Another new all time high this morning in the futures.  The MACD's here on this 2 hour chart are heading up toward the falling trendline where they should make a lower high while the market carves out its' higher high.  Just more negative divergence on various time frames.  How many will it setup before rolling over... don't know?  This market just keeps going up on super light volume and it's going to be hard to time the exact top.  In fact I doubt if anyone gets it spot on, but it's looking like it will be from all the bearishness setting up in the charts.  The mid-2600's have been many peoples' target for a long time and we are certainly very close right now.

But keep in mind that the Fed meeting is today and what is said from it could move the market in either direction fast.  Most of the time the Fed's don't want the blame for a move down in the market so they seem to always say the right thing on FOMC days and they close them up a good 80% or more of the time.  So odds favor a green close today but also remember that Janet Yellen is being replaced so she might just say whatever she wants and spook the market to... you never know with an angry woman!  LOL...  My thoughts for today are that any move up after the FOMC meeting will likely be an exhaustion move as the charts don't support any lasting rally right now.  Whether it ends at the close today or carries into Thurs/Fri is unknown but I don't see more then 1-2 days max on the upside with the way the charts are currently setup.

The DOW Transports are not supporting this rally as they have already rolled over and it seems like there is just a few big stocks keeping this market up with gaps higher on earnings reports.  Mostly the FAANG stocks and once these earnings are over with I just don't see how the market can keep from pulling back.  Today it's tough to call as I don't know what Janet is going to say.  It could rally the market more or force a down move... maybe no move at all?  So I'll just stick with the charts and look for the most likely point of exhaustion where I think the bulls will allow the bears some food to eat.  It should be soon with the way the charts look but I'm not sure if it's going to be today at the close or sometime tomorrow?  For now the bulls still have control... nothing new there.

This morning we are going to look at the 6 hour chart and we can see that its' MACD's are weakening as they get closer together and barely point up.  They are also at triple negative divergence as you can see from that falling trendline I drew on the chart.  On the 60 minute and 2 hour charts their MACD's are pointing up too but also appear weak.  They are setting up negative divergences as well with their lower highs.  The 60 minute chart of the SPX however is lagging behind.  It's MACD peaked around +5.0 last week and is down around +2.5 right now with it trying to turn back up.  If it does I only see a small turn and a lower high at best.  It's stochastic has fallen from +90 down to +50 and is still pointing down.  Since that move only took one day to happen we should see the stochastic turn back up today and retrace half or less of the move down.  The reason for that is the downward pressure the MACD has on it, which will limit any strong move up on the stochastic.

On the actual price of the market (bot the futures and the SPX) they "could" make another higher high today but it really looks like that might be tough with the charts aligned the way they are right now.  But if they can hold the current level all day I think they would have a better alignment tomorrow for a fast move up to a new all time high.  That of course could be from something said at the FOMC meeting since its' tomorrow.  Even still, the charts are just putting in more and more negative divergences so a move over the current high tomorrow could very well be the exhaustion move the bears are waiting on.  Whether they tag 2600 or fall a little short is unknown.  But they clearly are going to try their hardest and should at least make a new high tomorrow that is close to 2600 if they fail to pierce it.

I do think we'll see it hit and beyond but we could have a pullback first and then up later next month.  The issue is that when you get close to a level that everyone thinks will be hit the market see's too many bulls long and will pullback first to shake them out and then go back up later.  That could happen tomorrow after the FOMC meeting, or even before the meeting... hard too say for sure?  I know the market has priced in a rate hike already and if they pull that off the table we could see it dump hard.  Considering that Janet Yellen is likely to be replaced she might not be too concerned about saying something that spooks the market (and it is Halloween today).

