S&P 500 is above its 200-day moving average = Bullish
S&P 500 is above its 50-day MA = Bullish
S&P 500 one-month trend: SPX is still in a strong uptrend that is unsustainable for the long term.
RSI: (S&P 500) @ 76.57 = SPX is extremely overbought. It could go higher, but the clock is ticking.
MACD: Above Zero Line and slightly above Signal Line = Neutral to Bullish
Daily Intraday Volatility: 12.10 = Extremely Low (Bearish). Volatility has taken a temporary vacation.
Comment: RSI is telling us we’re extremely overbought, and although we could get more overbought this week, or next, a pullback is imminent. Everywhere you turn, investors are not only bullish about the future, but euphoric. Common sense has been thrown out the window as nearly everyone has high hopes for the stock market. Bears are in hiding, and the bulls are feeling invincible. The longer the market rises, the more extreme the greed, and the more dangerous it becomes.
You can’t short the indexes right now (too dangerous), but if you are a trader, you can make short-term bullish day trades, which works well on certain days. However, one day we’re going to wake up to a massive pullback, although I admit that predicting that day is impossible.
I’m in awe of the excessive bullishness (thanks primarily to the Fed) with cheerleading coming from many different quarters. You have to reach far back in history to duplicate this current environment. No, you don’t sell everything in a panic, but you try to be realistic while trimming where you can.
Bottom line: Anything is possible this week. The algos have successfully killed volatility, which is another reason the market is slowly melting up. However, let me be clear: There are flashing red warning signs. The stock market is playing a game of musical chairs and one day the music is going to stop.
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