The SPX, S&P 500, the United States Stock Market, prints the highest number ever in history at 5670.81 today, 9/17/24, before retreating at the end of the session and ending at 5634.58 unable to print a new all-time closing high. The SPX takes-out the all-time high at 5669.67 on 7/16/24. It is remarkable to be in 2024 and the stock market is still printing all-time record highs. What a pile of phony stinkin' sh*t it is.
The charts are ugly. Coyote ugly. Does anyone remember that old joke? There are 3 levels of ugly. First, when your partner is ugly, you put a bag over her head when having sex. A second level of ugly is when you also wear a bag over your head for fear that her bag may fall off. And the third level is coyote ugly. That is when you gnaw and chew-off your arm in the morning so you can get out of bed and sneak away out the back door before she wakes up.
Anyhoo, the charts are topped-out in both the daily and weekly time frames but it does not matter since Candyman Powell is ready to dish out the easy-money drugs. Sammy was the only true Candy Man. If Powell pumps the stock market again, like the stick-save about a week or so ago, the charts would then price-in the latest money pump and set up negatively again in short order. The upper standard deviation lines would likely be hit if stocks rally after the Powell parade tomorrow at 5700-5730 which would likely set up for the top instead of right now.
But, let's say the Fed goes with 25 bips. It will be viewed as stingy. Daddy Warbucks has more phony dough than that. Keep in mind that if the news is disappointing, it will be a double-whammy of downside because the Fed news and the negative divergence will band together dropping stocks like rocks.
The daily chart clearly shows the triple top in play. Most traders say, "Triple-tops do not exist." This is because price typically keeps on heading higher negating the third top. The truth is that about half the time the triple-tops hold and half the time they do not. The triple-top will be one of the side drama's playing out tomorrow along with potential new all-time record highs.
It is comical that the two charts are so similar technical-wise that they can be described and discussed the same. The red lines show price making a higher high, an all-time record high at 5671, so the chart indicators can be assessed for potential negative divergence to see if a top can be called in either the daily or weekly time frames or maybe both.
As seen on both charts, the indicators are all neggie d (sloping down as price slopes up; the indicators are negatively diverging away from price; in other words, price is out of gas and there are no more fumes to take price higher). It is a top in both time frames. The stochastics are overbot agreeable to a pullback in both time frames. The SPX is extended above the moving average ribbon desperately needing a mean reversion lower.
The ADX pink box on the daily chart shows the strong trend higher in the stock market ended mid-August and the 17 number indicates that there is no longer a strong trend higher in place for the last month. The ADX on the weekly shows that the strong trend higher for stocks in the weekly time frame also ended in mid-August. She's cooked. If long the stock market, all your hopes and dreams are resting on the thin shoulders of Chairman Powell tomorrow. The charts want a multi-week down move to begin with the stock market. Will Powell provide the stick-save again? His wealthy masters are depending on him.
The Aroon's are a sight to behold. The red line is down in the cellar and the green line is in the stratosphere at 100% maximum. This tells you that 100% of the stock market bulls, in both the daily and weekly time frames, believe that stocks will go up forever and make new highs forever. Comically, it also tells you that 100% of the bears on the daily chart, and about 90% of the bears on the weekly chart, also believe that stocks will go up forever. It is off-the-charts euphoric bullishness in play and rampant stock market complacency (put/calls are low, too). Everyone is having fun at Partytown. All market participants believe stocks will go up forever and never retreat. Nothing's Gonna Stop Us Now. Gracie and Mickey.
Powell was not open to a 50-bip cut at the end of the last press conference. He may want to go slow with a 25-bip cut which will be the likely policy mistake. The story forward may be a 25-bip cut and stocks collapse. Powell will likely not lose sleep over stocks dropping since he knows the Fed, leader of the crony capitalism filth, created the huge stock gains for the wealthy class for the last 15 years while common Americans are shafted. The Fed likely wants to position itself going forward to not take the blame, or at least reduce blame, as the stock market prints an epic top and drops like a stone over the coming weeks and months and next couple years.
