Bullish or Bearish? Week of May 8, 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 above its signal line = Bullish

S&P 500 support @ 2366 (50-day moving average)

 

Sentiment Indicators (+RSI)

II survey: (May 2): 58.5% Bulls; 17.9% Bears = Bearish

AAII survey: (May 3): 38.1% Bulls; 29.9% Bears = Neutral

VIX: @ 10.57 = Bearish

RSI: (S&P 500) @ 65.55 = Bearish

Comment: The S&P 500 is at the upper range with resistance at 2400, a few points away. Many technical indicators are bullish while sentiment indicators are warning that the crowd has become overconfident. Nevertheless, if the S&P breaks through resistance, the bulls remain in control. However, the odds are that the market retreats, and will either move sideways or down during the week. Last week, volatility was crushed as the market moved sideways. In a challenging market like this, it’s suggested you keep money on the side to take advantage of extreme conditions, if any.

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