Bullish or Bearish? Week of Dec. 5, 2016

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 pointing down = Neutral

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

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

S&P 500 support @ 2178 and 2156 (50-day moving average)

 

Sentiment Indicators

II survey: (Nov. 29) 56.3% Bulls; 22.3% Bears = Bearish

AAII survey: (Nov. 23): 43.8% Bulls; 25.1% Bears = Neutral

VIX: @ 14.12 = Bearish

RSI: (S&P 500) @ 58.26 = Neutral

Comment: Most indexes are beyond overbought. The bulls are hoping for a xmas rally; the bears believe higher interest rates will derail the rally. My opinion: With ridiculous overbought readings and over-exuberance, I will err on the side of caution. It’s too early to short heavily, but too risky to go long. One thing for sure: Many experts, and retail investors, believe this market is unstoppable: Hello 1999 (again). 

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