The SPX begins receiving the negative divergence spankdown. Divergences are the most powerful force in stock trading both neggie d and possie d. The SPX charts are toast. Trading is like playing multi-dimensional chess but time instead of space are the dimensions. As seen above, the stock market is sh*tting the bed in the daily, weekly and monthly timeframes. That is ugly.
A rising wedge pattern appears on the daily chart a bearish pattern. Stocks made the new record high at 6427.02 on Thursday, 7/31/25, then began puking its guts out receiving the neggie d smackdown. All the chart indicators are in negative divergence (red lines) as price made the new highs so the SPX was on borrowed time and it receives a slap to the face, like Keystone when he was fresh with Missy many years ago.
The standard deviation bands are pulling in tight on the daily which places force behind the move. Since it has already dropped towards the bottom band, a move to touch the 6196 would be in order. The blue circles show 9 distribution days during June and July. That is the smart money sloughing off shares to the dumb money such as Joe Sixpack, Juanita Retail, Carlos Bagholder, Frank Fool and Carmelita Sucka (the selling volume candlestick is higher than the buying volume candlestick the day before; the sucka's get bulled-up on hype and run in after an up day to buy the market and that is when the institutions distribute shares to these suckers and bagholders).
The indicators on the daily chart remain weak and bleak wanting to see lower lows in price on the daily basis. The RSI slips below 50% into bear territory saying goodbye to the joy since April. Watch the stochastics to see if they do the same that will tell you more weakness ahead on the daily basis.
On the weekly chart, same dealio with the neggie d; it is universal across all chart indicators and the multi-week spankdown begins. The weekly chart is showing neggie d not only across the last year but also for the last two weeks as the stock market prints the highest number in history. It is a piece of crap. A multi-week pullback begins.
On the monthly chart, same dealio with the negative divergence; it is universal across all chart indicators and the multi-month spankdown begins. This is the chart that tells you the stock market is in serious trouble and likely printed an epic top like the dot-com bubble top in 1999-2000, and Greenspan's real estate bubble top and Great Recession in 2008-2009. It is the 2025 Artificial Intelligence bubble top but that does not have a ring to it; let's call it the AI bubble top (even though stocks were also pushed up for many years by the Fed's money-printing that rewarded the wealthy class with higher stock prices for doing nothing; it is called crony capitalism filth that is in its last throes; the 30 million Americans, that screwed the other 300 million over the last 5 decades, are still spending money, having a great time, their consumer spending is helping the economy avoid a recession, so far).
There is no hope for stocks, folks. Massive good news would be needed to turn things around. Recent tariff announcements are met with yawns. That is what King Donnie gets for overexposure of his orange puss each day. You would get sick of your favorite song if you played it 114 times in a row, right? Donnie is the reality television show president and each day is a new episode so he has to get on camera and spew a bunch of stuff to keep the audience's attention and keep the hype going. That schtick gets old and Americans are worried about the plot twists ahead for the next 3 years as his reality television show continues and the tv cannot be turned off.
The daily chart wants to continue lower for a few days. Watch for positive divergence to develop and you can call the bottom when it occurs. The weekly chart, however, remains weak and bleak, so after the daily chart would recover for a few days, it will roll back over and die again. Watch for positive divergence to develop on the weekly chart and you can call that bottom when it occurs probably later this month or in September. However, the monthly chart is weak and bleak calling for many months of downside if not at least a year or two, so after the weekly chart tries to recover off its possie d bottom, say in September and October, it should roll over again to honor the weakness in the monthly timeframe ahead. It is likely that stocks will trail lower, with fits and starts, through the end of the year and into 2026.
The Sunday night futures and Monday trading will be interesting to see if there is strong follow-thru, or weak follow-thru, or a reversal with the bulls fighting back. King Donnie will likely announce some happy talk and happy news about 4 PM EST today two hours before the S&P futures open to try and start the week off on an upbeat note. Instead of hearing happy D and C chords, he may be greeted with sad Em and Am chords. Will the bulls exclaim, "I don't like Monday's?" Boomtown Rats.
Keybot the Quant flipped short on Wednesday after the copper collapse and then the drop in retail stocks and banks on Friday sent equities off the cliff. Bulls have zero hope if they cannot retake XRT 78.03 and XLF 51.67 so watch these lines in the sand closely. 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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