We all know that the Fed's don't like to be blamed for any move down in the market, which is why most FOMC days end up with a green close.  Then something a few days later will be blamed for the market rolling over instead of the Fed's.  But if I knew my job was ending by the new president I might just say whatever to dump the market and blame it on that president some how.  Just some food for thought there as we all have become to used too the FOMC meeting closing green and not doing that much "shaking the bulls and bears" lately as it did a lot in the early years of the start of their quantitative easing program.  My thoughts for today are simple, the bulls will likely hold the current levels and try to get a new all time high, but the charts suggests they are too weak to do it today.  Odds favor that happening tomorrow.

The futures this morning fell back slightly from being very overbought Friday and now have a bear flag pattern setup.  However, there's no negative divergence yet on the 2 hour chart or this 60 minute chart.  And we see the MACD's have fallen to around the zero line where they commonly turn back up.  Today is also a Monday which is typically slow as traders come back to work.  Then there's the double top made, which seems to be rare in the indexes I find as most of the time too many traders short it and at some point SkyNet will run back up and take out their stops before going down for any decent pullback.

All these clues tell me that this bear flag has 50/50 odds of playing out and even if it does play out the downside seems limited.  Bulls will most likely contain today into a tight range while they wait for the MACD's to reset back up so they can make another higher high is what I'm thinking.  So a move closer to 2600 is more likely to happen first and then a move down that should retest the prior lows around the 2542 area where the pink horizontal line is at.  For the bears a move up to a new high today/tomorrow is a great opportunity for a short I believe as that would be much preferred as opposed to a move down today of 10-15 points as that would setup a stronger rally for the bulls if that were to happen.

For today though it's might just hold in that tight range as I think it's going to need more time to turn that 60 minute MACD back up.  The 2 hour still has room to go on its' MACD which might be what's needed to get a nice turn back up.  Plus the Stochastic on the SPX 60 minute chart is overbought and needs to go down all day to reset back up too.  Also it's lagging behind the futures and hasn't turned down yet on it's MACD's, which again might need all day to get it aligned with the futures.  What's the bulls need there is an oversold stochastic with a MACD that just barely rolls over thereby allowing a turn back up briefly to make a negative divergence and a higher high.  It's always a guessing game on how the MACD's will align up between the futures and SPX of the different time frames as I always include other things into my speculation, which are the wave counts, day of the week, week of the month, month of the year, FOMC meetings (which we have one this Wednesday), and other things too.

I've moved the blue rising trendlines and you and see that if the futures were to fall a little more today they would hit the top blue rising trendline somewhere between 2565 and 2570 area, depending on when they hit it.  This would be what I'd expect to happen to setup the move higher tomorrow or Wednesday from the MACD's getting that turn back up setup.  Considering we have that FOMC meeting this Wednesday we might not see this move happen until that day as traders again wait to hear if anything new is said from the 2pm EST meeting.  This again is a common pattern when there's a meeting any given week.  Just a bunch of chop in front of it and then a muted move afterwards.

In the old days we'd see some wild swings up and down really fast after the meeting but lately they seem to be a non-event, yet traders still wait to see what ol' Janet has to say.  As long as she doesn't say that they are changing their mind about raising interest rates at this December's meeting nothing much should change in the charts and if we have those MACD's aligned correctly by then I'd expect them to work and a rally up to another new high to happen.  But if they say they are not going to raise interest rates then this market should fall off a cliff.  I don't expect that to happen but anything is possible.  So again for today I expect a tight range of trading with a slightly downward bias more likely to happen then up.

This morning we are going to look at the 2 hour chart and as you can see the bulls did not do the smart thing but instead went down the wrong path by extending the MACD's both on this chart and the 60 minute chart up near the +2.5 area instead of rolling over and setting up some positive divergence.  This is a clear sign too me that we will have another pullback next week as this move up is too weak to extend much longer before rolling over.  The MACD's on the 6 hour (not shown) are barely above the zero line and kinda flat-lined but looking like they could turn back down fairly easy as well.  This again leads me to believe that we'll get another move down next week that should take out the low just made on Wednesday.  Now whether we make a higher high today (or Monday?) or a lower high is unknown but it's more a function of time then price as those MACD's keep pushing up without resetting lower to create positive divergence just means at some point soon (at the close today or Monday) they will run out of steam and roll back down.

