The Weekly Trader

This is what the technical indicators are telling us this week: 

One-month trend = Neutral to Bullish. SPX is well above its 200-day MA, a bullish signal, but the rally stalled last week after making all-time highs. SPX closed at 3483.81 at the close on Friday. Note: SPX futures are higher on Sunday night. Let’s see if the bulls can take control.

Mid-term (50- and 100-day MA) = Neutral to Bullish. The S&P 500 is still above its 50-day MA. So far, it has remained above.

RSI: (S&P 500) @ 58.64 (Daily) = Slightly Overbought. RSI fell back a little. It is overbought but not at extreme levels.

MACD = Bullish. MACD is above its zero line and is above its 9-day Signal Line. MACD came out of the doldrums and is pointing to a more bullish scenario.

Daily Intraday Volatility (VIX): 27.41 = Low. VIX is still below its 200-day moving average, indicating that volatility is low, and that fear is still missing.

Comment: These are strange times and a strange market. Market veterans complained that they’ve never seen anything like it. Some have suggested there is an invisible hand (i.e. algos backed by the Fed) that is keeping the market propped up. I don’t have evidence of that but admittedly, the market refuses to fall for very long even as the economy shows signs of despair.

All bets are off when it comes to predicting what is going to happen two weeks before an election. I won’t even try. The facts: SPX is slightly higher on Sunday night. That means the odds are a little better than even that we will rally at the open. If we don’t, that would be significant. Oh, there are rumors of a stimulus deal. Perhaps that is raising hopes, but I follow the market, not the news.

Bottom line: It’s not easy following the trend two weeks before an election!

Here is a more detailed analysis about the market from Lance Roberts: 

Lance Roberts @ realinvestmentadvice.com wrote how the market stumbled last week on the failed stimulus talks. (This week could be a different story): https://bit.ly/3o7m24m

__________________________________________________________

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: https://wolfstreet.com

This is what the technical indicators are telling us this week: 

One-month trend = Bullish. SPX moved well above its 200-day MA, a bullish signal. Although the trend was broken a week ago, SPX reversed direction and is making a play for all time highs.

Mid-term (50- and 100-day MA) = Bullish. The S&P 500 made a strong move above its 50-day MA. We are watching to see if it can remain above. Note: SPX 50-day MA is at 3380 on Sunday night (20 points higher than last week). Futures are slightly lower (on Sunday night).

RSI: (S&P 500) @ 60.72 (Daily) = Slightly Overbought. RSI has risen in the last week but is not at extreme levels (yet).

MACD = Bullish. MACD is slightly above its zero line and is above its 9-day Signal Line. 

Daily Intraday Volatility (VIX): 25 = Low. VIX is below its 200-day moving average, indicating that volatility is low, and that fear is nowhere to be seen.

Comments: A week ago, the indexes were struggling, the uptrend was broken, and there was a real risk the market was going to plunge. And just like that, SPX and the other indexes rallied back above their 50-day moving averages, and the all-time highs are within reach.

It goes to show how difficult it is to make predictions about the market.

The reasons people give for the rally are all over the map. To me, all that matters is that the market rallied. Now we need to see if this was a temporary blip or the real deal. Monday is a Federal holiday but the market is open, so it’s possible volume will be light.

The closer we get to the election, the more difficult it will be to make predictions. I also believe volatility will increase from now until the election, and so far I have been right.

Bottom line: Look for opportunities to go long when possible, but be prepared for some violent selloffs at times. It’s not an easy trading environment.

Here is a more detailed analysis about the market from Lance Roberts:

Lance Roberts @ realinvestmentadvice.com explains why the market rallied last week: https://bit.ly/30SfRqE

__________________________________________________________

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: https://wolfstreet.com

This is what the technical indicators are telling us this week: 

One-month trend = Broken and still damaged. SPX is above its 200-day MA (bullish) but the uptrend remains broken (bearish). On Sunday night, the major index futures are higher. 

Mid-term (50- and 100-day MA) = Bearish. The S&P 500 climbed out of the basement last week but is still below its 50-day MA. It tried hard but failed to rise above its 50-day. Note: SPX 50-day MA is at 3361 on Sunday night.

RSI: (S&P 500) @ 49.68 (Daily) = Neutral. RSI rose slightly in the last week.

MACD = Neutral. MACD is slightly below its zero line but rose slightly above its 9-day Signal Line. 

Daily Intraday Volatility (VIX): 27.63 = Neutral. VIX rose slightly during the week. It is even with its 200-day moving average.

Comments: The indexes made a valiant attempt to rally above their 50-day moving averages, and although they tried hard, they failed to move above. It was a rather wild week, with strong rallies at the open, and several that failed. Technology stocks struggled during the week.

As market observers, all we can do is look at the clues and indicators and make educated decisions what to do. I follow the market rather than try to guess its direction. Admittedly, it’s difficult to follow a market like this, i.e. a market that is not trending.

