SPX S&P 500 Monthly Chart; Negative Divergence Developing; Overbot; Price Extended; Upper Band Violation; Historic Stock Market Top Saga Continues

There is lots of talk from big-shots these days about a major top. No one was talking that way as the top formed when the year started. The put/calls and other metrics continue showing complacency and fearlessness in the stock market with traders and investors willing to buy any dip. It feels a lot like 1999. The difference is that you have ongoing Iran War hype where King Donnie is manipulating oil prices, and thereby the stock market, as well as the ongoing AI and semiconductor orgy party.

JPM CEO Jamie Dimon says margin debt is at an all time high (like 1999). Not a day goes by without seeing a new story about Michael Burry calling a major top. He is a fundamental analysis guy that digs deep into the data and numbers. There is no need for that. Simply let the charts tell you when the top is in. Keystone has been describing and monitoring this potential historic top since the end of last year so it is about a 10-month saga. The blue circle is all you have to watch to know when the historic top is in place; it may be right now this month. Let's take a look at the tops in recent years.

The top to start 2022 was an easy call. Price prints the matching or higher high so the chart indicators can be assessed and everything was in negative divergence (red lines sloping down as price slopes up). There is no more fuel in the tank so bloop, the SPX collapses on the monthly basis. The RSI and stochastics were overbot agreeable to a pullback.

Markets bottom in October 2022 and begin this long 4-year AI orgy rally. Then the top was described as 2025 started. It was firm neggie d and worthy of the top call but you can see how the MACD line was more flattish. Stocks drop into April 2025 when they are stick-saved again.

Then the top forms to start this year and again, the chart is in full neggie d but that temperamental MACD line remains flattish rather than sloping lower to clearly display neggie d. Keystone called that top with the help of the SPX weekly and daily charts that were cooked with neggie d so you knew stocks would drop on the weekly basis, and the negative divergence above also helped. However, the MACD just does not want to give-in instead wanting to leave the door a hair ajar for more upside on the monthly basis.

That brings us to the end of April. The thin maroon lines show the MACD once again topped-out with the other indicators so the historic top has finally arrived. Keystone had one caveat, however, and that was the MACD line that still may want to sneak higher, and it did. At the same time, we have the daily King Donnie war hype that sends oil prices lower and stocks higher and the ongoing AI, tech and chip orgy. That creates this lofty perch for the last 4 months.

Right now, price makes a higher high in fact, a new all-time high at 7793.68 on 8/5/26 and a new all-time closing high at 7736.52 on 8/4/26. Thus, mathematicians say thus a lot, that is why Keystone was disinvited to the summer party at the country club, the indicators can be assessed for neggie d, that remains in place, except for the pesky MACD line (blue circle). This is all you have to watch to know when the historic top is in place. It could be this month.

Price has violated the upper standard deviation band so a trip back to the middle band at 6658 is on the table on the monthly basis. Price is extended above the moving average ribbon (price above the 10 above the 12 above the 20 above the 50 above the 200) desperately needing a mean reversion lower. The ADX shows that the SPX is NOT in a strong trend higher despite all-time record highs in price. Not only that, but the ADX shows that the trend higher is weaker than when the top formed 1-1/2 years ago.

The brown circles show distribution taking place where the smart money is sloughing off shares to the dumb money. If the investment houses are dumping shares during the happy rally times, that means Joe Sixpack, Carlos Bagholder, Savita Sucka and Carmelita Fool are caught up in the hype buying the dips with both fists.

Okay, so enough with all that mumbo-jumbo. All anyone cares about is what is going to happen next. They attend service at the Church of What's Happening Now (a reference from many years ago). The historic top on the long-term multi-month and perhaps multi-year basis is not in until the MACD line goes neggie d. This month of August has a long way to go. If stocks give up the ghost and begin falling apart, watch the MACD. If the month ends, on Monday, 8/31/26, and September trading begins on Tuesday, 9/1/26, and the MACD line is neggie d, it is over. The historic top is in and the stock market will trail lower for many months if not years to come.

If this month ends and the MACD line still points higher, that is getting harder and harder to believe since it is already up in nosebleed territory with nowhere to go but down, the SPX is still going to need a month or two to place the historic long-term top (October crash?). But stick in the here and now since the long-term historic top may be in this month if the bears can create selling pressure.

So do not pay attention to all the articles and constant chatter about stocks collapsing, or going to the moon, all you have to do is watch the blue circle and you will be able to call the historic top yourself. You're So Impatient. 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.

SPX S&P 500 Daily Chart; Channel Breakout on King Donnie and Secretary Bessent Strait of Hormuz Happy Talk; S&P 500 Prints All-Time Record High at 7794

King Donnie Chumpski rides in on his pale green horse to save the day. It is a crazy week with bazaar price action. The huge rally to new record highs is on the Iran War hype. The SPX prints an all-time high at 7758.21 and all-time closing high at 7736.52 on 8/5/26 a historic move one for the ages. King Donnie must feel that he has his big boy pants on and can rule the world manipulating markets at will.