Of course, the 25-bip will be a policy error. The next FOMC meeting is not until after the election during the first week of November. If the data falls off a cliff starting after tomorrow, things can turn into a real mess real fast. It is fun, and fascinating, watching America's crony capitalism system in its last throes. Very few of you reading this understand what is going on in global markets and economies. 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 Wednesday Afternoon, 9/18/24, at 4:55 PM EST: Powell surprises announcing a 50-bip rate cut. Fed futures steadily increased leading into the announcement displaying a 65% chance of a 50-bip cut and it occurs. The major banks all called for 25 bips except JPM that predicted 50. Call it the 'Powell insurance policy'. Fed officials thought of the next meeting way out in November, after the election, and we are only now in mid-September, and all the potential bad things that can happen. As Keystone's Unemployment Rate Indicator shows, the rate needs to drop to 3.8% immediately from the current 4.2% and that is not going to happen; the labor recession will continue and the FOMC has lots of models they run probably showing similar outcomes. Stocks popped on the dovish 50-bip cut with promises of more cuts for as far as the eye can see. The wealthy, with large stock portfolios, lit cigars to celebrate dabbing the ashes onto the masses foreheads. But alas, the stock market reversed and ended down on the session. The intraday reversal on the Dow was almost 500 points. Easy come, easy go. Powell goes with 50 bips to provide insurance against the outcome above where a 25-bip cut may lead to a policy error. Also, when the unemployment rate begins moving higher, it moves higher fast, so higher cuts may be needed. The retrumplican tribe (King Donnie) will accuse the democrat tribe of goosing markets with easy money rate cuts to swing the presidential election in Harris's favor. Isn't the crony capitalism political baby games sickening? A policy mistake can still be in play if data fell off a cliff; people would then be clamoring for 75 bips in November. The Fed says their mandate is equally balanced between inflation and labor. Actually, labor is weakening and inflation is flatlining, not falling. The risk of the 50-bip cut may be reigniting the inflation problem, however, if the data begins to fall apart, inflation will drop. After the Powell drama, and no great impact on stocks, the neggie d explained above took over and stocks started receiving the negative divergence spankdowns in both the daily and weekly time frames. Lots more downside would be expected; the weekly chart wants to see a multi-week down move for the stock market. The BOJ will likely hike this week and that may create stock market mayhem in the US. The SPX prints a new all-time record high today, 9/18/24, at 5689.75, call it 5690, the highest number in history, and then falls on its sword to end the session at 5618. The triple-top pattern remains in play so several more days will be needed to determine if triple-tops exist, or not. Everyone is addicted to the Fed's easy money heroin but heroin is so passe. Jane Says she'll kick the habit tomorrow, tomorrow, but happy smiles on Perry's gaunt face, ends in the Jane's Addiction band fight, and the end of the tour. Too many drugs, like the Fed's easy money heroin, destroys lives.
Note Added Thursday Morning, 9/19/24, at 4:54 AM EST: The S&P futures jump over +70 points higher overnight. The reaction to the dovish 50-bip Fed move was delayed; typically, the stock market rallies directly after the easy money announcements. Global traders stopped to think, and realize the Fed will always be dovish to always protect the wealthy in the crony capitalism system, so the 50-bip cut should send stocks into the stratosphere. Booiiinng, up she goes, S&P futures now up +77 ready for a Thursday orgy at Wall and Broad. Markets will likely be choppy a few days sorting out the Powell drama but those sick charts above will not change. The charts will take a day or few to factor in the Powell Pump and another top will be expected to set-up in short order, despite the Fed constantly flapping dovish wings. You do not have to guess. Simply make sure the neggie d is in place for all indicators in that time frame to call the top. Powell is the savior of the stock market over the last 3 months providing the dovish stick-saves at the most opportunistic times; the chart technicians in the basement of the Eccles Building provide guidance.
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