SPX S&P 500 Monthly Chart; Overbot; Negative Divergence; Upper Band Violation; Price Extended; US Stock Market Is Topped-Out on Long-Term Monthly Basis

Honey, I'm home. Keystone called the long-term top in the stock market, on the monthly basis, a major top, a week ago on 2/21/26, after the several-month topping saga that was explained each step of the way. Here is the link to that SPX monthly chart from last week that explains the top call. Read that prior post that only takes a few minutes and then this post will make more sense for you. The new March candlestick begins for the monthly chart yesterday and that would serve as a confirmation for this major top.

The high for March thus far is 6901 yesterday. That is close enough for a matching price high but it was not needed to verify the negative divergence. The red February price candlestick shows the negative month after price printed the matching high to the prior months. Therefore, the chart indicators can be assessed for neggie d. Price chopped along for 5 months continually teasing the all-time record highs.

Following the black line down, since that is the last price high that was made, shows, and verifies, that ALL the chart indicators are neggie d (indicators are sloping down, as the red lines show, as price continues to make matching or higher highs). The SPX is completely out of gas and there are not even any more fumes left in the tank. The S&P 500 piece of trash broken down on the side of the road as the entire bulled-up nation is at the stock market party waiting for more Fed and Trumpski booze to arrive. The Party Is Over, as Willie sings. Turn out the lights. They say all good things must end.

If you are a novice trader wet behind the ears, get out of the stock market before you get hurt. Keystone has been telling you this for the last couple months. Now it is time to sh*t or get off the pot. There is no more time. Anyone that stays in the stock market will lose a lot of money over the coming months and year or two. The slump may last several years.

The old-timer's watch the 10-month MA at 6692 as an early warning system. When this fails, it is a yellow caution light flashing with sirens going off. The 12-mth MA is at 6534 and this is the line in the sand when the bear market begins.

Note that price last touched the lower standard deviation band in 2022. The upper band started to be violated in late 2023. The collapse last April due to the Trumpski tariffs brought price lower but it did not test the lower band or the 50-mth MA at 5156. The stock market orgy ran price higher as traders tripped over each other to buy the dips each month after April.

Price needs to correct down to the middle band that is also the 20-mth MA at 6252 and the lower band at 5275, and rising, is also on the table. That will get everyone's attention especially all the analysts calling for SPX 8K and higher this year with less than 10 months remaining.

Price is extended above the moving average ribbon (price above the 10-mth MA above the 12-mth MA above the 20 above the 50) requiring a mean reversion downward.

Wall Street analysts, strategists and pundits proclaim that there is no AI bubble and this will not appear for another 1 to 3 years. Wrong. You just witnessed the blow-off top. The last 11 months off the April lows is the blow-off top of the artificial intelligence bubble.

AI has been around solidly for about 3 years and in early form for the last couple decades. One of the standard mantras for the last couple years is that AI will provide great drug discoveries. Okay chump, where are they? AI has been in play for 3 years and no one is announcing a huge breakthrough drug. All you hear are crickets. Pharmaceutical companies are not going to share and exchange proprietary drug data so AI would only be an in-house model. Well, where's all the big breakthroughs? There are none. It is business as usual. Do you believe all the AI hype?

Obviously, the play going forward, on the long-term monthly basis, say for the rest of this year perhaps into next year and perhaps far longer (multi-years), is on the short side. Stocks are expected to trail and trend lower for the next many months if not a few years.

The stock market prints the long-term top at 2/26/26 and two days later, on 2/28/26, King Donnie Trumpski declares war against Iran. Isn't that interesting? The orange head probably thinks the stock market is the least of his problems. He be wrong.

Humorously, are you standing there in your loin cloth ready to serve as the bag-holdin' sucka? Sucker by Jonas Brothers. That one dude sings so high he must have put his guitar capo on his nuts. He can sing in the boy's choir. 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.