Bullish or Bearish? Week of January 22, 2018

Here are the latest technical and sentiment indicators:

Technical Indicators (daily chart)

S&P 500 one-month trend = Bullish

S&P 500 is above its 50-day moving average = 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 @ 2748

 

Sentiment Indicators (+RSI)

II survey: (Jan. 17): 66.7% Bulls; 12.7% Bears = Bearish (*Historic sentiment levels)

AAII survey: (Jan. 18): 54.1% Bulls; 21.4% Bears = Bearish

VIX: @ 11.27= Bearish

RSI: (S&P 500) @ 80.60 = Overbought (Extremely!)

Comment: We’re still in an uptrend as the technical indicators reflect. The sentiment indicators are also telling us the uptrend can’t be sustained for long, as they have reached nosebleed levels of optimism. Nevertheless, the wild card this week is the government shutdown. If the market ignores the shutdown, the market should move even higher. Obviously, one day the bull market will crack but it’s impossible to guess when. Keep looking for clues, not opinion or predictions. I’m watching how the market reacts to the shutdown, and whether investors even care. Based on history, when the bull market ends, it will end for reasons that are not immediately apparent to the public or even newsworthy (at first). 

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