Trading is like playing three-dimensional chess only time is the dimension instead of space. Thus, mathematicians say thus a lot, that is why we are never invited to the fun parties, it is a good time to review the SPX 2-hour, daily, weekly and monthly charts to see what the chessboard looks like. Partying is more fun than chess. Million Miles Away.
Starting with the 2-hour, it topped-out with neggie d on Friday's opening bell. You can see price making a matching or higher high, in fact a new all-time record high at 6481.34 on 8/15/25. The all-time closing high is 6473.92 on 8/14/25. Thus, you can assess the chart indicators and lo and behold, they are all negatively diverged (red lines) so you can call the top, and it occurs. The indicators remain weak and bleak so more downside would be expected in the hourly time frame.
In the daily time frame, look at that rising wedge pattern. it is a thing of beauty. It is also a bearish pattern where price would be expected to collapse from. The neggie d on the daily chart will be glad to get that process started, as long as the daily Donnie hype news and non-stop Fed rate cut talk calms. Note the blue circles for the volume candlesticks. Those are distribution days and there was one more set that almost qualified. That is the smart money selling to the dumb money.
The financial managers parade across television and internet screens telling the bagholding suckers to buy, buy, buy! The Uber driver just took an entire paycheck and went triple-leveraged long the SPX because a guy on tv said so. This stuff never gets old. It is fun to watch the animated human greed. Even if a strategist or analyst, sometimes called an anal cyst, opines about stocks becoming frothy, many are buying equities 10 minutes later. Others are pumping and dumping hoping enough sucka's show up to hold the bag at this historic top.
Rick Rieder of Blackrock joins bulls John Stoltzfus at Oppenheimer (SPX 7100 call) and Mike Wilson at Morgan Stanley (SPX 7200 call) all calling for continued upside in stocks. They are all vying for the Irving Fisher award a la 1929 saying a permanent plateau is in place and stocks will only go up from here. Tom Lee of Fundstrat wants in on the action and is calling for SPX 6600 within the next 10 trading days. Ed Yardeni is bullish proclaiming that the "economy is in good shape" and "we are in a melt-up situation." Yardeni calls for SPX 6600+ and his topside target is 6900-7000.
CNBC commentator Jim Cramer decrees that the stock market is not at a dangerous level of froth. Cramer proclaims, "It's a buyer's paradise. Get used to it because it very well may be here to stay." The stuff is comical. Everyone is trying to out-bull each other as the stock market prints a historic top that may stay in place for several years to come. Scott Chronett at Citi calls for SPX 6600+ in the near term and says the "worst case for tariffs is behind us." SPX 7200 is his bull case going forward. What are these folks smoking? That is some good ganga. It makes you see things that are not there. It will be fun to watch. Keystone against the so-called smart Wall Street minds. Who is correct? What camp are you in? There's a better band at Keystone's camp. Hey Jealousy.
The low CPC and CPCE put/call ratios, that have languished with low readings for a couple months, very atypical behavior, indicate rampant complacency, fearlessness and euphoric bullishness signaling a significant top at hand.
So the VST (very short-term; hours) and ST (short-term; days) charts are cooked, how about the weekly (IT; intermediate term)? The SPX weekly chart clearly shows the massive rally off the April low. The stochastics were not positively diverged at the initial April bottom and wanted price to come down once more in the weekly timeframe, and it did a couple weeks later when the stoch's went possie d so we can call that April bottom an acceptable positive divergence bottom (sometimes news hype will start a recovery rather than possie d).
The neggie d top on the weekly was an easy call. Keystone explained all that in February when calling the top. So what about now? Price is negatively diverged across all indicators. The MACD is neggie d from last December but note how this couple-week thrust on Donnie happy talk and Fed rate-cut hopes is trying to eke out a higher high and extend the rally by another week or two. That remains to be seen since the chart is weak. If there is more Donnie and rate cut hype, price may try to tag the upper band and/or at least try to match the all-time high at 6481 but everything is getting long in the tooth. It is time for stocks to receive their smackdown but keep an eye on the MACD line.
On the SPX monthly chart (LT; long-term), this is a very ugly set-up and should scare the Hell out of you if you like to puff your chest out and say you are a long term investor. You are going to get hammered over the next couple years. It is over for the stock market on the long-term basis (months and the next few years). All the chart indicators are in historic negative divergence as price prints record highs. There is no more gas in the tank to take stocks higher on the monthly basis. Not even anymore fumes.
