or so due to the possie d on the daily, but then roll over again due to the neggie d on the daily and the weak and bleak weekly chart. After one or two jog moves (down-up) on the daily chart, price should place the bottom (next week) on the daily basis. You can call the bottom when you see all the indicators go possie d like the stochastics and money flow. This will create a multi-day rally higher for stocks say for a week or so, but then the sickness of the weekly chart will kick back into gear and send stocks way lower on the weekly basis. Let it Drop as Sports Team sings. 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 Saturday, 8/19/23: The SPX loses -2.1% this week ending at 4370 with a low on the week at 4335 so this level is key going forward. The 20-wk MA support is at 4316. The 100-day MA is 4297. It appears that "you have" markets "you hate." Du Hast. King Donnie Trump's team says the orange head will not participate in the Wednesday debate instead deciding to sit down with an interview with Tucker Carlson (that was canned from Fox). Donnie is a showman, and the deadline for deciding is Sunday evening, 48 hours before Wednesday, so it would not be surprising if late Sunday (tomorrow) the bloviating orange head decides to attend the debate. Didn't he already do an interview with Tucker? Trump will be spewing the same old grievances and his fantasy that he won the 2020 presidential election. Who listens to that dribble anymore? The dufus should have congratulated Biden and moved on after the 2020 election; the Capitol Hill riot would have never occurred. Trump would be heralded now into the 2024 election but instead he chose to be a whining cry-baby sore loser creating sickening non-stop daily reality television drama. King Cry Baby. Tucker tries to maintain his relevancy. He will find out what Bill O'Reilly and others have found out. Once you lose the media's bully pulpit, either a primetime television show, or broadcasting across a 50,000-watt blowtorch radio channel, it's over. You get in the back of the line and keep telling folks, "I have a podcast." Fame, notoriety, even riches, can be fleeting.