The Weekly Trader


Here are the most recent market indicators:

S&P 500 is above its 200-day moving average = Bullish 

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

S&P 500 one-month trend = Uptrend (Bullish)

RSI: (S&P 500) @66.10 = Overbought (Bearish)

MACD: Above zero line but even with its signal line (Neutral)

Daily Intraday Volatility: Low

Comment: The indexes had a slow but steady upward climb last week. It drove most traders crazy but the low volatility and lack of institutional buying keeps buy-and-hold investors calm. No one knows how long this manipulated market will keep going higher, but one day volatility will return again. The VIX is under 13 again, which reflects complacency and calmness. This can’t last forever.

Meanwhile, the Fed meets this week, and Powell will likely go out of his way to keep the good times coming. I doubt he’ll say anything to upset the market. Nevertheless, in the past, volatility has increased right after the Fed minutes are released on Wednesday.

After last week’s slow rally, the S&P 500 is overbought again, so a pullback would not be surprising. That being said, the algos are going to run the market as high as they can until something breaks.

Bottom line: It’s all about the Fed this week. Let’s see if volatility returns to the market, and whether Powell says anything besides, “I’ll do whatever it takes to keep Wall Street happy, and that means I will keep interest rates as low as possible as long as possible because I don’t want the stock market to plunge again.” (my quote but you get the idea).

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For daily results of multiple indicators, read Yardeni Research: https://goo.gl/eT3fzA

For insightful analysis of the stock market, read Lance Roberts:www.realinvestmentadvice.com

For insightful analysis of economic conditions, read Wolf Richter:www.wolfstreet.com


Here are the most recent market indicators:

S&P 500 is nearly even with its 200-day moving average = Neutral 

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

S&P 500 one-month trend = Uptrend (Bullish) but Stalled (Neutral)

RSI: (S&P 500) @49.35 = Neutral

MACD: Above zero line but below its signal line (Neutral)

Daily Intraday Volatility: Moderate

Comment: Last week the market finally hit resistance and pulled back. On Friday, the jobs numbers (20,000 new jobs vs 180,000 expected) was horrendous. In a “normal” market, the indexes would have plunged. Although there was a minor pullback at the Friday open, the indexes ended flat thanks to help from the algos, who once again saved the day. (It’s not easy going short in this environment!). Nevertheless, it was a negative week for the indexes.

This week should be interesting. On Sunday night, the indexes are slightly lower. Nevertheless, we will have to see if SPX (S&P 500) can pick itself from the basement (it has retreated back to it’s 200-day moving average) and rally in spite of all of the bad news swirling around.

On the other hand, this market is still overbought so a major plunge in the indexes would not be surprising. Because the Fed, the White House, and the go-go algos all want the market to go higher, it’s not easy to short aggressively. However, if the indexes fail to move above and stay above its 200-day moving average, a pullback is very possible, even a severe one.

Bottom line: Keep your powder dry as this market could go in either direction. Buyers are still on the sidelines (except for the algos). This standoff will be resolved one way or another, and until then, trade cautiously and take profits quickly.

_____________________________________________________

For daily results of multiple indicators, read Yardeni Research: https://goo.gl/eT3fzA

For insightful analysis of the stock market, read Lance Roberts:www.realinvestmentadvice.com

For insightful analysis of economic conditions, read Wolf Richter:www.wolfstreet.com


Here are the most recent market indicators:

S&P 500 is above its 200-day moving average = Bullish 

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

S&P 500 one-month trend = Uptrend (Bullish)

RSI: (S&P 500) @69.35 = Overbought (Bearish)

MACD: Above zero line but flattening = Neutral

Daily Intraday Volatility: Moderate

Comment: MACD is giving us a signal that the S&P 500 is getting tired and exhausted even as it climbed above SPX 2800. Futures are higher on Sunday night so it will be interesting to see how much higher (or lower) it can go. There are signs of exhaustion but it’s better to wait for confirmation. Volume has been low (buyers appear to be on strike), and the market remains overbought. One of these days there is going to be a major pullback, so be prepared. Enjoy the party while it lasts. It appears as if everyone has the same idea: wait for a major pullback and buy on the dip.

Bottom line: For the second or third week in a row: Wait and see what the market will do. The big question is how high it can go before reversing.

_____________________________________________________

For daily results of multiple indicators, read Yardeni Research: https://goo.gl/eT3fzA

For insightful analysis of the stock market, read Lance Roberts:www.realinvestmentadvice.com

For insightful analysis of economic conditions, read Wolf Richter:www.wolfstreet.com


Here are the most recent market indicators:

S&P 500 is above its 200-day moving average = Bullish 

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

S&P 500 one-month trend = Uptrend (Bullish)

RSI: (S&P 500) @69.70 = Overbought (Bearish)

MACD: Above zero line and moving higher = Bullish

Daily Intraday Volatility: Moderate

Comment: There isn’t a lot to add to what I wrote last week. The S&P 500 is creeping closer to 2800 while extremely overbought (RSI near 70). It is not wise to short a market in an uptrend even if it is overbought. All one can do is watch and wait to see how the market reacts during the week, and as it approaches SPX 2800.

Momentum day traders are making money chasing individual stocks on some days, but nearly everyone else appears to be in wait and see mode. The lack of buyers has kept volatility low while the machines chase after order flow. Meanwhile, bad news is swirling around but so far, the market has ignored it all.

Bottom line: Unless you’re a momentum day trader, watch to see how the market reacts at or near SPX 2800.

_____________________________________________________

For daily results of multiple indicators, read Yardeni Research: https://goo.gl/eT3fzA

For insightful analysis of the stock market, read Lance Roberts:www.realinvestmentadvice.com

For insightful analysis of economic conditions, read Wolf Richter:www.wolfstreet.com

Here are the most recent market indicators:

S&P 500 is above its 200-day moving average = Bullish 

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

S&P 500 one-month trend = Uptrend (Bullish)

RSI: (S&P 500) @69.01 = Overbought (Bearish)

MACD: Above zero line and moving higher = Bullish

Daily Intraday Volatility: Moderate

Comment: Last week, the indexes rose firmly above their 200-day moving averages. On Friday, even on low volume, the indexes pushed higher, with the Dow rising by over 400 points.

If you look at the technical indicators, all systems are “go”, i.e. it’s a strong uptrend. The only bad news is the market is getting overbought with the RSI near 70. Although the market has room to move higher, prepare for a major reversal within the next week or two, if not sooner. Enjoy the ride higher while it lasts, because a market moving higher on low volume will not last long. The only question is how severe the pullback will be.

Bottom line: The market is moving higher, it’s a strong uptrend, and the momentum traders are happy. However, because the market is in overbought territory on low volume, a pullback is imminent.

Hint: I’ve seen this pattern before. It’s likely the S&P 500 will test at or near 2800 before reversing. If the market blasts through 2800 on high volume, I’d be surprised but still cautious. Ride the momentum while it lasts and be prepared for a strong intraday reversal to the downside in the coming week or two.

_____________________________________________________

For daily results of multiple indicators, read Yardeni Research: https://goo.gl/eT3fzA

For insightful analysis of the stock market, read Lance Roberts:www.realinvestmentadvice.com

For insightful analysis of economic conditions, read Wolf Richter:www.wolfstreet.com