SPX S&P 500 Daily Chart; Fibonacci Retracements

The upside rally started in April when the recession call for this year was abandoned and the AI hype was in its glory. Comically, companies have their bright new shiny NVDA chips sitting in the IT room but everyone is looking at each other wondering what to do with them. Anyhoo, stocks rally in May, June and July into the all-time record high in history for the SPX (S&P 500; the US stock market) at 5670 (5669.666) on 7/16/24 three weeks ago.

Thus, from 4967 to 5670 is 703 points. The Fib retracements are 38%, 50% and 62%; the magical percentages found throughout nature. 703 times 0.38 is 267 points so subtracting that from the 5670 top is 5403 close enough for gov't work to the 5396 on the chart; call it 5400. Price fell through the 38% Fib, then through the 50% Fib at 5313, then dropped down to the 62% Fib retracement at 5230 (blue circle). Price fell through to the 5119 low but that was only an intraday event.

Note that the following day, off the bottom, the SPX closed smack-dab at the 62% Fib deciding to bounce, or die. It bounced after a stutter-step lower and the relief rally was underway. 

Now it is time to look at the Fibonacci retracements for the relief rally after the crash from 7/16/24 to 8/5/24. The first 38% Fib retracement is ........ well look at that ....... whoa doggie. ....... wait for it....... wait a bit longer for it ....... smack-dab on top of the 38% Fib retracement at 5344-5346. The SPX is deciding to bounce or die right now and the inflation data dropping in a couple hours will help to push it one way or the other.

If the SPX bounces from the 38% Fib and decides to continue the rally, the 50% Fib at 5407 is the next upside target. Of course the bears want the 38% Fib resistance to hold right now and for price to receive a smack down towards the lows again. The data at 8:30 AM EST will determine the Winners and Losers. Life's a gamble, and you might lose. 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 Thursday Morning, 8/15/24, at 6:22 AM EST: The SPX pops higher on the PPI data on Tuesday morning and the CPI data yesterday showing that inflation continues to gradually subside. Interestingly, services inflation (inflation is made up of goods inflation, that is raw materials orientated, and services inflation, that is customer experience orientated) shows a slump for the first time in many months. America's upper middle class and elite privileged are keeping the economy afloat as they experience the wealth effect from big stock gains for the last 15 years courtesy of the Federal Reserve's money printing; it is called filthy crony capitalism. The rich are the ones that boosted services inflation for the last couple years taking luxurious trips, dining out, buying new cars and diamond rings, and living the dream. If services inflation is now sliding away, that means the wealthy are pulling back on spending; that will sink the economy. After all, how many new $3,000 refrigerators, and fancy washers and dryers, and expensive home makeovers do you need? Even traveling to exotic locations gets old since lots of time is spent sitting in smelly noisy airports. Anyhoo, the SPX takes out the 38% Fib and runs toward the 50% Fib at 5406 taking it out like it was not even there. The 62% Fib is at 5467 and price almost tagged it at with a HOD yesterday at 5463. Price hesitates at the 50-day MA at 5455, sitting exactly at this critical S/R (support/resistance) level to start the Thursday session. Walmart earnings are on tap in a half hour and a slew of economic data also hits the tape. Jobless Claims are uber important since the employment market now has the Fed concerned (more than their other mandate that is price stability (inflation)). If the data is joyous, price will bounce off the 50 and the big test will be at the 62% Fib at 5467-ish. Lots more upside is ahead if this is taken out to the upside. Bears will be hoping for weak data this morning, and for the SPX to collapse from the 50-day, having performed a successful back kiss, and this would light the way for a lot of downside with stocks going forward. Watch the dollar/yen, sticky at 127.25. It is simple. If the dollar/yen pair moves higher (weaker yen) stocks go to the moon. If dollar/yen falls under 127 headed towards 126 and lower (stronger yen), stocks will collapse. In a few minutes, we find out if WMT's yearnings are Respectable.

Note Added Friday Morning, 8/16/24, at 7:50 AM EST: Walmart is more than respectable promising big sales in Q4. Retails Sales are strong creating stock market joy. Interestingly, the boost in sales has a lot to do with higher prices (inflation); unit sales actually decrease; in addition, the top 20% rich folks in America are accounting for nearly 50% of retail sales. The Federal Reserve has given the Creature of Jekyll Island life; it is an economic Frankenstein. Crony capitalism is alive! It's alive!  The dollar/yen leaps above 149 sending US stocks higher and higher. Stocks are singing songs and carryin' on all night long. Family Tradition.

Note Added Saturday, 8/17/24: The SPX stages a historic comeback rally catapulting from 5119 to 5562 in only 10 trading days. That is ridiculous. A 443-point jump, or +9%. The benchmark S&P 500 index is rising 44 points per day nearly +1% per day. Come on, now. Come on, now. The roulette wheels are spinning 24/7 at the corrupt Wall Street casino. At the 5119 low 2 weeks ago, the chart indicators remained weak and bleak wanting more downside but the Fed promises a new easy money party, with rate cuts starting on 9/18/24, launching stocks higher. Stocks are trading off every little data point and recent numbers favor bulls. Volatility dropped on Friday which created further upside with stocks. The SPX daily chart shows long and strong indicators, sans money flow that is flat, which is neggie d, so 2 to 4 days are likely needed for the SPX to top out in the daily time frame again. You will be able to call the top when you see all the indicators in negative divergence. As fate would have it, this likely places markets at Friday morning when Pope Powell will be pontificating from his piehole at Jackson Hole. The dollar/yen moves higher (weaker yen) so the carry trade is back on and US stocks float higher. SPX 5565-5566 is strong price resistance from July so perhaps that is where price stalls ahead of Prophet Powell that will bring the tablets down from On High, sidestepping the moose sh*t, to enlighten the world on Friday morning.