Bullish or Bearish? Week of April 3, 2017

Here are the latest technical and sentiment indicators:

Technical Indicators (daily chart)

S&P 500 is hovering above its 50-day MA (S&P 2339) = Neutral

MACD (S&P 500; 19,39,9) is above the zero line but pointing down = Neutral

MACD (S&P 500; 19,39,9) is below its signal line = Bearish

S&P 500 support @ 2339 (50-day moving average), and 2317.


Sentiment Indicators (+RSI)

II survey: (March 28): 49.5% Bulls; 18.1% Bears = Bearish

AAII survey: (March 29): 30.2% Bulls; 37.4% Bears = Neutral

VIX: @ 12.37 = Bearish

RSI: (S&P 500) @ 53.68 = Neutral

Comment: On Monday, the S&P 500 bounced off of its 50-day moving average, but remained above it all week. That tells me it will take a lot more momentum to bring this market down. So far, there is little fear, although sentiment did take a slight turn to the cautious side in the II and AAII surveys (above). In fact, in the AAII survey, for the first time in a long time, bearish sentiment is higher than the bull side (it’s not significant yet unless it hits extreme levels).

Recently, I’ve heard predictions ranging from S&P 2500 on the high end to 2250 on the low end. The market hasn’t committed to one side or the other, so anything  is possible. As always, only the market is right which is why I  suggest being ready for either scenario. It’s possible the lengthy uptrend is coming to an end, which is why the market is only slightly above its 50-day moving average. On the other hand, there could be one final blowoff rally that could be the final bull market top. Put another way, it’s a 50-50 bet which way the market is going, and I don’t bet. One thing is for certain: No one knows for sure what is going to happen this week, so making big bets now is unwise. However, look for intraday reversals or a sudden pickup in volatility. That would be significant. 

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