Mid-term: The S&P 500 had a lackluster week, unable to rise above its 200-day moving average. Unless something changes this week, it’s still a bear market (by my definition). Futures are higher on Sunday night so maybe the bulls can push it to SPX 3000.
One-month trend = Sideways. SPX has worked hard but has gone nowhere in the last month. It’s either going to break out or break down.
RSI: (S&P 500) @ 52.71 = 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): 31.89 = Relatively High. Volatility remains elevated but much lower than a month ago. Volatile trading days are still expected.
Comment: I wish I had something exciting to say but I don’t. Jerome Powell gave a harsh assessment of the economy on Thursday, and the market sold off quickly. On Sunday night he backtracked and said things are looking brighter. Which is it?
As Lance Roberts said last week, either the economy is right and we’re in deep trouble, or the stock market is right and the worst is over. But both the stock market and economy can’t be right.
The market has been drifting sideways for nearly a month with low volume and lack of institutional participation. We can continue drifting for a while longer until the market either plunges or rallies. No one can predict which, so the best strategy is sit and wait for the next trend.
Bottom line: It appears as if the economy is getting worse while the stock market keeps climbing. Unusual is an understatement. If trading, be patient and don’t try to force trades. Sometimes the best trade is not trading at all. Let’s hope we get some clarity this week.
Here are two additional and more detailed analysis of the current market:
Lance Roberts @ realinvestmentadvice.com sees a seasonal sell signal: https://bit.ly/36f5wqf
Sven Henrich @ Northman Trader with a Straight Talk video on the current market: https://bit.ly/3g0Et6n
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