Honey, I'm home. The uber low CPC put/call ratio verifies the out of control bullishness, stock market optimism, blind euphoria, and complete complacency. In addition, the buy the dip crowd cannot help themselves buying anything with a heartbeat. The bears have given-up and joined the bulls and the bulls are buying and selling to other bulls that then buy the stocks back. It is hilarious. It is a beautiful set-up and there will be a lot of pain ahead.
Since the complacency has been in play a couple weeks, you know a top is at hand. To call the top, you need to see negative divergence; this has been the ongoing exercise the last couple posts.
Everything is proceeding as expected. Note that price has now come up for the higher high as compared to mid-May. If bearish the stock market, you should be happy seeing that. Since price makes a matching or higher high, the chart indicators can be assessed for neggie d and viola, all metrics are in neggie d in both the 2-hour and daily time frames. She is topped-out. You can call the top due to neggie d.
The only thing that can save it is King Donnie overnight. He watches the markets so he likely has a few key technicians that are hidden in a backroom, or maybe he uses the same chart technicians chained to desks in the basement of the Eccles Building. Those chartists are whispering in his orange ear that the stock market is topping-out right now. Donnie may bloviate some made-up good news to stick-save the stock market overnight. If not, the expectation is for stocks to sell-off.
It is interesting that price did not technically touch the middle band in recent price behavior, that is also the 20-day MA, so 5867 is on the table. Remember, the SPX is on an island since the gap-up above the 200-day MA occurred. Thus, on the way down, price may stop at the shoreline at 5800-ish, and then flush down through the gap in a heartbeat to 5700-ish which would be an island reversal pattern. Otherwise, price may simply trend lower and in time simply fill the gap as it trails lower.
Note the tight band squeeze on the 2-hour in early June that shot price skyward. Tight bands tell you a big move is at hand but do not predict direction.
Okay, so now you can call the top. You knew what to look for so you are prepared and were ditching longs today and putting on shorts. You were not? Well, then you can expect Keystone to hand your head over to you on a platter after he takes your shares going forward. People will regret it for Feelin' Groovy. The corrupt Wall Street analysts are raising SPX forecasts to over 6K again; they move the way the wind blows.
What is the next question all of you have? Well, maybe only a couple of you have since most people are stupid nowadays. Yes, since you know stocks are toast in the hourly and daily time frames going forward, how about the weekly time frame? Remember, trading is like playing multi-dimensional chess only time is the dimensions not space.
If you bring up the SPX weekly chart, of course there is the higher high, and remember, the candlestick will change since there are still 2 days remaining in the week. The high price, however, will remain no matter what. The RSI is flat over the last three pertinent weeks so that is neggie d. The MACD, stochastics and money flow all head higher wanting higher highs in price. The stochastics are in overbot territory so pretty much playing out.
The flat, neggie d, RSI on the weekly will conspire with the universal neggie d in the hourly and daily time frames to help beat price down in the short and near term. The weekly chart appears to want another 1 to 3 weeks to top-out but again, the week is not over. If she drops as projected, a lot of damage can occur tomorrow and Friday and the chart may display more negativity. Let the weekly chart play out this week since the candlestick will be finalized and then on Monday a new candle will start for the new week and that depiction will tell more about the weekly time frame going forward.
Will King Donnie bloviate this evening or through the night to save the stock market from its top right now and projection to selloff going forward? Will Donnie save the day for his wealthy friends or is the orange head as clueless as it looks? Also, it works in reverse. If bad news occurs overnight, it will be a catalyst that really gets the downside flushing quickly lower. Maybe a Black Thursday on tap? Plan accordingly. Traders are singing that It's the Same OId Song a la The Four Tops until they all start running for the exits at the same time in a full panic. The Four Tops show the unbridled joy and happiness of singing and dancing. 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, 6/5/25, at 4:37 AM EST: Hey, what is going on? Futures are going the wrong way; it is more Upside as Southern Avenue grooves. S&P futures are up +14 with the VIX down to 17.46 and copper buoyant up +0.7%. The ECB rate decision is on tap this morning and the US Monthly Jobs Report is tomorrow morning. The focus is on the unemployment rate because if it takes a move higher it will put rate cuts on the table.
