Bullish or Bearish? Week of March 18, 2019


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

Bullish or Bearish? Week of March 11, 2019


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.

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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

Bullish or Bearish? Week of March 4, 2019


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.

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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

Bullish or Bearish? Week of Feb. 25, 2019


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.

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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

Bullish or Bearish? Week of Feb. 18, 2019

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.

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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

Bullish or Bearish? Week of Feb. 11, 2019

Here are the most recent market indicators:

S&P 500 is slightly below its 200-day moving average = Neutral 

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

S&P 500 one-month trend = Uptrend (with major resistance at 200-day MA)

RSI: (S&P 500) @60.52 = Slightly Overbought (Bearish)

MACD: Above zero line = Bullish

Daily Intraday Volatility: Moderate

Comment: I wrote a column for MarketWatch on the state of the current market: https://on.mktw.net/2RNeIJN

As I wrote in my column (above), this is another important week for the market. At the moment, the SPX is just under its 200-day moving average. It did rise above it for a couple of days last week but fell below it on Thursday and Friday. This is not a good sign, especially if SPX is unable to rise above resistance at its 200-day moving average.

As I wrote in my column, this is the time to take a wait-and-see approach (especially if you are trading indexes). Unless the market is able to break above resistance (at the 200-day MA), a strong pullback is likely. Nevertheless, instead of placing a bet before it makes its move, wait and see if an uptrend or downtrend develops. Then follow the winner.

Early Sunday night, futures are slightly lower, confirming that it’s going to take a lot of firepower for the bulls to run the market above its 200-day moving average.

Bottom line: It’s watch and wait time. In my opinion, the odds are to the downside because SPX failed to stay above its 200-day MA. Nevertheless, unexpected buyers could enter to push it higher, which is why I would wait before committing to one side or the other.

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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

Bullish or Bearish? Week of Feb. 4, 2019

Here are the most recent market indicators:

S&P 500 is slightly below its 200-day moving average = Neutral 

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

S&P 500 one-month trend = Uptrend (with major resistance at 200-day MA)

RSI: (S&P 500) @63.93 = Overbought (Bearish)

MACD: Above zero line = Bullish

Daily Intraday Volatility: Moderate

Comment: As you can see from the indicators above, it’s a mixed picture. The S&P 500 is overbought but the uptrend is strong.

This is a very important week. The S&P 500 rose last week, landing right below its 200-day moving average. It’s put up or shut up time for the market. If the indexes can rise above its 200-day moving averages, then the uptrend will continue and the indexes have room to move higher. If the indexes fail and reverse direction, the downside could be vicious. No one can predict right now what will happen at the 200-day moving average line, but it must be watched closely.

If the algos have their way, they will keep volatility low while the market moves slowly higher. That would be the worst scenario for bearish traders.

Bottom line: Instead of making bets before the market reaches the 200-day moving average, step back and watch what happens after it crosses over or under. Then follow the trend (easier said than done if volatility increases).

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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

Bullish or Bearish? Week of Jan. 28, 2019

Here are the most recent market indicators:

S&P 500 is below its 200-day moving average = Bearish 

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

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

RSI: (S&P 500) @59.92 = Slightly Overbought (Bearish)

Daily Intraday Volatility: Moderate

Comment: Last week, the market began on the wrong foot (lower) but during the rest of the week, at any sign of a selloff, the algos entered to rescue the market. Because of low volume and lack of enthusiasm, the rescue operation was successful, and the market ended nearly where it started.

The Fed has a meeting this week so that should increase volatility slightly. It’s unlikely the Fed will say anything to upset the market, so as long as volatility remains low, and with help from the algos, the odds are good the market will be flat to higher this week. Obviously, anything is possible, but Fed Chairman Powell appears willing to keep the party going a while longer (even though economic bad news is swirling around and coming closer).

Bottom line: Let’s see if volatility returns to the market. No can predict when it will return, except that it will again.

_____________________________________________________

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

Bullish or Bearish? Week of Jan. 21, 2019

Here are the most recent market indicators:

S&P 500 is below its 200-day moving average = Bearish 

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

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

RSI: (S&P 500) @61.98 = Overbought (Bearish)

Daily Intraday Volatility: Moderate to High 

Comment: The market fooled nearly everyone by ripping higher for the last two weeks with help from the algos. Nevertheless, volume was light and the bad news swirling around was ignored. It was quite a performance, and short-sellers felt the pain. We are now reaching overbought levels which means that a shorting opportunity is drawing closer.

That being said, never short a market in a strong uptrend (like now). Wait for an intraday reversal or other clues before attempting to short (or buy puts or inverse ETFs).

Futures are lower on Sunday night so we’ll have to wait and see what this market is made of. If the bulls are right, we’ll keep moving higher for the next few days. But the odds are good that within the next week or so, a major shorting opportunity will appear. After all, at the rate the market is rising, unless you believe the indexes can rise by 150% a year, a pullback is coming.

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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

Bullish or Bearish? Week of Jan. 14, 2019

Here are the most recent market indicators:

S&P 500 is below its 200-day moving average = Bearish 

S&P 500 one-month trend = Major Pivot Points

RSI: (S&P 500) @53.52 = Neutral to Slightly Overbought

Daily Intraday Volatility: Moderate to High 

Comment: With help from the algos and kind words from Chairman Powell, last week the market bounced back from last month’s low and is now in overbought territory.

This is a very pivotal week for the market. This week will help us determine if last week’s rally is the real deal or another manufactured, and unsustainable, head fake. Although the market is short-term overbought, it could get more overbought this week and move beyond SPX 2600. It could also move sideways in a low volatile environment, which is exactly what the financial world wants. Those are the best case scenarios.

In a worst-case scenario, the market will once again fail to surpass SPX 2600, and begin to retreat. If SPX reverses direction and plunges hard, bringing the other indexes along for the ride, that will confirm we are in a bear market. (Note: Sunday night futures are lower, so Monday could be volatile. Nevertheless, it’s the rest of the week that matters.)

There is a lot of bad news swirling around but the market ignored it recently, at least so far. Soon, earnings will be released and if many companies disappoint, reality will once again hit the market like a 2×4 across the face.

No one can predict how the market will react this week, but one thing is for sure: No one agrees what is going to happen. Therefore, avoid guessing and let the market be your guide. Another piece of advice: be sure to have a healthy amount of cash on the side in case of a worst-case scenario.

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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