If this lines up with the 6 hour too (and it's looking weak today so it could go either way next week) and the daily and 60 minute SPX charts then the move down should surprise the bulls and bears alike.  But for today I'm expecting this rally up to mostly hold as it runs for the double top to try and take out.  I do not know if it's going to make it up there today or push it out until Monday but it certainly is trying hard this morning.  My thoughts are that if we reach a double top today by the close the bears will short it and that would then push it up again on Monday through that double top to a higher high just under 2600, but if they hover around this area here all day the bears might not short and the bulls will stay long over the weekend.  That would then setup Monday to be a nice down day as bears wouldn't be aboard and bulls would be trapped.

So if we reach a double top then I'd expect more on Monday, or if we stay away from the double top I'd expect a move down to start.  SkyNet will figure it all out on how to move the market Monday based on how many people get long and short today I believe.  On the big picture I think the market is going higher but short term we could have another drop start early next week that might go as low as the 2500 area before turning back up.  Hard too say for sure but if it did drop first then we should have another powerful rally to over 2600 in November.  Will we see the 2600+ happen first and then a retest of 2500... don't know?  It's all about how many people are on each side of the trade I think.  If too many get short then we could see the run up first and then the drop.  If too many get long then we should see the pullback and then the run up later this year... like maybe for the Christmas rally?  Have a great weekend everyone.

Surprisingly the bear flag played out yesterday and now we have a small bull flag on this 6 hour chart that is trying to play out right now as it's breaking through the falling trendline as I type this update.  The MACD's hit the zero area and are turning back up too, but on the 60 minute and 2 hour chart (not shown) the MACD's have risen from oversold (around -2.5) to about zero now on the 60 and -1.0 on the 2 hour chart.  So, while the 6 hour chart looks to be hooking back up these shorter time frame charts may need to rollover soon near this zero line and make a higher low (just needs to stay above the prior -2.5 area) to setup positive divergence for another day.  When I add in the lagging short term 60 minute chart of the SPX cash index I see it oversold as well but no turn back up yet.  The longer term view of the same chart shows MACD's still very overbought up near +4.0/+5.0 area from a peak of +6.0 back in early October.  So while the short term MACD's are still pointing down (in the -2.5 area) with no signs yet of turning up this tells me that today we should see fighting charts where the futures want to go up but the cash wants to go down.  And that leads to the rollovers of the MACD's on the futures around the zero line for the shorter term 60 minute and 2 hour charts.

Again though I expect a higher low if this happens to setup positive divergence.  As for the actual price level of the futures that's a hard one to call.  If the charts were all flipped I'd say we'd make a higher high as the market always favors the bulls, but since this suggests a lower low in the price levels of the futures with a higher low on the MACD's I'm not sure we'll see it today as the FED's cheat and hold the market up all the time and don't let the bearish setups play out like the bullish ones.  We hit support yesterday on that move down and I expect it to hold today.  So if the bulls are smart they will allow the MACD's to rollover near the zero line and setup that positive divergence for tomorrow.  But if they are not smart (and let's face it, they are very dumb animals that can't hunt for food themselves and have to be feed daily by farmer Janet... LOL) they will keep charging on upwards all day today and push those MACD's above zero to the point of exhaustion where they are sure to setup a larger drop Friday or Monday that will take out the current support low yesterday.

It would be much smarter to rollover today and go test that low and maybe pierce it by a point or so to setup the positive divergence, but my gut tells me they won't do that and will just keep running hard at full speed all day but not getting too far, but instead just trending water (aka... sideways action).  I've seen this rodeo before and the bulls rarely do what is logical.  They will push and push until they are fully exhausted and then the next move down the bears are going to kick them in the teeth on it.  It all spells trouble for the bulls I think as the best I could see them doing by forcing a continued move up today would be to double top or slightly higher high by Friday, whereas if they would drop back and do that positive divergence they could tag 2600 and beyond... but I just don't think they will play that card today.

