The top watch continues. The SPX is Jimmy Stewart in the famous swimming pool scene totally oblivious of what is occurring around him. Do not be a Woolly Bully as Sam the Sham & The Pharaohs said. Watch it now watch it now! Don't take no chance. Woolly Bully was a popular tune for the biker gangs in the 60's and 70's.
Recapping the stock market madness over the last month, as a major top forms, Keystone talked about the low put/call ratios that have still not been resolved indicating euphoric bullishness that must be punished. As previously explained, the signal used to be more reliable with tops occurring in a few days hence but over the last couple decades, it takes longer sometimes 2 to 3 weeks, and that occurs, a month or so actually, and over 200 points up on the SPX (that was mentioned as a possibility and occurs due to the King Donnie tariff hype and Pope Powell flapping his dovish wings every ten minutes).
The maroon lines show that previous top with universal negative divergence. She started dropping but was stick-saved by the orange head and the Fed and the 20-day MA support. So up she goes but the red lines show neggie d has not gone away. The only uncooperative metric is the RSI that still has some gas in the tank making a new high (long and strong) as price printed the all-time record high at 6284.65 and all-time closing high at 6279.35 on Thursday, 7/3/25, just before Independence Day by Martina. Perfection.
Interestingly, Keystone's 80/20 Rule says 8's lead to 2's on the way up and price sneaked above 6280 but no close above. If the SPX closes above 6280 for a couple days, it opens the door to the 6320-6330 target. The neggie d creates sogginess for a couple days but the RSI still has gas in the tank so another matching price high is expected. It would be good for bears to simply see the price print at 6279-6285 again, with the RSI turning neggie d, and that would be the top in the daily time frame, perhaps tomorrow.
The weekly chart remains neggie d but it is trying to use the gusto over the last couple weeks to extend itself for a week or few. As of now, however, it is a weak chart. The SPX monthly chart is toast. It remains in full negative divergence calling out a major multi-month and perhaps multi-year top for stocks. So it is down to the daily chart to likely time the top and it may occur tomorrow. Keep an eye on it.
The black circle shows the death cross and the gold circle shows the golden cross that just occurred and it is also occurring for Scamazon. Remember, when a death cross occurs, stocks usually rally (the opposite of what the dolts on television will tell you) since it took an extended time of weakness to create the death cross and at the least a dead-cat bounce is needed, as the chart above shows. The rally kept on going, however, and did not roll back over to the downside which typically happens (Donnie and Jerome saved the day). Conversely, it took over 3 months of upside to create the golden cross so a pullback should occur now to give price a break.
The ADX is telling a bearish story. The pink box shows the last strong trend in March into April that was the downside selling. This ended and the 3-month rally rules the roost but note that the ADX does not call it a strong trend. All-time highs are printing but the stock market is not considered to be in a strong trend higher. Something is seriously wrong with that picture. Sell Mortimer sell!.
The Aroon is hilarious and tells you the top is at hand. Nearly 100% of the bulls remain bullish for the last couple months and 100% of the bears remain bullish. That is funny stuff. There are zero bears in the stock market. It is bulls selling to other bulls that immediately regret they sold that then buy the shares back but the bull that sold regrets it and so on and so forth as the markets look for the biggest fool. Is it you?
The SPX violated the upper band so the middle band, that is also the 20-day MA at 6097 is on the table and lower band at 5897. The red rising wedge pattern is bearish. The volume candlestick is pitiful for last Thursday when the stock market printed the new all-time record highs. It should have been a big volume day not tiny, even with the holiday. The light blue circles are distribution days, 7 of them over the last month. That is the smart money selling shares to the dumb money. Are you one of the sucka's that bot stock over the last month? You are going to get raped.
The Wall Street thieves are on television all day long pumping and dumping, telling the sucka's to buy, buy, buy, while they are sneaking out the back door. If you are long the market, look in the mirror. Smile, you are a bag-holding sucka. Goldman Sachs jacks up its SPX target by +11%. BAC hikes its SPX target. Blackrock proclaims that there is risk of being too defensive. Pause for laughter. Some idiots are calling for SPX 7K and probably already have an embroidered hat ready to display. A Manulife John Hancock chick says the rally will continue. The list goes on and on. Everybody and his bro are bullish the stock market expecting equities to go up forever as the chart verifies. Everyone is euphorically bullish and complacent so it is time to deliver heads on platters.
If you are a novice trader, get yourself out of the stock market before you get hurt. You are picking up nickels in front of a bulldozer. Keybot the Quant remains bullish but as always, that can change at anytime. Watch the RSI on the daily chart. If price makes the matching or higher high, and the RSI slopes lower, neggie d, you can call the top in the daily time frame and this should also open the door for extended weakness on the weekly and monthly charts. 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 Evening, 7/10/25, at 7:27 PM EST: Ding, ding, ding. The bell rings at the top. Who said it didn't? Time to ring Anita's bell. Ring My Bell. Yesterday, stocks rallied and the SPX moved higher but did not match the previous high. Today was another story. The SPX prints a new all-time record high at 6290.22, but then falls backwards, but still prints an all-time closing high at 6280.46. Therefore, the chart metrics can be assessed for neggie d. The bulls are oiled-up participating in an orgy on the trading floor each day so obscene it would make Caligula blush. Every day is one big party day. The CPC put/call ratio collapses again verifying one month of pure euphoric bullishness, optimism and absolute complacency. If you followed your homework instructions, you see that the SPX prints the higher high, and now the RSI is sloping lower, negatively diverging, joining ALL the other chart indicators. You can call the top on the daily basis. In addition, if you bring up the SPX 2-hour, you can see that it is in universal neggie d as well so for the VST and ST, down is the path forward, and the neggie d spankdown would be expected to begin tomorrow. The only thing that can stop it is happy talk from King Donnie or Pope Powell overnight but that would then only delay the top by a few more days. The timing is interesting. Do you think a Black Friday may be on tap? How about a Black Sabbath and Paranoid.
