Mid-term: The S&P 500 continued to move higher, coming ever closer to the almighty 200-day moving average. This is another pivotal week. Can SPX surpass the 200-day (and stay above)? If it can, it’s bullish. If not, it’s bearish.
One-month trend = Bullish. SPX has worked hard, with the Fed’s help, to rally right below its 100 and 200-day moving averages. The economy is in shambles but the market spikes higher. Both can’t be right (more on this later).
RSI: (S&P 500) @ 58.29 = Neutral. The market could go in either direction this week.
MACD: MACD is above its zero line and even with its 9-day Signal Line = Neutral
Daily Intraday Volatility (VIX): 27.99 = Relatively High. Volatility remains elevated but much lower than a month ago. Volatile trading days are still expected.
Comment: Most people are shaking their head at last week’s market action. The unemployment rate and job losses were the worst since the Great Depression, and some economists say it’s even worse than you think. Meanwhile, the stock market rose back near its previous highs (Nasdaq already did).
As Lance Roberts says, either we have a depressionary economy or that things couldn’t be better, according to the stock market. Both can’t be right, and we should know soon who it is.
It’s no secret that the Fed has been pouring trillions into the stock market using a variety of methods. No one knows how long they will do that, and how long it will be successful. Common sense says reality will hit one of these days, but then again, logic has taken a vacation.
Bottom line: My gut feeling says the worst is coming, and reality will be arriving at the stock market near you. But with the Fed ready to pump up any selloff, anything is possible. Read the excellent blogs below for excellent discussions on the current stock market.
The following is a must-read interview with Larry McDonald, publisher of the “Bears Trap Report.” In summary, he says, buy silver and other commodities, and sell stocks: https://bit.ly/2zu2Dp3
Lance Roberts @ realinvestmentadvice.com on how a depressionary economy and rising stock market can’t both be right: https://bit.ly/2yBfR3D
Sven Henrich @ Northman Trader with an informative video discussion with three market gurus: https://bit.ly/3blIzmn
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