Bullish or Bearish? Week of November 9, 2020

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

One-month trend = Bullish. SPX rallied much higher last week, rising above all moving averages and retesting all time highs. SPX is spiking higher on Sunday night, wiping out traders who are heavily shorting the indexes. SPX is at 3509 on Sunday night, but the futures market is pointing to a 50 point rally at the open. 

Mid-term (50- and 100-day MA) = Bullish. The S&P 500 bounced back above its 50- and 100-day MA. 

RSI: (S&P 500) @ 60.03 (Daily) = Slightly Overbought. RSI went from oversold to overbought in one week. 

MACD = Bearish. MACD is at its zero line but pointing higher. It is also above its 9-day Signal Line

Daily Intraday Volatility (VIX): 24.86 = Lower. VIX plunged below its 200-day moving average, reflecting a lack of fear (unless you are shorting). 

Comment: As I repeatedly warned last week, this is a dangerous, unpredictable market. If you’re on the wrong side, you can get shredded. It was impossible to predict market direction last week. As it turned out, the market rallied all last week, and is expected to rally strongly on Monday at the open. 

I wish I could proclaim the bull market is back but the indexes have moved up too high and too fast, making it a very dangerous market. A reversal can occur at anytime, so trade at your own risk. Trade small if you participate. 

Bottom line: The market is going to rally strongly at the Monday morning open, with strong volume. Don’t dare short this market at first, although shorting opportunities will appear in the near future. In my opinion, it’s dangerous on both sides, so be careful if you are trading. 

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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.comEdit

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