SPX S&P 500 Daily and Weekly Charts; Potential 2-Leg Bear Flag; Head & Shoulders

Here is an update of the SPX daily and weekly charts as price chops sideways. Chop-suey can chew up bulls and bears. The 3-month top drama at 6200-6700 continues. Some analysts are not worried about a selloff or AI bubble because they say a blow-off top still has to occur to mark a top like the dot-com bubble. Analysts proclaim that the bulk of profits are made in this final acceleration phase as price tops out in a frenzy. That sounds good and does reflect history, however, not one person has said that the last 3 months is that blow-off top.

The daily chart shows the bearish rising wedge pattern, overbot conditions and universal neggie d across all indicators (redlines) that creates the spankdown. It is a text book top due to negative divergence and price is smacked lower on the daily basis. Price chops sideways for the rest of the week hoping to make it to 10/29/25 (8 trading days away) when Pope Powell will bring the tablets down from On High and tell traders how to trade (another rate cut is on the table to protect the wealthy that own the stock market).

Stocks are up about 80% of the time going into the Fed meeting so that would be early the following week (10/27-10/29). Stocks are typically weak through the new moon that is Tuesday so if the bears are going to growl, they have a window this week but next week will be harder as traders anticipate Santa Powell to hand out rate cut gifts while inflation is damned to the land of misfit toys.

Price keeps bumping its head on the 20-day MA resistance ceiling at 6674 and is having trouble popping up through. It will be a big deal for bulls if the SPX can get above the 20. Note that the biggest volume day over the last 6 weeks is the big down day on 10/10/25. Traders and investors are getting nervous that they are out ahead of their skis.

The blue lines show a potential 2-leg bull flag pattern. Say what? The first leg is the move off the top down to 6550 call it 210 points lower. Price then consolidates sideways with a slight upward bias forming the flag, like now. It is textbook so far. If price collapses from here, using the 6680 level as the starting point to begin the second leg down, that would target 6470-6480 where key price support exists. The price support gives the target a bit more street cred that it may occur.

The other pattern of interest is the good ole H&S the head and shoulders pattern. No, not the shampoo. Do not be sad if you have dandruff, wear a white shirt, and be glad that you have hair. The purple lines show the head and two shoulders and below that are 2 more lines that are potential necklines one at 6600 the other at 6550. If 6550 is lost, the 2-leg bear flag will likely play out.

Let's keep the numbers simple for Simple Minds. Say the head is 6750 and neck is 6600 so that is 150 difference thus, if price loses the 6600 level, 6450 is the downside target and there is lots of price support down there. If the neckline at 6550 fails, that is two hundo difference so the downside price target if it fails will be 6350 again a nice price support target from August. The daily chart looks like spaghetti so what is the weekly chart doing?

The SPX weekly chart tops out as previously explained previously in real-time. The rising wedge, overbot conditions and neggie d across all chart indicators makes the top call easy. The weekly chart shows how price remains up in the stratosphere with traders champing at the bit to buy all dips. The bulls are having fun and form a Conga line to celebrate.

A failure of 6550 would lead to trouble and this matches the neckline for the H&S on the daily chart. The big weekly buy volume candle from early September has not been surpassed but price chops sideways in this price range not yet willing to decide which way to exit.

The negative divergence on the weekly chart is big trouble because it tells you that a multi-week selloff has started. The expectation is for downside stock market action but King Donnie may proclaim happy talk about China tariffs or some other made-for-tv crap for the daily reality television show, or the rate cuts will be hyped for the next 8 days so stocks can make it to the 10/29/25 Powell Promised Land when manna from Heaven will be provided.

Price did not tag the upper standard deviation band that would have been a nice touch for the bears but if you look back to the February top, stocks topped out without touching the upper band. The middle band at 6382, and rising, and lower band at 5932, and rising, are on the table during the multi-week selloff that should continue this month and into Thanksgiving.

The stock market is cooked technically so any stick-saves depend on happy talk from King Donnie or Pope Powell. Remember, in a serious downturn, you sell what you have to to cover margin calls, including your grandmother's ring or your wife's bracelet. This is why in a selloff, novice investors that think they are protected in gold or bitcoin get slapped hard just like the broad stock market. People do not want to sell their gold or bitcoin but they will to cover margin calls as they lose their shirts in the stock market downtrend.

If you are a bull, all of your hope rides on King Donnie and Pope Powell happy talk. This week we will see if the stock market is so passe, like heroin. The Dandy Warhols. 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 Monday Evening, 10/20/25: The bulls come to play goosing retail stocks and commodities higher. The King Donnie happy talk about China trade policy boosts stocks. Ditto the promise by a Whitehouse jackass that the government shutdown will end any day forward. Ditto the happy talk about the rate cut on tap next Wednesday (9 days away). In addition, Sapple iPhone sales are better than expected so a tech orgy begins. The rout was on and the SPX explodes higher to 6735. The bounce or die decision at the 20-day MA at 6676 results in a bounce and move higher. Price should come back for a back kiss to make sure it wants to go higher. There was no reason for price to move higher due to the neggie d on the daily and weekly charts but the happy talk was enough to goose prices higher today. The bulls sing "Monday, Monday" so good to me, but can't trust that day. The 2-leg bear flag pattern is busted but the H&S is still in play and now price will likely top-out again with a double-top.

Note Added Thursday Evening, 11/20/25: The broad stock market sells off for a few days and takes the pipe today with the SPX dropping down to 6538.