My thoughts are that they will stretch the MACD's well above that zero line into Friday where it will setup a move down on Monday/Tuesday that will take out the current low yesterday and make it a distant memory.  Bulls will play this wrong today, I just feel it, and it will haunt them next week when the next drop could have been small but will end up being a much larger I believe.  Anyway, for today I expect chop as charts fight each other.  Just keep your eyes on the MACD of the 60 minute chart as if they push it to +2.5 area today (or thereabouts) instead of rolling over then the bulls are playing the dumb card as I expect them to do.

Bulls are fighting really hard here to keep this down move limited. All they need is another day probably of sideways action to reset the charts back up. Yeah, it sucks for the bears as it seems almost all the bull flags work but the bear flags get manipulated long enough that they fail. It's all about time for the bulls as given enough of it this current bear flag will fail. Clearly it should work but I'm not so sure it will be allowed to? Once the MACD's on the 6 hour chart reach the zero area it's common for them to turn back up. So the bulls just need to keep the price sideways until that happens and then they can rally again

Of course failure to do so would result in a nice move down that should retest the prior lows around 2545 or so. Then this move down would be labeled and ABC of some degree. From there the bulls could put on another nice rally I think, but from current levels the rally should be weak. My thoughts are that we are simply at a crossroads where we should drop from the bear flag but manipulation is so common in the market now that I'd just as well call heads or tails with a coin as it's probably a 50/50 chance either way. But if forced to pick a side I'd go with the bears as I think the daily and 60 minute charts on the SPX cash are lagging behind the futures and are still quite overbought. So that pressure "should" allow the bear flag on the futures to play out.

We had a decent little pullback yesterday and along with the one last week we are clearly showing signs now that the bulls are tired. Today we are a little before the open, which is totally expected. Now the question will be whether or not the bulls make another higher high or just a lower high? There's some nice negative divergence on the MACD's here of this 6 hour chart so we are likely very close to a top now. Whether it's yesterday, today or some other day this week is still unknown but it's close. I'll keep it short and simple for today. I'm looking for a move up, but small today. It's not one I would play as it's not clear if we are going to rocket on up to another new high or fail. A failure today would likely lead to another move down tomorrow but I won't rule out two days in a row of the bulls here trying to make another higher high before giving up the ship and letting the bears take it back down again. Topping is a process that can linger for awhile but it certainly has all the markings of one being formed right now.

Another week has gone by and almost another month too.  Hard too believe how fast time flies.  Anyway, not much to say this Monday morning.  The 6 hour chart is still pointing up strongly on its' MACD's while the 60 minute and 2 hour charts rollover from their peak and will setup negative divergence on them today.  Just from the looks of where I think the MACD is going next I'd estimate that the market will top out later this week.  We need the MACD's to top out first and rollover and back up a hair to create some negative divergence on them I think before the market tops out and allow a nice pullback.  In the meantime we might see some 10-20 point moves down but they shouldn't hold the bulls back.  It should just be part of the topping process, which we are in now.  It looks more and more likely now for 2650-2727 to be the topping area, which was called my Oscar Carboni's OMNI back in January of this year.  I have to give him credit as I certainly didn't see us rising that much back then.

For the short term though we should stop before 2600 and have a decent pullback before going back up later and busting through it.  Everyone now see that level as being hit so it's common to pullback before reaching it.  The range is usually within 10-20 points from past even number targets I've seen.  That projects 2580-2590 this week and then a nice pullback.  But, keep in mind that there should be several attempts made so a fast 10-20 point then rally back up and drop again and rally back up could happen.  It's that choppy action you see when topping.  We may or may not see it this time as we still aren't at the 2650-2727 topping area, which we should see it there.  But this even number target of 2600 might not have too much shaking going on, and instead just rollover for a decent pullback without much notice.  For today though I don't see much going on.  It looks like another tight range day where the bulls don't advance much and the bears might see a few points in the red... but nothing to brag home about.