The Weekly Trader

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

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

S&P 500 one-month trend: There is no clear trend at this time. SPX retested 3,000 but failed to seal the deal on Friday.

RSI: (S&P 500) @ 54.93 = Neutral

MACD: At Zero Line and at Signal Line = Neutral

Daily Intraday Volatility: 14.25 = Low (Bearish)

Look at the awful charts of a few of the stocks I’ve been following: JNJ, NOW, COUP, AYX, WDAY, BA

Comment: I had been waiting for a failed rally all week and it came true on Friday. Many individual stocks got crushed as the day wore on, and even the indexes slowly succumbed to the selling pressure. Looking at the bigger picture, however, the indexes are holding up while certain stocks (look at the list above) are getting savaged.

As Lance Roberts wrote in his latest piece (link to his site at bottom), the bulls got everything they wanted, but they still couldn’t bring SPX above 3000 for long. According to Lance, here is the bull’s wish list (paraphrased), which has been fulfilled:

  1. ECB announced more QE
  2. Fed reduced capital requirements on banks
  3. Fed initiated QE of $60 billion in monthly Treasury purchases (but they are not calling it QE).
  4. The Fed is cutting rates.
  5. There are hints we could be exiting the China trade war
  6. Economic data is improving in the short term.

Even with all that help from the Fed, there is also a lot of negative news, as listed by Doug Kass (paraphrased):

  1. Untenable debt loads
  2. Unresolved trade war with China
  3. Global manufacturing recession is seeping into services sector
  4. Market structure is “frightening”
  5. We are in an earnings recession
  6. Valuations on traditional metrics are sky high (i.e. it’s bearish)
  7. Few expect the market to “undergo a meaningful drawdown”
  8. Private equity market crashing and burning
  9. WeWork’s problems are contagious

So there you have the bull and the bear case, which leaves us stuck in the middle again (surrounded by clowns and jokers, as the song says). The SPX rose above 3000 for a few minutes during the week before retreating, so if the bulls want to win this battle, they will have to find a way to move well above SPX 3000, and stay there.

The bears, on the other hand, have had multiple chances to take control, but they failed every time. The bulls are still in control and until proven otherwise, the ball is in their court. In fact, every time there was a meaningful selloff, the algos jumped in to either suppress volatility, or spike the market higher (or both).

That leaves us with this week, when we should have a better idea who will win. SPX must be watched closely to see if the bulls can finally rally the market for a final blow off top, or whether the bears can finally take control. Another worry for the bulls: a double top has formed on the SPX.

Bottom line: We could go either way this week, but the clues and indicators are still not clear enough to predict which direction. Just watch and react quickly when one side or the other takes control. Otherwise, we could continue with this tug of war for a while longer until someone is victorious.

Here is a link from Sven Henrich (Northman Trader), which includes an excellent video of the current state of the market: https://bit.ly/31Ct5Wg

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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


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

S&P 500 spurted above its 50-day MA = Bullish

S&P 500 one-month trend: SPX’s uptrend stalled at 3000, retreated, and is retesting 3000 again.

RSI: (S&P 500) @ 53.51 = Neutral

MACD: On Zero Line and at Signal Line = Neutral

Daily Intraday Volatility: 15.48 = On the Low Side

The trade I’m waiting for this week: Failed Rally

Comment: It might seem like a long time ago but last week started in the red, and by Friday we were off to the races again, coming near to SPX 3000. A positive tweet about China, a $60 billion a month Treasury “buying operation” from the Fed plus soothing words from Fed Speakers = a rip-your-face-off rally on Friday.

I have no idea how long these daily selloffs and rallies will continue, but it’s very unusual. One thing for sure: With all the stimulus (QE by any other name), positive tweets, and low interest rates, a year-end rally is possible. In fact, if there is not a year-end rally, it means things are worse than we realize.

Meanwhile, one of these days the market is going to fall off the cliff, and keep falling into a bear market, but until that day comes, it’s wise to stay nimble, and follow the market.

Bottom line: I am unable to determine, based on the clues and indicators, which direction the market will go this week. Once again, be ready for anything. I’m curious if the Friday rally continues into Monday or reverses direction. All the powers that be want a strong end of year rally. Don’t get caught on the wrong side of reality.

Here is an excellent analysis of the current market from Northman Trader: https://bit.ly/2VC1zqk

_____________________________________________________________

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


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

______________________________

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


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

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

S&P 500 one-month trend: SPX’s uptrend stalled at 3000 and retreated.

RSI: (S&P 500) @ 48.66 = Neutral

MACD: Above Zero Line and below Signal Line = Neutral

Daily Intraday Volatility: 17.22 = Low to Neutral

Comment: Last week, as expected, SPX rose above 3000, stalled, and reversed. The bragging of my investor friends, the extremely low VIX (13), and mixed economic news all combined to reverse the rally. And yet, there was no panic selling. We enter this week’s market at a standoff: The bulls were unable to push the markets above SPX 3000 for longer than a day. And the bears were unable to send SPX below its 50-day moving average. We can only sit and watch to see if one side is able to break above SPX 3000 or lower than SPX 2950.

The indicators above moved from bullish to mostly neutral as the indexes retreated last week. However, a number of individual stocks got slammed, including Roku and Netflix, to name only a few. It’s impossible to predict what is going to happen this week as we enter the typically volatile month of October.

Bottom line: Watch the indexes for clues and be prepared for any scenario. It’s impossible to predict market direction right now but that could change as the week progresses.

______________________________

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


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

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

S&P 500 one-month trend: SPX uptrend is somewhat intact but hitting resistance at all-time highs.

RSI: (S&P 500) @ 57.07 = Neutral

MACD: Above Zero Line and above Signal Line = Bullish

Daily Intraday Volatility: 13.35 = Extremely Low

Comment: These are some very interesting times. SPX hit all-time highs last week, and then retreated slightly. The bulls, with help from the algos, are going to work extremely hard to push the indexes higher this week. Because the algos are there to keep volatility low and the indexes high, shorting indexes has been a challenge.

However, just look at what’s happening to individual stocks! ROKU (-19.2% on Friday) and Netflix (-5% on Friday) got slaughtered last week, and there are many others. In fact, it’s been challenging to find stocks that are in an uptrend, which is a clue the bottom could fall out of this market in the near future.

Other clues include investors who are bragging to me about how much money they made in the market with indexes, and the VIX at 13.35. If the VIX goes much lower, there is going to be a snapback rally (i.e. if VIX rallies, stocks go down) that will blow your socks off. So be prepared.

Bottom line: The indexes are headed lower in the next few weeks, perhaps in a month. The only unknown is if there is another last gasp higher, or if we go directly lower. No one can answer that, so just be ready for either scenario. The next few weeks should be exciting as volatility explodes (it can’t stay at 13 forever).

Here is an article from portfolio manager Lance Roberts (realinvestmentadvice.com) that I recommend reading: https://bit.ly/2l095gT

______________________________

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