Bullish or Bearish? Week of Oct. 7, 2019

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

S&P 500 is slightly above its 50-day MA = Neutral

S&P 500 one-month trend: SPX’s uptrend stalled at 3000 and retreated, and is now attempting to retest.

RSI: (S&P 500) @ 49.21 = Neutral

MACD: Above Zero Line and below Signal Line = Neutral

Daily Intraday Volatility: 17.04 = Neutral

Comment: As I pointed out last week, the VIX couldn’t remain at 13 forever, and sure enough, we had a vicious two-day selloff during the week followed by a head-turning two-day rally. Unfortunately, there was a lot of bad economic news around the world that appears to be spreading to the U.S. For now, the market chose to focus on lower interest rates rather than deteriorating economic conditions.

Once again, it’s anyone’s guess which way the market will go this week. Neither the bulls or the bears have made a strong case. It’s a treacherous environment for investors and traders (the intraday reversals can cause havoc with your stop losses). On one hand, it appears as if the SPX uptrend has stalled out at 3000 (with a triple top, I might add). On the other hand, there hasn’t been mass selling by institutions, so the bears have been unable to take control. If anything, we’re in this weird no-man’s land where no one wins, and almost everyone loses.

Bottom line: Until the trend is established, staying away from the indexes is a wise choice. There are still opportunities with individual stocks, but be careful. Many stock holders have woken up to vicious 20 percent plunges (i.e. Roku, Netflix, to name a few).

For a technical view of the current market, I recommend the following post from Northman Trader: https://bit.ly/2AMxWZI

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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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