Bullish or Bearish? Week of Jan. 30, 2017

Here are the latest technical and sentiment indicators:

Technical Indicators (daily chart)

S&P 500 is above its 50-, 100-, and 200-day MA = Bullish

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

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

S&P 500 support @ 2269 and 2248

 

Sentiment Indicators (+RSI)

II survey: (Jan. 24): 58.2% Bulls; 17.5% Bears = Bearish

AAII survey: (Jan. 25): 31.6% Bulls; 33.5% Bears = Neutral

VIX: @ 10.58 = Bearish

RSI: (S&P 500) @ 64.32 = Bearish

Comment: We appear to be in bubble territory, so caution advised. That being said, market could still go higher. FYI: My latest MarketWatch column is here: goo.gl/0C2H7t

Bullish or Bearish? Week of Jan. 23, 2017

Here are the latest technical and sentiment indicators:

Technical Indicators (daily chart)

S&P 500 is above its 50-, 100-, and 200-day MA but flattened = Neutral

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

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

S&P 500 support @ 2269 and 2248

 

Sentiment Indicators (+RSI)

II survey: (Jan. 17): 60.6% Bulls; 18.4% Bears = Bearish

AAII survey: (Jan. 18): 37% Bulls; 32.7% Bears = Neutral

VIX: @ 11.54 = Bearish

RSI: (S&P 500) @ 57.70 = Neutral

Comment: The indicators are mixed although the market is still overbought. The Investors Intelligence survey reflects excessive bullishness. For many investors, the fear of missing out is stronger than the fear of losing money. For weeks, the market has been in one of the tightest ranges in decades. Typically, this leads to a violent reaction in one direction or another. Since we don’t gamble, the best plan is to sit and wait for the market to make a move, and keep some cash on the side. 

Bullish or Bearish? Week of Jan. 16, 2017

Here are the latest technical and sentiment indicators:

Technical Indicators (daily chart)

S&P 500 is above its 50-, 100-, and 200-day MA = Bullish

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

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

S&P 500 support @ 2240, 2225, and 2200

 

Sentiment Indicators (+RSI)

II survey: (Jan. 10): 58.6% Bulls; 18.3% Bears = Bearish

AAII survey: (Jan. 11): 43.6% Bulls; 27.0% Bears = Neutral

VIX: @ 11.23 = Bearish

RSI: (S&P 500) @ 61.33 = Neutral

Comment: Market is in a holding pattern thanks to the computer algos which buy on every dip. We’re still overbought at nosebleed levels but until sentiment changes, nothing changes. CSX is the poster child for overbought: a railroad company rising like a 1999 Internet stock. No one can predict the date and time, but the market is way overdue for a nasty pullback. And if sentiment also changes, that pullback could be worse than expected. 

Update: CSX is on a roller coaster ride. It sank after earnings were announced (-4%), but then rallied back the next day (+23%). FYI, it was a bull raid, a classic short squeeze.

Bullish or Bearish? Week of Jan. 9, 2017

Here are the latest technical and sentiment indicators:

Technical Indicators (daily chart)

S&P 500 is above its 50-, 100-, and 200-day MA = Bullish

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

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

S&P 500 support @ 2240, 2225, and 2200

 

Sentiment Indicators (+RSI)

II survey: (Jan. 3): 60.2% Bulls; 18.4% Bears = Bearish

AAII survey: (Jan. 4): 46.2% Bulls; 25.2% Bears = Neutral

VIX: @ 11.32 = Bearish

RSI: (S&P 500) @ 64.51 = Neutral

Comment: When you’re in a market bubble, it feels really good, and most don’t realize they’re in one until it’s too late. My technician friends say we’re at rarified overbought levels, and I believe them. Nevertheless, it’s too dangerous to short bubbles so enjoy the ride while it lasts. Last week, buying on the dip worked as the S&P bounced off of 2240. Another clue we’re in uncharted territory is a steady transportation stock like CSX is acting like a 1999 Internet stock. Unreal.