Trumpski stopped the military action against Iran on the weekend. Do you think he told his family and crony friends that on Friday? Of course he did. They made millions. It is called crony capitalism filth. Donnie said the Strait of Hormuz would open yesterday but the minute he said that everyone knew he was talking out of his butt, and he was. What is the need for bloviating every 10 minutes? The diarrhea of the mouth. But Secretary Bessent jumps into the ring and proclaims that a deal on the strait will occur yesterday or today. Oil prices collapse on the Iran War hype sending stocks to the stratosphere.

A drop in oil will help tame some of the ongoing Trumpflation and make Fed Chairman Warsh's job a bit easier. The Fed may not worry so much about runaway inflation to the upside since oil prices are dropping faster than a prom dress at midnight. Overnight, King Donnie decrees that a deal on the Strait of Hormuz will occur today. Do you believe it? Of course not. 10 minutes went by so he needs to bloviate again.

Iran plays dumb to it all and says they are actually near a deal with Oman to control the strait going forward. At the same time, the Red Sea is now a mess that Trumpski will likely have to address. It is obvious that Donnie stopped military action because Iran was going to blow up energy infrastructure and desalination plants (that provide water) in Saudi Arabia, Kuwait, UAE, etc..... Donnie flinched and that is not good for anyone's future. Trump changed the Middle East for the worse with the war adventurism. Arab states will now forever fear military attacks from Iran.

The path forward depends on the so-called deal details to perhaps be released at any time going forward. The orange channel at 7300-7600 held for months but price explodes up through like it was not even there. The diamond pattern was nullified. And the sideways symmetrical triangle that had the breakdown to the bottom channel rail at 7300, with more downside on tap, was nullified. Stocks were stick-saved by King Donnie having to stop military action due to Iranian threats against Middle East countries. Sounds like Chump may have lost the war despite the destruction to Iran?

Price jumps from below the standard deviation band to above the upper standard deviation band in only 4 days. That is wild and very rare price action. It is testimony to the Iran War  hype controlling the stock market right now specifically the status of the Strait of Hormuz and now the Red Sea.

The chart indicators remain in negative divergence but you have to give it a couple-few days since this rally move is pure momentum to the upside and first, you have to see where it stops. Is the news priced in so stocks will be sold once the Hormuz deal is announced? Or will an even bigger rally to the upside occur when the deal is announced? Donnie created a mess and it is odd that the stock market is in party mode.

Traders and investors only focus on positive news and happy talk while ignoring any negativity. It is interesting and expected behavior at a major stock market top that has been trying to form since the end of last year. The dribs and drabs of AI and chip hype, spritzed in with Iran War hype, keep the party going. Another oddity was a big up day yesterday and the VIX was also up. Very bazaar. Also, is the frenzy of money rotating into and out of the top stocks such as AAPL to MSFT to AMZN. Strange stuff.

Oddly, the Keybot the Quant robot remains short. Figure that one out? Utes, commodities and chips are controlling the stock market technically right now, but it is of little impact since King Donnie's pending Strait of Hormuz big-time deal will dictate the path forward. Maybe Trumpski needs to talk to The Gambler to receive tips on deal-making. 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 Morning, 8/6/26, at 6:21 AM EST: Stocks pull back a hair after printing another all-time record high at 7793.68. The stock market is waiting on the Iran War deal but that is an ongoing mess. Iran and Oman say they have a deal concerning the Strait of Hormuz. Where is the US? Chump continues bloviating saying the strait may now open today or tomorrow. The constant diarrhea of the orange mouth is getting old. Even Trumpski's die-hard supporters on social media are telling him to shut-up with the constant talk of a deal, and they are dying to make a deal, and all that garbage that is made-up lies. After that is repeated 50 times and it is BS each time, people stop listening and no longer take you seriously. So Donnie's Iran War mess continues. Trumpski is the modern-day Neville Chamberlain slowly leading us into WW III with his appeasement of radical Islamists. Donnie is distracted by a bunch of nonsense like the reflecting pool and Jeanine Pirro dropping the lawsuits against alleged vandals. Media and everyone is missing the boat on what is happening. The last thing that Chump did as he left the Whitehouse with Melania at the end of his first term was to pardon Pirro's husband. Now in the second term, he gives her that top job as the top dog in DC. Donnie thought it was understood that he owns her. Like a mob boss, he did a big favor for her and her family and she is supposed to do what he says. It is that simple. What bloviations are ahead for today? Donnie can be a Ramblin' Man but with his orange mouth not with his feet. Dickey owned that song. Those Delta women think the world of me.