SPX S&P 500 Monthly Chart; Overbot; Rising Wedge; Negative Divergence Developing; Upper Band Violation; Price Extended

The SPX monthly chart watch continues since this holds the key to calling the historic stock market top that is so close you can taste it. Keystone has been explaining the saga all year long and April was a false dawn that was erased by AI and semiconductor happy talk and King Donnie Chump Iran War happy talk.

You can call the historic stock market top, on the monthly basis, when the MACD line rolls over with neggie d (blue circle). Since all other indicators are negatively diverged and the MACD line is in nosebleed territory, it may simply start falling and begin the historic pullback from this lofty perch.

The SPX shows overbot RSI and stochastics, and money flow, all agreeable to a pullback on the monthly basis. Price violated the upper standard deviation band so a pullback to the middle band, the 20-mth MA, at 6655 is on the table, as well as the lower band at 5399, both rising. Price is extended above the 10-mth MA above the 12-mth above the 20 above the 50 above the 200 so a mean reversion lower is desperately required.

The big volume candlesticks on the sell side show distribution taking place with the smart money gittin' outta Dodge while Joe Retail, Sam Sixpack, Carmelita Fool and Savita Sucka hold the bag caught up in the daily hype. The ADX shows that the stock market is NOT in a strong uptrend despite new all-time record highs. In fact, the trend higher now is weaker than 1-1/2 years ago despite the record highs.

The green Aroon line at 100% indicates that every single bull on Wall Street continues to believe that stocks will go up forever. That is why everyone has an end of year SPX target at 8.0K to 8.4K. Every analyst on Wall Street says the S&P 500 will gain from 400 to 800 points by the end of the year that breaks down to 100 to 200 points per month for the next 4 months. What are they smoking on Wall and Broad? That must be some of that 80% THC stuff from the vape shop. Instead, they will likely see stocks falling by that amount.

The red Aroon line for the bears shows that they have gone from being 100% bullish like the bulls to now about 70% bullish. That is what you see at tops. The bulls are relentless in their bullishness and the bears are bullish, too. The CPC put/call ratio drops again verifying the enduring stock market complacency and belief that stocks will never go down again. Even if stocks drop, young people say it is a buying opportunity but they are brain-washed by the media just like they were with the climate change saga and glorified golf carts (EV's). Keystone has heard this misguided belief from young folks recently. Sometimes the only way to learn is to get your pants pulled down, lose your shirt, and wear a barrel for a while. Do you plan on being stupid?

There are 6 trading days remaining in August and then a new candlestick will begin for September. Price has made the higher highs this month so the indicators can be assessed for neggie d and all are in place to call the historic top that will begin a multi-month and likely multi-year pullback, except for the pesky MACD. Sometimes it is like herding cats to get all the indicators to line up with neggie d to call the top. This baby game has been going on year long. It is time to top it out and be done with it. Let the piece of sh*t crumble into oblivion as it deserves.

Over the coming days into month-end on Monday, 8/31/26, watch to see if the MACD line flattens or slopes lower to lock in the neggie d and historic top. It will only do that if there is a big selloff this week into early next week. Again, however, the MACD is jammed into the ceiling and has nowhere to go but down anyway.

If the MACD continues to slope a hair higher, like now, on Monday, 8/31/26, then check out the chart after the first few days of September play out. Price will be at the highs so that will allow an assessment for neggie d and it is a safe bet that the MACD will be negatively sloped in September. You can almost see an epoch scenario where stocks begin to tumble lower now, or during September, and then when October hits, it is crash time. That would be fun.

Speaking of crash time, the utilities collapsed on Friday but no one noticed because they were too busy buying stocks. It is funny stuff. This is serious business. UTIL, or DJU, lost its 50-wk MA and remains in a weekly downtrend based on the closing price from 15 weeks ago (watch UTIL 1092 for next week). Shout out to Norm Fosback. The failure of the utes opens the door to a crash scenario going forward. Typically,  a run of the mill pullback would be expected of -3% to -5% even -10% followed by a recovery. The failure in utes changes the game. It is time to clench your buttock cheeks if you are long the market. When the utes lead the broad stock market lower, there is likely a -10% to -20% drop on tap and perhaps a lot more as the months play out.

When she starts falling, watch the 10-mth MA at 7149 as the early warning system. The 12-mth MA at 7085 is the line in the sand between a cyclical bull market and bear market. All hope is lost once 7085 gives way. A 6-handle is a given and a 5-handle will likely appear as the months play out. That would be a long way from SPX 8.4K. No wonder the screen printer will not start printing the "SPX 8K" hats until Wall Street provides a down payment but the analysts calling for these bigtime numbers will not pony-up the dough.

This is bigtime stuff folks and Keystone is the only one explaining it to you in real-time. Plan accordingly. You can only pick up those nickels in front of the bulldozer for so long before you trip and your pants leg gets caught under the roller. Everyone is trying to Reach for the Sky. I never thought about no future, it is just a roll of the dice, don't think about no future, forget about the past, because tomorrow may never come. 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.