Bullish or Bearish? Week of April 11, 2022

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This is what the technical indicators are telling us this week

Short-term trend (DAILY CHART) – LOWER. SPX fell back last week, retreating from 4545 to 4488, a 57-point pullback. SPX is slightly above its 50-day moving average on the daily chart, which is a positive in the short term. FUTURES are slightly lower on Sunday night, but that could change in the morning. 

NOTE: On the daily chart, the 50-day MA has crossed below the 200-day, another name for the Death Cross. So far this has not been significant, but we are watching it closely.

Long-term trend (WEEKLY CHART) – HIGHER. On the weekly chart, SPX remains above its moving averages. This longer-term chart is telling us SPX is still consolidating with no clue as to its future direction.

MACD (WEEKLY) = FLAT. The WEEKLY MACD is still “walking” the line (the zero line) with no hint as to which direction it plans to go.

RSI: (S&P 500) @51.45 (DAILY) NEUTRAL.  RSI on the DAILY chart is neutral after the selloff last week. SPX is neither overbought or oversold.

Daily Intraday Volatility (VIX) = 21.26 = NEUTRAL: Option traders are calm, as reflected in the low VIX. Fear has taken a holiday for now.

Comment: I wish I had more insights but the markets are calm and volatility is on the low side. Although SPX and the other indexes fell last week, it went from slightly overbought to neutral. At this time, the indicators are not giving strong signals in either direction.

This could be the calm before the storm, or it could just be calm. There is a lot of negative news swirling about, especially inflation and rising interest rates, but the market’s attitude is “What me, worry?” That’s a negative.

On the other hand, the indexes are generally ignoring the bad news. That’s a positive.

Bottom line: Stay the course. Traders will be hard-pressed to find many trading opportunities, at least until volatility returns.

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