Note Added Thursday Evening, 6/5/25, at 6:40 PM EST: Stocks begin receiving the neggie d spankdown as the Thursday session started, but happy talk occurs after a phone call between King Donnie and Dictator Xi. Stocks rally on the news and also likely giving the benny of the doubt to the bulls ahead of the US Monthly Jobs Report only 14 hours away. Benny Hill. Then comes the feud between Musk and Trump; the orange head versus the space cadet. They exchange baby talk on social internet. Meow, meow. It is fun to watch; crony capitalism run amuck. Stocks reverse course and selloff mainly due to a -20% collapse in TSLA stock so the neggie d spankdown day one is complete. The jobs circus may throw a curveball but even if there is a big rally, the expectation would be for stocks to set up with a top again in a few days. The headline jobs number is voodoo math. Instead, pay attention to the unemployment rate now at 4.2% for a couple months. Chairman Powell hints that a 4.4% unemployment rate would put rate cuts firmly on the table. Keystone has explained how the US has been in a labor recession for the last 1-1/2 years. Thus, if the unemployment rate comes in at 4.0% which is very unlikely, the US labor recession will be over and it is a great and healthy sign for the economy. If the rate is 4.1% or remains at 4.2%, status quo, stocks may be soggy since rate cuts may be a few months off still yet. If the rate bumps higher to 4.3% or 4.4% or higher, the US overall recession is at the doorstep or already started. Stocks, however, may rally since rate cuts will be coming faster than expected. Such is America's filthy corrupt crony capitalism system. The neggie d spankdown should continue.
Note Added Friday Morning, 6/6/25, D-Day, at 5:31 AM EST: 81 years ago, the US and Allied forces launch the amphibious assault on Normandy to save the Free World. Star Spangled Banner. In 2025, King Donnie is incompetent at stopping the Ukraine War. Trump promised during the campaign to end the conflict 24 hours. It was an asinine lie only spouted to get votes. Donnie is the modern-day Neville Chamberlain bringing World War III closer due to his Putin butt-kissing. S&P futures rise +26 with the jobs report less than 3 hours away. VIX 18.21. 10-year yield 4.38%. Copper -1.4% slipping away.
Note Added Saturday, 6/7/25, at 7:01 AM EST: The bulls win after the jobs report. The unemployment rate, drum roll please, stayed the same at 4.2% for three months running. It is actually up from 4.19%, that was rounded up to 4.2%, to 4.22%, that was rounded down to 4.2%. If it was only 0.03 percentage points higher it would have been a 4.3% unemployment rate but who's counting. Wages jump which immediately waves the inflation flag. Inflation cannot exist without wage inflation and higher numbers on this front says stagflation. Yields rise after the jobs report reflecting inflation concerns. There is not an increase in need for faster rate cuts but stocks rally anyway. Drilling down, the bulk of the jobs were created in healthcare and leisure and hospitality. Comically, the 300 million Americans that are struggling to get by each week have made themselves sick with stress needing medical care while the 30 million greedy bastards that screwed everyone else over the last 5 decades continue spending and traveling needing peons to clean their bedsheets and toilets, cook their meals, and carry their bags. Isn't America great? Land of the have's and have-not's. Traders see a weaker jobs report under the surface that leads to the bump higher in stocks and it was likely sustained by news on trade that US officials will begin more discussions with China on Monday (this was a lie because on Friday night it is already pushed back to sometime next week; later, delegations from the US and China are boarding airplanes to fly to London to meet on Monday; both sides must be in a panic at what they see coming). Bring up the SPX 2-hour and daily charts and you see full negative divergence remaining across all indicators. Black Monday?
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