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.