These are dangerous times, and it’s easy to get on the wrong side of a trend. When the market is this unstable, staying on the sidelines is often a wise move. The other choice is day trading, but take profits fast. Hint: I have found that counter-trend day trades are working, but you have to be nimble.

Bottom line: Most institutions are not buying, but most are also not selling. The algos are pushing the market higher during the day, but the rallies often do not last. These are strange and dangerous times, so trade cautiously.

Extra: SPX is at the bottom of the Darvis box. If SPX fails to rally this week, and falls lower, it can get ugly, and fast. Be on your toes. If you follow the Nicholas Darvis strategy, you will not go long the indexes.

Here are comments from market analyst Lance Roberts:

Lance Roberts @ realinvestmentadvice.com questions whether the bounce last week will last: https://bit.ly/30x2mfX

__________________________________________________________

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: https://wolfstreet.com

This is what the technical indicators are telling us this week: 

One-month trend = Broken and hurt but prepared to recover. SPX is above its 200-day MA (bullish) but the uptrend is still broken (bearish). Note: SPX closed at 3298 at the close on Friday, lower from a week ago, and below its 50-day MA, which is at 3350. On Sunday night, the major index futures are slightly higher.

Mid-term (50- and 100-day MA) = Bearish. The S&P 500 is still below its 50-day MA but is making a recovery attempt. Let’s see if the indexes can fight their way above the 50-day, and stay there. 

RSI: (S&P 500) @ 44.62 (Daily) = Slightly oversold. The RSI hardly moved in the last week. There was some institutional selling during the week. 

MACD = Slightly Bearish. MACD is slightly below its zero line and has dropped below its 9-day Signal Line. 

Daily Intraday Volatility (VIX): 26.38 = Neutral. VIX is slightly below its 200-day moving average, which tells me there is little fear. 

Comments: The indexes were in serious trouble last week until a strong save on Friday. Although the SPX is still below its 50-day moving average, it will make an attempt to regain its former glory. You can count on it. The key is whether the expected rally will be successful. It is essential you pay close attention to the rally. As most traders know, you always learn more from rallies than selloffs.

The indexes are still slightly damaged from a slow selloff that has lasted several weeks. And yet, the wimpy bears have not fully taken control. That is why I am certain the bulls will do whatever they can to bring the indexes well above their 50-day moving averages this week.

This is a watch and see week. No one knows who has the upper hand yet. I believe we are transitioning from a bull to a bear market, but I can’t prove it, and even if I’m right, this transition takes time. Be patient, and try not to get caught on the wrong side of a strong trend. As you know, on some days it’s been pretty wild.

Bottom line: Don’t feel compelled to trade everyday. During volatile days like last week, sometimes it’s best to move to the sidelines and wait for better opportunities.

Lance Roberts @ realinvestmentadvice.com suggests you are prepared for both an overdone selloff (short-term) and a deeper correction (medium-term): https://bit.ly/3cE2RJK

__________________________________________________________

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

This is what the technical indicators are telling us this week: 

One-month trend = Broken and Bearish. SPX is above its 200-day MA but the broken uptrend has not recovered yet. Note: SPX closed at 3319 at the close on Friday, lower from a week ago, and below its 50-day MA, which is at 3342. On Sunday night, all the major index futures are flat, but that could change in the morning.

Mid-term (50- and 100-day MA) = Bearish. The S&P 500 fell below its 50-day MA last week. Let’s see if the indexes can fight their way above the 50-day, and stay there.

RSI: (S&P 500) @ 42.74 (Daily) = Slightly oversold. The RSI hardly moved in the last week. There was some institutional selling during the week.

MACD = Neutral to Bearish. MACD is barely above its zero line and has dropped below its 9-day Signal Line. 

Daily Intraday Volatility (VIX): 25.83 = Neutral. VIX is slightly below its 200-day moving average, which tells me there is still little fear.

Comments: The market played out just as we anticipated last week with an attempt to rally on the Fed meeting days. But on the other days, the bulls were holding on for dear life. The market has definitely taken a turn for the worse, with a big caveat.

The bulls need to take control this week or it could be a slippery slope downward. As usual, no one can predict the future, but I can tell you last week was brutal, especially for the FAANG stocks, including crowd favorites Amazon and Apple.

If you study market history, you know when the market leaders fall, that often signals the end of a bull market. I’m not saying we’re there yet, but watch the leaders closely over the next few weeks and months to see how they act.

Bottom line: The market has turned treacherous with a lot of twists and turns waiting to confuse and distract unsuspecting bulls and bears.

Below is further market analysis by Lance Roberts:

Lance Roberts @ realinvestmentadvice.com says the correction may continue as the election looms, so take steps to reduce risk (good advice): https://bit.ly/3cflAv4

__________________________________________________________

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