Bullish or Bearish? Week of Oct. 14, 2019

S&P 500 is above its 200-day moving average = Bullish  

S&P 500 spurted above its 50-day MA = Bullish

S&P 500 one-month trend: SPX’s uptrend stalled at 3000, retreated, and is retesting 3000 again.

RSI: (S&P 500) @ 53.51 = Neutral

MACD: On Zero Line and at Signal Line = Neutral

Daily Intraday Volatility: 15.48 = On the Low Side

The trade I’m waiting for this week: Failed Rally

Comment: It might seem like a long time ago but last week started in the red, and by Friday we were off to the races again, coming near to SPX 3000. A positive tweet about China, a $60 billion a month Treasury “buying operation” from the Fed plus soothing words from Fed Speakers = a rip-your-face-off rally on Friday.

I have no idea how long these daily selloffs and rallies will continue, but it’s very unusual. One thing for sure: With all the stimulus (QE by any other name), positive tweets, and low interest rates, a year-end rally is possible. In fact, if there is not a year-end rally, it means things are worse than we realize.

Meanwhile, one of these days the market is going to fall off the cliff, and keep falling into a bear market, but until that day comes, it’s wise to stay nimble, and follow the market.

Bottom line: I am unable to determine, based on the clues and indicators, which direction the market will go this week. Once again, be ready for anything. I’m curious if the Friday rally continues into Monday or reverses direction. All the powers that be want a strong end of year rally. Don’t get caught on the wrong side of reality.

Here is an excellent analysis of the current market from Northman Trader: https://bit.ly/2VC1zqk

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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:www.wolfstreet.com


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