S&P 500 is above its 200-day moving average = Bullish
S&P 500 is above its 50-day moving average = Bullish
S&P 500 one-month trend: “V” Shaped Rally and Triple Top (one year) at Resistance. It could go in either direction but is hitting major resistance at all-time highs.
RSI: (S&P 500) @69.13 = Overbought
MACD: Above Zero Line and above Signal Line (Bullish)
Daily Intraday Volatility: 13.28 (Subdued). Volatility is in the basement, which will not last forever.
Comment: The shortened holiday week is disorientating, but now it’s back to business. The algos were able to keep volatility subdued last week, in fact, the VIX is ridiculously low once again. Also, RSI is in the overbought zone (over 70 is overbought). Investors are feeling giddy right now but I get the feeling there could be sand beneath their feet.
Although the market could squeak higher this week, with an overbought market, sky-high investor sentiment, and extremely low volatility, the odds are good we are headed lower. Sunday night futures aren’t telling us much (slightly lower), but do not be surprised if there is a selloff this week. It’s not a prediction, but based on the clues and indicators above, a selloff is likely. The real question is how fast it bounces back if I’m right.
Bottom line: The algos will try to keep the party going longer but the indicators and clues are pointing to trouble ahead. Be prepared for any scenario, and if you are shorting, do it AFTER the market breaks, not before. Look and see if the algos save the day once again. One thing for sure: Until investors feel true fear, the algos remain in control.
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