The SPX 1-hour chart has lots happening as the chart patterns and spaghetti of lines indicate. The S&P 500 published a new all-time shutting high at 2166.89 last night, 7/18/16, however, not a fresh all-time high. The all-time high is 2169.05 from Friday, 7/15/16. The red arrows show the standard deviation rings squeezing in tight in this one-hour timeframe. Today A large move is coming likely from 20 to 30 handles or more perhaps.

Tight band squeezes do not anticipate direction only that a big magnitude move reaches hand. The key 200 EMA, a critical level that recognizes a near-term bull market from a keep market, reaches 2108 with bulls in control over the hours and times ahead. The SPX crossed up through the 200 EMA, which Keystone highlighted at the time. Note the textbook successful back kiss (for bulls) on 7/6/16 and then price became popular skyward. For the bulls, the two-leg bull flag pattern in blue is concentrating on the 2180-2205 area. There is certainly some art mixed up in bull flag projections therefore the case could be produced that the design has performed out.

For the bears, price remains on an island above 2158-ish. The S&P 500 gapped higher from 2152-ish to 2158-in and sits on the island for the last four times. An island reversal design would take place if price drops lower to the 2157-2159 level, then, immediately, prints 2152 and lower dropping down through the difference back.

The red lines show the rise in charges for the last week with a negative divergence in the indications. RSI and stochastics were/are at overt levels. Price is running out of oomph to go higher but looking for the top the previous few days is like looking forward to Godot. The negative divergence should make a spankdown.

Stocks are usually bullish moving through the entire moon each month which peaks in a few hours. However, the number low CPC and CPCE put/call ratios suggest excessive complacency and lack of dread and are viewed as a lot more important when compared to a seasonality factor. The reduced put/calls forecast a drop in the SPX of about 40 to 120 handles from current levels.

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Adding another level of complexity, the ECB rate decision and President Draghi press conference are on Thursday. The central bankers will be the market. So if Draghi flaps his dovish wings, stocks go up. If he balks and wants to delay more stimulus, stocks tank. As always, for the last eight years, the central bankers control the market.

What does all of this mumbo-jumbo mean? Taking into consideration the negative divergence and the low put/phone calls, the expectation is for stocks to sell faraway from current levels. The tight bands indicate the flush lower may be fast. The crazy card is the ECB on Thursday. Today and make an effort to remain buoyant in to the ECB meeting If stocks rally, the reduced put/calls have to extract their pound of flesh therefore the forecast would remain for a pull back in stocks. Keystone is holding/adding near-term shorts looking for the top in here. They are not your grandfather’s markets.