Are you girding your loins? If long, you should be girding night and day. If you are bullish on the stock market, that means everyone reading this since the only bears remaining are Slim and None and Slim just left town, you need to be very scared.
Comically, or historically if you prefer, the Aroon's on the SPX 2-hour, daily and weekly charts all show 100% of the bulls expecting stocks to go up forever and 100% of the bears expecting stocks to go up forever. If memory serves, that has never happened. The stock market bullishness is off the charts and over the top. Traders and investors are in a euphoric ecstasy for stocks willing to buy any equity with a heartbeat. The Aroon's indicate rampant stock market complacency and fearlessness. The CPCE put/call ratio falls to multi-year lows indicating rampant stock market euphoria, complacency and fearlessness. Sell, Mortimer, Sell!
Last week had Black Monday potential as noted in the last SPX charts. The stock market was topped out and ready to Rock and Roll to the downside a month ago but was stick-saved by the Fed speak and happy inflation and jobs data. Well, that hype is built into the charts now and the SPX is topped out again in the 2-hour, daily and weekly time frames. The stock market is a piece of sh*t ready to receive a negative divergence smackdown. That would be cool to see a Black Monday, or Black Tuesday; you would live stock market history in real-time.
The charts are horrible. As price makes an all-time record high at 5822.12 and all-time closing high at 5815.03, all the chart indicators on all three charts show negative divergence; it is a top. Keystone's 80/20 Rule says 8's lead to 2's on the way up so 5780 opened the door to 5820, which occurs. It is critical for the bears to knock the stock market down from here forward since a sustained price in the 5800-5820 area will open the door to 6200. Many Wall Street analysts have adjusted targets higher to 6K and more as stocks refuse to go down.
The rising wedge patterns are textbook and forecasting a top. The SPX is above the moving average ribbons requiring a mean reversion lower (like July). The pink boxes for the ADX show that the strong trends higher in stocks in the daily and weekly time frames are over. Fini as they say in Fraunce. Stick a fork in it. It's cooked.
The upper bands are violated so the middle bands, that are also the 20 MA's, are downside targets. On the 2-hour, they are 5766 and 5699. On the daily, the downside targets as per the standard deviation bands are 5721 and 5622, and they are 5535 and 5235 on the weekly.
The standard deviation bands on the daily chart are the tightest since June so a sharp strong move is expected over the coming days and weeks. Tight bands do not predict direction but the assumption is clearly down due to the universal neggie d across three time periods.
When Federal Reserve Chairman Powell sings, "the time has come," in Beds Are Burning, he did not mean it was time for an easing path to proceed, he meant it was time for stocks to collapse.
As usual, Keystone is sitting Alone on one side of the boat, strumming his guitar, singing an outlaw love song, the Story of My Life, while everyone buys stocks without a care in the world. They be stupid people. Everyone will come over to this side of the boat once the band begins to play when the neggie d kicks-in. Maybe a Black Monday? Black Tuesday? Bueller? 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.
ATTENTION: A salute to the US Navy on its birthday tomorrow (Sunday). Cher always knew how to entertain the sailors and make sure they knew what they were fighting for. If I Could Turn Back Time. Cher's son, Chaz, is playing guitar; we knew him as Chastity decades ago during the Sonny and Cher Variety Show.
Note Added Sunday Evening, 10/13/24, at 6:34 PM EST: S&P futures are down a handful of points. No biggie. Move along, move along. CNBC commentator Michael Santoli proclaims, "S&P 500 grinds higher to further record highs, finding little to fear in October." Yahoo Finance reporter Josh Schafer talks to Wall Street strategists and says they "believe the bull can keep running wild......the path higher appears to be clear, with earnings growth expected to keep accelerating and the economy on seemingly solid footing as the Federal Reserve cuts interest rates." It sounds like rainbows and puppy dogs every day ahead. BMO's Brian Belski decrees that the SPX will tag 6100 by the end of the year (within 52 trading days; the SPX would need to rally 5.5 points every trading day, with no down days, from now into 2025). Kris Kristofferson croaked a couple of weeks ago on a Sunday. How appropriate considering that Sunday Morning Coming Down was one of the best songs he wrote, that Johnny adopted for his own and made famous. Kris got taken back to the something that he had lost along the way. There's something about a Sunday. You can smell that fried chicken.
Note Added Monday Morning, 10/14/24, at 5:15 AM EST: Happy Columbus Day. The stock market is open but the bond market is closed. S&P futures are up a handful of points. No biggie. Nothing to see here, move along, move along. China decides to go incrementally with the stimulus doing a little, and watching data, then doing a little more, watching data; communist jackasses. Former Fed Chairman Bernanke, the so-called 'student of the Great Depression', learned from his studies that the major mistake after the 1929 stock market crash was not stepping-in and providing stimulus big and fast. That is why Helicopter Ben was dropping piles of cash from the sky in 2009 to save the stock market and protect America's corrupt wealthy class perpetuating the crony capitalism system. It worked. It sinks the US into deeper debt and straddles your kids and grandkids with unmanageable debt but who cares? Live for today. Don't worry about tomorrow. China is making the same mistake the United States made after the 1929 crash that led into the Great Depression, and sick 1930's decade, and then WW II in the early 1940's. Markets were ecstatic last week on China stimulus thinking it was a no-brainer that the PBOC would fire a gargantuan money bazooka showering the entire mainland, as well as the world, with easy money as far as the eye can see, but the communists balk. As world economies struggled in the early 1930's, protectionism took hold and the countries, including the US, slit each other's throat, all riding the same recession/depression bus to Hell until Hitler rose to power in Nazi Germany and WW II started. Oil and copper retreat on the lackluster China stimulus. Invesco's Brian Levitt proclaims, "I think we are in a bull market." For now, all is groovy, 'it's all too beautiful', and it is time for another fun day at Itchykoo Park.
Note Added Monday Evening, 10/14/24, at 7:09 PM EST: What's going on? That is not a Black Monday; it is a mini melt-up Monday. Well, how about a Black Tuesday? Emperor Jensen waved the Blackwell chip in the air again proclaiming limitless demand. The chips sector jumps a couple percent taking stocks higher. Banks are buoyant ahead of GS, C and BAC yearnings in the morning. Traders expect the banks to blow-out earnings like last Friday, especially after the bar was lowered which is the standard fare for the Wall Street game, so investors are tripping over each other to buy stocks at the ask with both fists. The SPX gaps-up this morning and prints a new all-time high at 5871.41 and new all-time closing high at 5859.85. Stocks are on Top of the World. Nothing has changed in the charts; the neggie d remains in play. The RSI on the daily chart creeps higher over the last two weeks so it may try to force price to jog for two days (down tomorrow and then up on hump day for the potential top). VIX remains elevated near 20 at 19.70 so expect big intraday price moves and day to day moves. S&P futures are up +3 as the banks cook the books in the backroom ahead of earnings in the morning. Keybot the Quant remains long and is tracking copper as the most important metric currently impacting stock market direction. If copper futures drop about -1%, the stock market will likely be in trouble so keep a hairy eyeball on the red metal. Copper futures slip negative a few minutes ago.
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