Mid-term: S&P 500 is still below its 200-day moving average = Bearish. The longer it remains below its 200-day MA, the more bearish it is for the market. Nevertheless, SPX did make it to its 50-day moving average, so it’s best to stand back and see how high (or low) it can go this week.
One-month trend = Bullish. SPX has worked hard, with the Fed’s help, to rally back to its 50-day moving average. Let’s see if it’s a bear market rally (most likely) or a continuation of the bull market (unlikely).
RSI: (S&P 500) @ 55.01 = Neutral. The market could go in either direction this week. The Fed is meeting on Tuesday and Wednesday, so anything is possible.
MACD: MACD is even with its zero line and even with its 9-day Signal Line) = Neutral
Daily Intraday Volatility (VIX): 35.93 = Relatively High. Volatility remains elevated. Expect volatile trading days.
Comment: The Fed meets this week so there should a number of crosscurrents. The market has made a brave attempt to rally back to its 200-day moving average (SPX 3007). With the Fed throwing gobs of money at the stock market, anything is possible.
However, the bad news keeps piling up. Unemployment is at all-time highs, the virus is still swirling around, most businesses are closed, the economy is in shambles, and most people are still hunkered down in their homes.
Maybe the Fed can pull a rabbit out of a hat and convince people that all is well, but I have my doubts. Unless there is a vaccine or some other good virus news, the bears could take control. However, the Fed will do anything possible to keep the market levitated.
Bottom line: Expect a tug-of-war this week between the bulls and the bears.
The two pieces below are brilliantly written. Sven Henrich approaches the market from a technical perspective, while Lance Roberts discusses the fundamental case (with some technical analysis). Be sure to watch the videos in the Henrich blog. Highly recommended:
Sven Henrich @ Northman Trader on the current market environment. He is leaning bearish: https://bit.ly/2Ya47iK
Lance Roberts @ realinvestmentadvice.com on whether the bear market is over: https://bit.ly/2KB6Vxx
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