Bullish or Bearish? Week of May 29, 2017

Here are the latest technical and sentiment indicators:

Technical Indicators (daily chart)

S&P 500 is 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 slightly above its signal line = Bullish

Observe: S&P 500 support @ 2400

 

Sentiment Indicators (+RSI)

II survey: (May 23): 51.9% Bulls; 18.3% Bears = Bearish

AAII survey: (May 24): 32.9% Bulls; 30.0% Bears = Neutral

VIX: @ 9.81= Bearish

RSI: (S&P 500) @ 63.05 = Near overbought

Comment: The bull market continues as the S&P surpassed 2400, although not with strong volume or conviction. Nevertheless, the market is in an uptrend, and if there is a pullback, the only strategy that is working is “buy the dip.” One day buying the dip won’t work, but until that day comes, you follow the trend. It’s true we’re getting ever closer to a correction (and bear market), but the inevitable smash could be months away, and perhaps even next year. Meanwhile, every pullback has been a buying opportunity. The ridiculously low VIX is a warning sign, and RSI is near overbought. Otherwise, it looks like blue skies ahead…….(for now).

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