Bullish or Bearish? Week of May 31, 2021


This is what the technical indicators are telling us this week: 

One-month trend = The bulls took control: SPX rose by a healthy 48 points last week, rising from 4155 to 4203. This is a bullish development. The only question is if the momentum can be sustained. Futures are flat on Monday night.

Mid-term (50- and 100-day MA) = Bullish: SPX and the other indexes are well above their 50- and 100-day moving averages as the bulls run with the ball.

RSI: (S&P 500) @68.61 (WEEKLY) = Overbought. RSI is saying that SPX is overbought. At 70 or higher, it will reach extreme overbought levels.

MACD (WEEKLY) = Mixed Signals. MACD is above its zero line but equal to its 9-day Signal Line. MACD is still not giving a clear signal at this time. 

Daily Intraday Volatility (VIX): 16.76 = VIX is ridiculously low, and could go lower.

Barchart Stock Evaluator for SPY and QQQ (link below): SPY is an 96 percent buy, while QQQ is a 72 percent buy (according to this indicator). Both are strong buys after a spectacular performance last week.

Comment: The bears keep huffing and puffing, and complaining, but the market defies logic and keeps moving higher. The trend is up for now but as readers of this blog know, that could change quickly. That is why it’s essential to be prepared for anything. It is also wise to have a diversified portfolio, i.e. don’t bet everything on one stock or other security.

It’s a four-day week and there isn’t much to say except let’s watch and see if the uptrend continues. The bears had a chance to take control two weeks ago but fumbled once again. And now the bulls are in control, along with their friends, the algos.

Bottom line: Wait for the market to make its move and then follow.

Note: I have a column coming out on MarketWatch this week, one that is worth reading.


Stock evaluation program from Barchart: https://bit.ly/3v9Nj9G 

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: https://wolfstreet.com

I will notify you of my posts via twitter@michaelsincere

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