The last four months of buying shows volume candlesticks well under the three months of selling after the late February high. Price needs to come down to take a look at those levels again. If you look at the 2022 bottom the bears were cheated since a proper positive divergence bottom did not occur. Instead, it was hype and the Fed and government printing money like madmen goosing the economy. There is unfinished business down at 3500 so the SPX would be expected to fall to that level and lower over the coming months and couple years. Are you ready for the fun?
The charts in all the SPX timeframes are sick and want price to start dropping going forward. There will be fits and starts but it is very likely that we are now printing a historic top in the US stock market that will not be seen again for some time. Is everyone ready? Are you following the charts or are you listening to the people above channeling Irving Fisher in 1929 telling you to buy, buy, buy, without a care in the world? Speculators live for these markets. Well, do you feel lucky punk about owning the stock market? Who will laugh last? Funny Way of Laughing. 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 Tuesday Morning, 8/19/25, at 8:04 AM EST: The bulls continue singing from their euphoric and glorious hymn sheets. Cue the organ. Gloria, in excelsis deo. Seema Shah at Principal Asset Mgmt proclaims that the stock market rally will continue into 2026. Shah says stay in AI and tech stocks and do not sell even if they pull back. Steve Chiavarone at Federated Hermes decrees that stock values are justified. It's beautiful. He says it is an early cycle economy and data is accelerating higher. Chiavarone says he is not worried about any bubble in the stock market and will not until the broader market multiple moves a lot higher. Everyone is bullish expecting a far higher stock market telling people to buy the dip even if the market does sell off. What can possibly go wrong?
Note Added Wednesday Evening, 8/20/25, at 9:00 PM EST: Equities stumbled lower out of the gate this morning with JPM immediately telling clients to buy the dip! Traders were tripping over each other to buy, buy, buy, programmed like Pavlov's dog a la classical conditioning. Pachelbel's Canon in D is a classical masterpiece composed during the Baroque period. The Renaissance came before the Baroque period when the great composers thrived. Jeff deGraaf of Renaissance Macro is another buy the dip guy expecting stocks to go higher. Howard Marks at Oaktree says there is nothing really nutty out there going on and "no reason to expect a correction soon." Marks says the current stock market is comparable to 1997 (so the dot-com bubble did not burst for 2-1/2 to 3 years later). Federal Reserve Chairman Greenspan, the lizard king, had the 'irrational exuberance' speech in December 1996 where he warned of toppiness in markets but that continued for 3 more years into the 2000 crash. Marks expects the same so no worries at all. 'Buy the dip' is the standard mantra of stock trading these days. Bears are as rare as hens teeth. Are all of you on the bull boat listening to the lovely siren call of stock buying each day while unknowingly drifting towards Niagara Falls? Stocks recover off the lows during the day. SPX 6396. Keybot the Quant remains short and is tracking the commodities, semiconductors and banksters as the three most important metrics impacting stock market direction currently. Chips failed today causing the flush lower in equities but then recovered allowing stocks to move higher late-day.
Note Added Monday Evening, 8/25/25, at 6:57 PM EST: Stocks ran higher on Friday after Pope Powell proclaimed that rate cuts will begin on 9/17/25 but did not make new al-time highs even though it would have been simple to do so. The upside orgy, however, did not follow through today. If you bring up the SPX weekly chart, you can see that price prints the matching high to begin the new week of trading and the MACD goes neggie d over the last month to match the multi-month neggie d that was already in place for the weekly chart. Nothing has changed at all with the charts above. It should be spectacular when it collapses. Keybot the Quant flipped to the long side on Friday and is tracking chips, banks and commodities as the main drivers of stock market direction currently. Commodities jump higher today so a failure in the stock market will likely begin with the banks and/or semiconductors. King Donnie buys a stake in Intel embracing communism with open arms. It is hilarious. The US government plans to take stakes in private companies; obviously, this is not capitalism, it is crony capitalism filth as the final stage plays out. Dictator Xi will call to congratulate Dictator Trumpski for his move to take over private companies; he told the orange one for the last decade that the authoritarianism and communism in red China is a better system than US crony capitalism. The Tyrants continue to rule. Get well soon, Sam (Fender has trouble with his vocal cords that may hurt his musical career; hope not). Rail against the tyrants now.
Note Added Saturday, 10/11/25: A mini-Black Friday occurs yesterday after King Donnie threatens tariffs on China in retaliation for restrictions on rare earth minerals. The SPX all-time record high is 6764.58 on Thursday, 10/11/25 and all-time closing high is 6753.72 on Wednesday, 10/8/25. The SPX drops to 6553 starting to receive the neggie d slapdown.
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