Bullish or Bearish? Week of October 31, 2016

Here are the latest technical and sentiment indicators:

Technical Indicators (daily chart)

S&P 500 is below its 50-day and 100-day moving averages = Bearish

MACD (S&P 500; 19,39,9) is well below the zero line = Bearish

MACD (S&P 500; 19,39,9) is slightly below its signal line = Bearish

S&P 500 is below support @ 2,130 = Bearish (2,077 is 200-day MA and next support level)

 

Sentiment Indicators

II survey: (Oct. 25) 47.1% Bulls; 23.1% Bears = Neutral

AAII survey: (Oct. 26): 24.8% Bulls; 34.1% Bears = Neutral

VIX: @ 16.19 = Neutral

RSI: (S&P 500) @ 41.05 = Neutral

Comment: As expected, the indexes took a turn for the worse last week. Most rallies failed and support levels were breached. The market is vulnerable but like a trapped animal, it could lash out in either direction. Because volatility is weak, it’s remains a dangerous trading environment. Keep your eye on the struggling bond market, which may provide fireworks in the near future. 

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