Market Indicators (as of March 31)

Each weekend, I will list signals from the most popular market indicators. *

(A full list of the major indicators with signals can be found in my book, All About Market Indicators (McGraw-Hill).) I’m also the author of Understanding Options (McGraw-Hill), Understanding Stocks (McGraw-Hill), and Start Day Trading Now (Adams Media).

AAII survey (3/27/2013)

38.4% bullish. 28.7% bearish.

Sell signal: Over 60% bullish.

Buy signal: Over 50% bearish.

 

Investor’s Intelligence (3/27/2013):

49.5% bullish. 19.6% bearish.

Sell signal: Over 50% bullish.

Buy signal: Over 50% bearish.

 

CBOE Put/Call Ratio: .62

Sell signal: Lower than .75 is a sell.

Buy signal: Higher than 1.0 is a buy (more puts are being bought)

 

VIX: 12.70

Sell signal: Lower than 12.

Buy signal: Over 40.

 

Moving Averages: S&P 500 above all three moving averages

 

Sell signal: Index crosses below 50-, 100-, or 200-day MA.

Buy signal: Index crosses over MA.

 

MACD: MACD: MACD is well above the zero line and is now even with the red 9-day signal line. (Note: I’m using the settings, 19,39,9, recommended by Gerald Appel, MACD’s creator.)

 

Sell signal: MACD line (black line) crosses below zero line. MACD line crosses below 9-day (red or gray) signal line.

Buy Signal: MACD line crosses above zero line. MACD line crosses above 9-day signal line.

 

Comment: Market indicators still bullish with a few potential warning signals (Sentiment indicators, VIX, and Put/Call ratio). This market has defied expectations and negative news — and frustrated the bears. Cautiously optimistic is the right attitude in this market. I wouldn’t want to be a buy and holder, and yet there are few signs the good times will end anytime soon. But it could. One day the market may actually react to all of the bad news, especially coming from Europe. Will it affect us? No one seems to know…yet. 

Followup: Lumber Liquidators (NYSE: LL) continues to outperform. Amy Smith fromInvestor’s Business Daily will give her new stock selections later this week. 

* Note: These signals are not actionable trades, but only guidelines. Always use other indicators, and your own research, to confirm before buying or selling.

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