The Weekly Trader

Here are the latest technical and sentiment indicators:

Technical Indicators (daily chart)

S&P 500 is above its 50-day MA = Bullish

MACD (S&P 500; 19,39,9) is above its zero line = Bullish

MACD (S&P 500; 19,39,9) is below its signal line = Bearish

Observe: S&P 500 resistance @ 2400

 

Sentiment Indicators (+RSI)

II survey: (May 16): 58.1% Bulls; 17.1% Bears = Bearish

AAII survey: (May 17): 23.9% Bulls; 34.3% Bears = Neutral

VIX: @ 12.04 = Bearish

RSI: (S&P 500) @ 51.05 = Neutral

Comment: Last week was quite interesting as volatility appeared, if only for a day or two. This week I have my eye on the S&P 500. There is major resistance at 2400. If the S&P can blow past 2400 on heavy volume, it would be bullish. On the other hand, if the S&P is unable to surpass 2400 for any length of time, the chances are good there will be a major “topping out” reversal, likely within the next one to two weeks. This kind of market is dangerous because sudden reversals often occur in either direction. Nevertheless, my opinion is meaningless. Only the market is right so be alert. As I recommended over the last few weeks and months, have a healthy amount of cash on the side.

Bottom line: Now is the time to pay close attention to the market.

Here are the latest technical and sentiment indicators:

Technical Indicators (daily chart)

S&P 500 is above its 50-day MA = Bullish

MACD (S&P 500; 19,39,9) is above its zero line = Bullish

MACD (S&P 500; 19,39,9) is even with its signal line = Neutral

S&P 500 support @ 2368 (50-day moving average)

 

Sentiment Indicators (+RSI)

II survey: (May 9): 58.7% Bulls; 17.3% Bears = Bearish

AAII survey: (May 10): 32.7% Bulls; 30.2% Bears = Neutral

VIX: @ 10.40 = Bearish

RSI: (S&P 500) @ 58.16 = Neutral

Comment: The market has been flat and boring, and very deceiving. The VIX has been in the basement, breaking a number of records for being so low for so long. If you are trading, all you can do is wait for volatility to appear, and it will one day. It could be days or weeks, or longer, but when volatility appears, traders will get back to work again.

Many investors, however, are feeling pretty confident. Margin levels are at all-time highs and index funds are more popular than ever. So far, the strategy is working. A few experts have warned that the market is in the danger zone, but few are listening. 

When I look at the overall market, I see the danger signs, which is why I like holding a healthy amount of cash. I am also patient enough to wait for the market to make up its mind which way it will go, and for volatility to return. In fact, I’m curious how long this low-volatility environment can continue. Hint: Not indefinitely. Until then, be careful out there.

Here are the latest technical and sentiment indicators:

Technical Indicators (daily chart)

S&P 500 is above its 50-day MA = Bullish

MACD (S&P 500; 19,39,9) is above its zero line = Bullish

MACD (S&P 500; 19,39,9) is above its signal line = Bullish

S&P 500 support @ 2366 (50-day moving average)

 

Sentiment Indicators (+RSI)

II survey: (May 2): 58.5% Bulls; 17.9% Bears = Bearish

AAII survey: (May 3): 38.1% Bulls; 29.9% Bears = Neutral

VIX: @ 10.57 = Bearish

RSI: (S&P 500) @ 65.55 = Bearish

Comment: The S&P 500 is at the upper range with resistance at 2400, a few points away. Many technical indicators are bullish while sentiment indicators are warning that the crowd has become overconfident. Nevertheless, if the S&P breaks through resistance, the bulls remain in control. However, the odds are that the market retreats, and will either move sideways or down during the week. Last week, volatility was crushed as the market moved sideways. In a challenging market like this, it’s suggested you keep money on the side to take advantage of extreme conditions, if any.

Here are the latest technical and sentiment indicators:

Technical Indicators (daily chart)

S&P 500 is above its 50-day MA = Bullish

MACD (S&P 500; 19,39,9) is above its zero line = Bullish

MACD (S&P 500; 19,39,9) is slightly above its signal line = Neutral

S&P 500 support @ 2363 (50-day moving average)

 

Sentiment Indicators (+RSI)

II survey: (April 25): 54.7% Bulls; 17.9% Bears = Bearish

AAII survey: (April 26): 38.1% Bulls; 31.7% Bears = Neutral

VIX: @ 10.82 = Bearish

RSI: (S&P 500) @ 60.57 = Neutral

Comment: Last week, we had a two-day rally, which ran out of gas midweek. With the Fed on tap to speak this week, we might get increased volatility. For an excellent, detailed analysis of the current market, read Lance Robert’s most recent column here: goo.gl/4A1eWq

Here are the latest technical and sentiment indicators:

Technical Indicators (daily chart)

S&P 500 is below its 50-day MA = Bearish

MACD (S&P 500; 19,39,9) is slightly above its zero line = Neutral

MACD (S&P 500; 19,39,9) is below its signal line = Bearish

S&P 500 support @ 2330

 

Sentiment Indicators (+RSI)

II survey: (April 18): 51.9% Bulls; 18.3% Bears = Bearish

AAII survey: (April 19): 25.7% Bulls; 38.7% Bears = Neutral

VIX: @ 14.63 = Neutral

RSI: (S&P 500) @ 48.71 = Neutral

Comment: The S&P futures gapped up almost 1% overnight (at this writing) based on the election results from France. Although the market might open up on the high side, there is no guarantee it will last. The only guarantee is this week will be volatile as GDP is released on Friday, tech heavyweights report earnings, political and geopolitical events heat up, and Congress returns from vacation. 

If you are bullish, it’s risky to chase the spike at the open. If you are bearish, it could be too early to short (i.e. fading the gap). It’s times like this that the wisest choice is to sit back and wait before pouncing. Observe whether the morning rally holds, or reverses. Observe how the market closes. It’s very likely the market is going to zig and zag all week, so be prepared for any scenario. It is going to get interesting, so be careful out there.