Bullish or Bearish? Week of April 24, 2017

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. 

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