Note Added Friday Morning, 7/11/25, at 5:36 AM EST: JPM CEO Jamie Dimon proclaims that the stock market is complacent. He must be reading Keystone. King Donnie throws a hissy fit last evening and slams tariffs down on Canada and others. The orange head wants to divert attention away from the Epstein scandal where he is likely muzzling the information on the dead pedophile because he is using it to blackmail influential people. S&P futures slip -36 points so good news did not occur overnight. In fact, the news is negative so it acts as a catalyst and double-whammy to kick-in the negative divergence spankdown in the short-term that should begin now. Today will be interesting but next week is more important to see how the SPX weekly chart develops. Burn to Shine.
Note Added Sunday Evening, 7/13/25, at 8:01 PM EST: S&P futures are soggy as King Donnie spews more tariff rhetoric. The neggie d spankdown should continue this week unless there is happy news that creates a couple days of buoyancy. The 20-day MA support is at 6134 and rising so this would be the first stop and doable during the coming spankdown. The SPX weekly chart is key this week. The weekly chart remains negatively diverged over the last 6 months and over the last year, but there is thrust in the short-term due to the euphoric bullishness and bigtime top occurring. The MACD and money flow on the weekly chart should top out for the short-term which will help the bears. The SPX monthly chart is nasty with universal negative divergence. The stock market is a piece of sh*t folks. The SPX will drop from 200 to 800 points, or more, over the next month. Within days, there will likely be a big nasty down day say 100 to 150 negative SPX points. Are you planning for the trouble especially the long-term sickness with stocks or are you listening to everyone on television telling you to buy, buy, buy? Stocks are going to have a downward bias and leak lower for many months forward, through the end of the year, and likely first half of next year. Can't You See. Maybe some rock flute will help you think.
Note Added Tuesday Morning, 7/15/25, at 5:33 AM EST: The big inflation data day is here. The case can be made that traders have been waiting for these numbers for the last month. Everyone expects an uptick in inflation it is only a matter of how much. If the numbers come in as expected or on the tame side, King Donnie will turn the Powell-badgering up to 11 demanding rate cuts. Spinal Tap. The impact of Trump's Trade and Tariff War should start appearing in the inflation data. Trumpski brags about the money coming in from tariffs but that is your money. Prices remain high especially food and one-third to one-half the cost of the tariffs will be paid by Americans. Services and goods inflation are the key components of the numbers. Services inflation has slumped in recent months, or call it steady, with a slight downward bias. Since services are not doing much, goods inflation, or deflation, will impact the overall inflation numbers going forward. Keystone discussed the Trumpflation a few posts back. After the orange head was elected in November, inflation and prices ran higher into this year as goods inflation ran higher. Then goods inflation dropped and Donnie has been claiming credit for bringing prices down. However, goods have been rising for the last month again so the expectation is for the inflation data to rise going forward and the big impacts with higher inflation occurring as the weeks and months play out ahead. For the gut reaction to the data, if it is at expectations or tame inflation, rate cuts are coming faster and stocks would rally. If the inflation is higher than expected, rate cuts remain on the back burner, and stocks would be soggy disappointed that the free money will not flow. However, technically, the stock market wants to pullback so it is a crap shoot as far as gauging a reaction. Julian Emanuel at Evercore is now using the "complacent" word. Keystone has started a new trend. Car Wheels On A Gravel Road.
Note Added Hump Day Morning, 7/16/25, at 5:52 AM EST: The inflation data comes in a bit hotter than expected as most analysts expected. Buoyancy is in play for inflation going forward. King Donnie lies like Sleepy Joe saying inflation is falling and the orange head continues calling for rate cuts. Trump is doing a good job at screwing up the US and global economies. The initial reaction by stocks was up but as would be expected, stocks ended the day soggy since rate cuts will likely be delayed as inflation rises. The analysts remain super bullish with euphoric optimism. Chris Verrone at Strategas is not worried about any potential pullback since stocks will continue higher and higher. The buy the dip philosophy remains in full swing. These folks need punished for their misplaced optimism. The SPX prints a new all-time high at 6302.04 yesterday but the all-time closing high remains at 6280.46 from 7/10/25. Where's the SPX 6.3K hats? Keybot the Quant remains long through the sleepy summer action and is tracking financials currently. Watch XLF 51.07, the bull/bear line in the sand identified by the quant. If that fails, the stock market trouble will materialize in a meaningful way. XLF is at 51.70 in the pre-market..
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