Did all of you do your homework as instructed in the last SPX monthly chart? Oh my. It looks like a bunch of deadbeats. It would be worthwhile to go back and read that post to refresh your memory as to what was going on. Oh, there are a couple of you that were watching closely. Yes, they see it. The United States stock market has placed a significant long-term top with many months or years of downside ahead. The MACD told you so.
Remember, as of a month ago, the SPX monthly chart was neggie d across all indicators except for the MACD line in nosebleed territory. The homework assignment was to watch the MACD to see if it goes neggie d and, if you pull out a magnifying glass, you can see the MACD roll over (flat) as price continued to make matching or higher highs, in fact, an all time record high at 6147 and all-time record closing high at 6144 on 2/19/25.
The multi-year party is over, turn out the lights. Willie, give us a few bars. It is time to pay for your sins at that party. It is time for short-seller Carrie to mentally lock the doors and deliver the comeuppance to the greedy longs that cannot escape. Folks, this chart is important because it is long-term, multi-months if not multi-year. The stock market is toast long-term. It is a piece of sh*t.
The red lines display the neggie d which means there is no more fuel in the tanks, not even fumes, to take stocks higher. The neggie d spankdown begins over the last couple weeks but this is nothing in the grand scheme long-term. Anyone in the stock market should exit their longs and bring on some shorts and adopt the philosophy of shorting the rallies. The long side has no future for the next couple years.
If you only want to be long the market and do not want to play the short side, fine, exit your positions and let that cash sit there for the next year or two and do nothing. You will be glad you did. You can buy the SPX when it is perhaps down to 2400-3500 next year (2026).
Price has violated the upper band so a move back to the middle band at 5281 and lower band at 4127, both rising sharply, are on the table. Price is extended above the moving average ribbon so a mean reversion lower is desperately needed.
The ADX is not calling out any strong trend. The last strong trend (pink box) was in 2018 and early 2019 when stocks were rallying but that petered out in 2019. The massive move in stocks since then is just a pile of fluff and floating garbage pumped-up by easy money. It will be fun to see price discovery rear its ugly face after many years of Fed money-printing and Congressional largess and everyone finds out what material goods are actually worth including stocks, bonds, real estate, collectables, diamonds, gold, everything. It is going to be quite a sight.
The Aroon is comical. The selling so far is meaningless. The green line shows that nearly all stock market bulls remain almost 100% bullish. Tell me something I don't know, Captain Obvious. The Aroon red line shows that nearly 100% of the stock market bears are bullish for stocks. Pause for laughter. The complacency remains off the charts. People believe that stocks will go up forever no matter what happens. A dirty nuke can detonate and everyone would be mortgaging their house to buy the stock market. It is funny. It is more proof of the bubblicious top. Don needs to sing, "Tiny Bubbles." Come on, folks, everyone sing along.
The blue circles show distribution taking place. That is the smart money selling to the dumb money, which is many of you reading this. Some of the big investment houses trimmed stocks in late 2021 ahead of the 2022 swoon but it has been pretty tame into 2024 (last year). At the end of last year and this year, the smart money is throwing stocks overboard. That is why the talking head analysts appear on business television daily telling everyone to "buy, buy, buy!!" They need the bagholding sucka's to take the shares and hold the bag at the top.
Sadly, or humorously, a lot of you are already holding that bag. Is it stinking? Pause for laughter. Stocks have significant long-term downside ahead. There will be fits and starts but the downward bias will likely continue for most of this year if not well into 2026. Plan accordingly. Are you going to be one of the bag holding sucka's?
If you are, say, under 40 years old, that means you are generally stupid socially and few of you have street smarts, so what you need to think about is making sure you are not in the stock market for the next year or two. Instead, get yourself out of debt except for your mortgage; you should have no other debt. You have your whole life to buy stocks and do not think about doing that for a couple years, otherwise, you will lose your money going forward. Something wicked this way comes, for the next couple years. Jenny is about to get wicked.
Scroll back to previous charts. Keystone shows you the SPX daily and weekly charts so a relief rally is due but the weekly chart remains weak and bleak so probably a few days or week or so of upside and then the downside fun begins again. 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.
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