Bullish or Bearish? Week of October 9, 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 @ 2500

 

Sentiment Indicators (+RSI)

II survey: (Oct. 3): 57.5% Bulls; 17.0% Bears = Bearish

AAII survey: (Oct. 4): 35.6% Bulls; 32.8% Bears = Neutral

VIX: @ 9.65 = Bearish

RSI: (S&P 500) @ 76.09 = Overbought

Comment: It appears we’re playing with fire as the bulls continue to control the market. Several veteran traders are warning of disaster but they’re being ignored as the market continues to break new records. Sentiment among retail investors is a lot higher than the AAII survey, as many believe the market “is never going down.” I mean it. Fighting this bull market at these levels is not recommended, but be on the lookout for weakness. When the ball starts rolling, it will be shocking.  Few are listening, but this bull market is not going to end well.  If you’re a trader, you have to believe there will be opportunities in the future. It’s not easy to be patient, and unemotional…but you must. Read Livermore’s book, or watch The Big Short again. 

As usual, Lance Roberts hit it out of the ballpark with his latest analysis: https://goo.gl/ojtfkV

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