S&P 500 is above its 200-day moving average = Bullish
S&P 500 is equal to its 50-day moving average = Neutral
S&P 500 one-month trend: SPX fell back to its 50-day moving average = SPY hit all-time highs and reversed direction.
RSI: (S&P 500) @39 = Oversold
MACD: Above Zero Line but below Signal Line and pointing lower (Neutral to Bearish)
Daily Intraday Volatility: 17.61 (Neutral). Volatility spiked last week, as expected. It was in the basement for far too long.
Comment: If you’ve been following my blog for the last few weeks, you know that last week’s pullback was expected. With RSI so high, the VIX so low, sentiment so bullish, and SPX at all-time highs, a pullback was bound to happen, and it did. Wall Street wasn’t pleased with the quarter point cut, nor was the President, who fueled the downside with additional tariff threats against China.
As I wrote several weeks ago, there are signs we are in or headed towards a recession. There are so many warning signs and indicators it’s hard to keep track. At the moment, the only positive sign is that consumers are still buying, and job losses are minimal. Keep an eye out for clues, because if there are layoffs, it will confirm what many other indicators are reflecting.
Because we went down so hard and fast last week, a bounce is expected this week, but it may not last long. We are coming into the volatile months of September and October with a confused Fed, trade wars, overall nervousness, and near all-time highs in the stock market. A lot could go wrong.
What to do? Let me pass the baton to Lance Roberts’ latest piece, which gives excellent advice plus sobering statistics. Here is his latest: https://bit.ly/31g6FtT
In addition, read Wolf Richter’s latest (click on link below) for a frightening look at heavy truck sale orders (they have plunged by 81%).
Bottom line: Expect a more volatile few weeks and months as nervous investors hope for the best in a very difficult market environment. After a 11-year bull market, does anyone really expect it to continue indefinitely? Those who have never experienced a bear market are going to get a wakeup call and many lessons. Knowing investors the way I do, they won’t be selling their favorite stocks anytime soon no matter how low the market goes.
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