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: SPX is in a strong uptrend that appears unstoppable, but also unsustainable for the long term.

RSI: (S&P 500) @ 67.08 = SPX is still overbought. At over 70 RSI, it will be extremely overbought.

MACD: Above Zero Line and above Signal Line = Bullish

Daily Intraday Volatility: 12.63 = Low (Bearish)

Comment: The market meandered around last week with one big rally, which brought the indexes back to overbought. RSI is near 70, which is always a warning sign, and VIX remains in the basement.

The trade deal appears to be completed, but no one knows for sure. The market had a muted reaction to the news on Friday. By the way, the market also had a muted reaction to the Fed meeting (except for the one-day rally).

By any measure, the indexes are overbought, and that could continue through the holidays. Nevertheless, no one knows what is going to happen because we are in uncharted territory. I won’t even attempt to guess which direction the indexes are going this week. However, common sense tells me if you have extreme profits on any index or stock, it would not be a bad idea to take some money off the table. That being said, everyone is waiting for the “Santa Claus rally,” and the odds are good the market will not disappoint.

Bottom line: A Santa Claus rally is possible, even likely, but that does not reduce the increased risks as the market bubble expands. One day the market will have a date with reality, but we’re not there yet, but as I’ve repeatedly said, that day is coming (one day).

For a scathing opinion on the Fed’s actions regarding lower interest rates and QE, here is a fascinating read by Sven Henrich (Northman Trader). His seething anger at the Fed is evident as you keep reading: https://bit.ly/2El0QSC

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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 is above its 50-day MA = Bullish

S&P 500 one-month trend: SPX is in a strong uptrend that appears unstoppable, but also unsustainable for the long term.

RSI: (S&P 500) @ 63.98 = SPX is still overbought. At over 70 RSI, it will be extremely overbought.

MACD: Above Zero Line and above Signal Line = Bullish

Daily Intraday Volatility: 13.62 = Low (Bearish)

Comment: Last week, SPX sold off for two days, but then rebounded back by the end of the week, fueled by a blockbuster jobs report. RSI is still high but it is off its extreme highs, and VIX is still low but it is off its extreme low. Now that we’re almost back to where we started, all we can do is sit back and look for opportunities, if any.

The Sunday night futures are slightly lower, and aren’t telling us much. At this time, predicting what the market will do over the next week or two is a useless exercise. No one has a clue. The Fed has the market’s back so the odds are with a rally, but anything can happen, especially in the geopolitical world. My best advice is to take it day by day.

Bottom line: The indexes are still overbought but that could change in a heartbeat. Investors are enjoying the ride higher while traders sit and wait for a better risk reward.

For a trader’s perspective, read the following piece by Sven Henrich, Northman Trader, who makes a strong case for selling: https://bit.ly/2RxOrmc, and also this more detailed analysis: https://bit.ly/33YQthD

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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 is above its 50-day MA = Bullish

S&P 500 one-month trend: SPX is in a strong uptrend that appears unstoppable, but also unsustainable for the long term.

RSI: (S&P 500) @ 69.34 = SPX is overbought. At over 70 RSI, it will be extremely overbought.

MACD: Above Zero Line and above Signal Line = Bullish

Daily Intraday Volatility: 12.62 = Extremely Low (Bearish)

Comment: RSI went above 70 last week before pulling back slightly. The indexes are extremely overbought, and judging by the Sunday night futures, we could become more overbought.

The market is like a game of musical chairs and when the music stops, all hell is going to break loose. No one knows the time or place, or what will be the catalyst. However, if you believe in reality, then this market has a date with destiny sometime in the near future.

Veteran market watchers are in awe, and many have stopped warning others to be careful. At the moment, the market doesn’t care. Fueled by kind words from the Fed, additional quantitative easing, and low interest rates, the market seems unstoppable. And it is, until it isn’t.

Be cautious as we are in rarified air. This market is for short-term traders, long or short. Meanwhile, my article on blow-off tops was just published on MarketWatch: https://on.mktw.net/2OK343V

Bottom line: Stand back and observe. This market is one for the history books.

_____________________________________________________________

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 is in a strong uptrend that still seems unstoppable for the moment.

RSI: (S&P 500) @ 66.87 = SPX is still overbought. At over 70 RSI, it will be extremely overbought.

MACD: Above Zero Line and above Signal Line = Bullish

Daily Intraday Volatility: 12.34 = Extremely Low (Bearish)

Comment: This will be a shortened week (Thursday holiday and Friday markets close at 1:00 p.m. ET), so I’ll keep it short.

The indexes pulled back slightly during the week, relieving some of the pressure from a severely overbought market. Futures are up on Sunday night, so it’s possible the march higher will continue. As I’ve repeatedly said, shorting the indexes during an uptrend is not recommended.

In addition, I’ve determined that in this current environment, trading individual stocks is more profitable than trading indexes, but that obviously depends on your trading strategy. For me, there hasn’t been enough volatility to lure me back to the indexes, and until there is, I trade individual stocks. (I’d be happy to hear from anyone who is doing well trading indexes).

Speaking of indexes, index buy and holders are doing well by doing nothing but watching the indexes slowly climb higher. Of course, the buy and hold strategy will stop being profitable one day, but for now, index investors look pretty smart. This might continue through this week and beyond. No one knows.

Bottom line: Keep a close eye on the indexes and still be on the lookout for individual stocks (to buy or short).

Have a great Thanksgiving!

FYI: I have a new article coming out on MarketWatch later in the week. I’ll share the link on this space when it’s published.

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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 is above its 50-day MA = Bullish

S&P 500 one-month trend: SPX is in a strong uptrend that seems unstoppable at the moment.

RSI: (S&P 500) @ 74.11 = Extremely Overbought. SPX is in the danger zone, and although it can keep moving higher, caution is advised.

MACD: Above Zero Line and above Signal Line = Bullish

Daily Intraday Volatility: 12.05 = Extremely Low (Bearish)

Comment: It’s extremely rare to see such an overbought market. The indexes hit all-time highs on Friday with the Dow surpassing 28,000 for the first time ever. RSI is extremely overbought at 74.11, and although the indexes can still scream higher, a day of reckoning will come (eventually). Other sentiment warnings: The VIX is in the basement, and the Investors Intelligence sentiment survey (II) is at 57, near a screaming sell. It’s been many years since I’ve seen extreme sentiment numbers like these.

As I warned last week, it’s dangerous to short an uptrend, and that advice still stands. This market has all the makings of a blow-off top, so caution is still advised if trading the indexes.

There is still money to be made if trading individual stocks. The risk-reward of trading the indexes is poor, but there are still excellent opportunities, both bullish and bearish, with stocks.

Regarding the overall market, institutions are mostly on the sidelines with the algos (and the Fed’s QE) fueling the rally. It’s quite remarkable to see the market rising on low volume and low volatility. Buy and holders are delighted while anyone shorting the indexes (not recommended at this time) is pulling his or her hair out.

Where do we go from here? I’m watching in awe as the market gets more overbought, knowing we are experiencing a rare blow-off top. I’m watching RSI to see how high it can go, and am amazed it’s near 75 without any meaningful pullback. No one can predict how high the indexes will go but when it eventually reverses, it will be frightening.

Bottom line: Enjoy this rare market event while it lasts because this is one for the history books. Meanwhile, I recommend reading the following two articles, which will give you additional insights into the current market:

Sven Henrich (Northman Trader): https://bit.ly/2OknkYy

Lance Roberts (realinvestmentadvice.com): https://bit.ly/2KqpdSn

_____________________________________________________________

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