Bullish or Bearish? Week of Sept. 12, 2016

To summarize, here are the technical and sentiment indicators from Friday’s close: 

Technical indicators

S&P 500 is below its 50-day moving average and pointing down = Bearish

MACD (S&P 500; 19,39,9) is above the zero line but pointing down = Neutral

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

S&P 500 support is 2,120 (100-day moving average), 2,050, and 2,000 (i.e. 10% correction). 

Sentiment indicators

II survey: (Sept. 6) 52.5% Bulls; 22.8% Bears = Bearish

AAII survey: (Sept. 7): 29.8% Bulls; 28.5% Bears = Neutral

VIX: @ 17.50 = Neutral

RSI: (S&P 500) @ 31.94 = Oversold

Comment: What a difference a day makes! It’s too early to proclaim a trend change as this could be only a one-day pullback. I used some cash to probe the market with SPY put options. I’m looking for clues, i.e. if volatility continues to spike, if there is an intraday reversal, and if market continues to sell off at end of day. Prepare to go long if selloff is extreme. 

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