Bullish or Bearish? Week of Dec. 11, 2017

Here are the latest technical and sentiment indicators:

Technical Indicators (daily chart)

S&P 500 is well above all its moving averages = 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 @ 2640

 

Sentiment Indicators (+RSI)

II survey: (Dec. 5): 64.2% Bulls; 15.1% Bears = Bearish

AAII survey: (Dec. 6): 36.9% Bulls; 34.2% Bears = Neutral

VIX: @ 9.58= Bearish

RSI: (S&P 500) @ 71.63 = Bearish

Comment: Last week was a little rocky but the market recovered quite nicely, so the bull market continues. Everyone everywhere is talking about bitcoin. I see a bubble while others see opportunities. So far, the opportunists have been right as bitcoin goes to the moon. Its chart is the textbook version of parabolic, and yet no one wants to sell because they’re afraid to miss out on the next 100% rally. Bubbles are so much fun on the way up, but they destroy wealth on the way down. The problem with bitcoin is we all know its price but not its value. I’ll bet even shoe shiners are telling their customers to buy bitcoin. 

This week is a Fed meeting, which is typically bullish. Add in the holidays and you have the making of a low volatile, moderately bullish environment for stocks. However, astute traders are on guard right now. After all, red flags are everywhere, but few see them. Here is Lance Robert’s view of the current market environment, and I think he nailed it perfectly: https://goo.gl/Yka497

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