WHAT THE INDICATORS ARE SAYING
This is what the technical indicators are telling us this week:
One-week trend = FLAT. The bears tried to take over early in the week but failed once again. SPX fell from 4697 to 4682, a mild 15-point pullback. SPX is still near its all-time highs. Futures are flat on Sunday night but that could change in the morning.
SPX 20-day moving average (WEEKLY): HIGHER. SPX is above its 20-day moving average and is still in an uptrend.
RSI: (S&P 500) @71.01 (WEEKLY) OVERBOUGHT = RSI is telling us that SPX is overbought. Although SPX and the other indexes pulled back a little last week, the indexes are firmly in overbought territory.
MACD (WEEKLY) = BULLISH: MACD is above the zero line (bullish) and slightly above its 9-day signal line. The slope of MACD is pointing higher, a bullish sign.
Daily Intraday Volatility (VIX) = 16.29 = No worries on Wall Street as VIX remains in the basement.
Comment: Although the indexes are overbought and the bears are still in hiding, we’re coming closer to the holidays. No one can predict if we’ll get a Santa Claus rally but it’s possible. Anything is possible, even a blow-off top. It’s still too risky to short this market no matter how overbought it is.
With the indexes so overbought, the Bad New Bears had a chance to take over early in the week, but they couldn’t finish the job. (Are there any shorts left?)
At this point, the market seems to have stalled out and few are expecting any fireworks as we get closer to the holidays. I also know from experience that sometimes when you least expect it, the market can come up and bite you. This could be one of those times. After all, no one is expecting anything out of the ordinary until next year. That’s the consensus. However, the market is an independent entity that does what it wants when it wants.
Bottom line: No one knows anything so wait and watch. It feels quiet out there, maybe too quiet.
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’ latest newsletter:www.realinvestmentadvice.com
For insightful analysis of economic conditions, read Wolf Richter: https://wolfstreet.com