Bullish or Bearish? Week of July 3, 2017

Here are the latest technical and sentiment indicators:

 Technical Indicators (daily chart)

S&P 500 is slightly above its 50-day MA = Bullish

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

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

S&P 500 support @ 2400

 

Sentiment Indicators (+RSI)

II survey: (June 27): 54.9% Bulls; 18.6% Bears = Bearish

AAII survey: (June 28): 29.7% Bulls; 26.9% Bears = Neutral

VIX: @ 10.40 = Bearish

RSI: (S&P 500) @ 49.36 = Neutral

Comment: Although this is a shortened week, it could give us clues as to market direction. The S&P is near support, and it’s anyone’s guess what it will do. Previously, when the S&P came near support levels, it typically bounced. Based on past behavior, the odds are good we will get a short-term bounce. Nevertheless, if the S&P keeps falling, it could slice below support levels (2400) and keep going. Anything is possible so observe what happens if and when the S&P reaches the 50-day moving average.

I’m also watching the FANG stocks, Facebook, Apple, Netflix, and Google, which got beat up pretty badly the last few weeks. If these stocks keep struggling, it would not be positive for the overall market.

 

 

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