Mid-term: The S&P 500 started off with a bang last week and is now right below its 200-day moving average = Bullish.
One-month trend = Sideways. SPX has slowly climbed higher during the month = Bullish.
RSI: (S&P 500) @ 57.74 = Mildly overbought.
MACD: MACD is above its zero line and even with its 9-day Signal Line = Neutral
Daily Intraday Volatility (VIX): 28.16 = Elevated but falling = Neutral.
Comment: It’s a four-day week after the Memorial Day holiday. It’s a tale of two countries, and two tapes. On one hand, the country is nervous over the high number of virus deaths, and millions are in economic pain. The country is struggling to get back to “normal.”
On the other hand, the stock market acts as if everything is fine. Futures are up strongly on Monday night. Apparently, the bulls are going to make a play for the S&P 500’s 200-day moving average, and they might get their wish.
It’s impossible to predict what is going to happen this week so I will leave it to the professionals to give their take. I admit I have no idea which direction we’re going, but the bulls seem to be in control for now. I do know that only one entitiy can be right: either the stock market is signaling that all is well, or the economy is telling us things are dire.
Bottom line: Be patient during these strange times. Trade less when uncertain.
I turn to Lance Roberts, Wolf Richter, and Sven Henrich for their excellent analysis:
Lance Roberts @ realinvestmentadvice.com on how the market is “stuck in the middle.”: https://bit.ly/2LZd4Ec
Sven Henrich @ Northman Trader on how the market is oblivious to reality, and another Straight Talk video: https://bit.ly/2zvBbYr
Wolf Richter @ wolf street.com on the Hertz bankruptcy and other economic warning signs: https://bit.ly/3d4B0lv
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