This is what the technical indicators are telling us this week:
One-month trend = Neutral. SPX is above its 200-day MA but has moved sideways. Note: SPX is at 3271 on Sunday night, slightly higher from a week ago. The 200-day is at 3048. If SPX falls below 3000, there will be trouble.
Mid-term (50 and 100-day MA) = Bullish. The S&P 500 is above its 50- and 100-day MA.
RSI: (S&P 500) @ 61.03= Slightly overbought
MACD = Neutral. MACD is above its zero line and and even with its 9-day Signal Line.
Daily Intraday Volatility (VIX): 24.46 = Neutral. VIX still hasn’t moved much in the last week, thanks to the volatility-killing algos.
Comment: Futures are flat on Sunday night. Although the indexes managed to squeak out a small gain last week, fueled by positive earnings from Apple and Amazon, beneath the surface there is trouble brewing.
The market is moving ever so slowly, and is relying on a few favorite stocks to keep the market going. It may seem like the market is moving higher, but in reality it’s gone nowhere for weeks. It is going sideways, not higher.
This means that one unexpected piece of bad news could send the market plunging. In reality, there has been so much bad financial news it’s hard to keep up, but the institutions still aren’t selling. When they do one day, all hell will break loose. Until then, however, be very very careful.
Unless you already owned shares of Apple and Amazon, it was a difficult week (and also unless you were able to buy call options on Kodak before the big announcement. In the old days, “front-running” was illegal). Many investors are doing well, but traders are struggling to catch a strong trend. It’s extremely difficult to sell short, but I’m sure that will change in the future.
Bottom line: I’m waiting for reality to catch up with the market, and when it does, it will not be a pretty sight. Until then, I patiently wait.
Here is a detailed analysis of the current stock market from Lance Roberts and Sven Henrich:
Lance Roberts @ realinvestmentadvice.com smartly keeps his hedges in place as the market gets more insane: https://bit.ly/2PgrXn9
Sven Henrich @Northman Trader correctly exposes this ridiculous market and tells the truth. Be sure to see his video: https://bit.ly/2PgUglo
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