The Weekly Trader


Here are the most recent market indicators:

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

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

S&P 500 one-month trend = Uptrend (Bullish)

RSI: (S&P 500) @69.35 = Overbought (Bearish)

MACD: Above zero line but flattening = Neutral

Daily Intraday Volatility: Moderate

Comment: MACD is giving us a signal that the S&P 500 is getting tired and exhausted even as it climbed above SPX 2800. Futures are higher on Sunday night so it will be interesting to see how much higher (or lower) it can go. There are signs of exhaustion but it’s better to wait for confirmation. Volume has been low (buyers appear to be on strike), and the market remains overbought. One of these days there is going to be a major pullback, so be prepared. Enjoy the party while it lasts. It appears as if everyone has the same idea: wait for a major pullback and buy on the dip.

Bottom line: For the second or third week in a row: Wait and see what the market will do. The big question is how high it can go before reversing.

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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


Here are the most recent market indicators:

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

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

S&P 500 one-month trend = Uptrend (Bullish)

RSI: (S&P 500) @69.70 = Overbought (Bearish)

MACD: Above zero line and moving higher = Bullish

Daily Intraday Volatility: Moderate

Comment: There isn’t a lot to add to what I wrote last week. The S&P 500 is creeping closer to 2800 while extremely overbought (RSI near 70). It is not wise to short a market in an uptrend even if it is overbought. All one can do is watch and wait to see how the market reacts during the week, and as it approaches SPX 2800.

Momentum day traders are making money chasing individual stocks on some days, but nearly everyone else appears to be in wait and see mode. The lack of buyers has kept volatility low while the machines chase after order flow. Meanwhile, bad news is swirling around but so far, the market has ignored it all.

Bottom line: Unless you’re a momentum day trader, watch to see how the market reacts at or near SPX 2800.

_____________________________________________________

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

Here are the most recent market indicators:

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

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

S&P 500 one-month trend = Uptrend (Bullish)

RSI: (S&P 500) @69.01 = Overbought (Bearish)

MACD: Above zero line and moving higher = Bullish

Daily Intraday Volatility: Moderate

Comment: Last week, the indexes rose firmly above their 200-day moving averages. On Friday, even on low volume, the indexes pushed higher, with the Dow rising by over 400 points.

If you look at the technical indicators, all systems are “go”, i.e. it’s a strong uptrend. The only bad news is the market is getting overbought with the RSI near 70. Although the market has room to move higher, prepare for a major reversal within the next week or two, if not sooner. Enjoy the ride higher while it lasts, because a market moving higher on low volume will not last long. The only question is how severe the pullback will be.

Bottom line: The market is moving higher, it’s a strong uptrend, and the momentum traders are happy. However, because the market is in overbought territory on low volume, a pullback is imminent.

Hint: I’ve seen this pattern before. It’s likely the S&P 500 will test at or near 2800 before reversing. If the market blasts through 2800 on high volume, I’d be surprised but still cautious. Ride the momentum while it lasts and be prepared for a strong intraday reversal to the downside in the coming week or two.

_____________________________________________________

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

Here are the most recent market indicators:

S&P 500 is slightly below its 200-day moving average = Neutral 

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

S&P 500 one-month trend = Uptrend (with major resistance at 200-day MA)

RSI: (S&P 500) @60.52 = Slightly Overbought (Bearish)

MACD: Above zero line = Bullish

Daily Intraday Volatility: Moderate

Comment: I wrote a column for MarketWatch on the state of the current market: https://on.mktw.net/2RNeIJN

As I wrote in my column (above), this is another important week for the market. At the moment, the SPX is just under its 200-day moving average. It did rise above it for a couple of days last week but fell below it on Thursday and Friday. This is not a good sign, especially if SPX is unable to rise above resistance at its 200-day moving average.

As I wrote in my column, this is the time to take a wait-and-see approach (especially if you are trading indexes). Unless the market is able to break above resistance (at the 200-day MA), a strong pullback is likely. Nevertheless, instead of placing a bet before it makes its move, wait and see if an uptrend or downtrend develops. Then follow the winner.

Early Sunday night, futures are slightly lower, confirming that it’s going to take a lot of firepower for the bulls to run the market above its 200-day moving average.

Bottom line: It’s watch and wait time. In my opinion, the odds are to the downside because SPX failed to stay above its 200-day MA. Nevertheless, unexpected buyers could enter to push it higher, which is why I would wait before committing to one side or the other.

_____________________________________________________

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

Here are the most recent market indicators:

S&P 500 is slightly below its 200-day moving average = Neutral 

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

S&P 500 one-month trend = Uptrend (with major resistance at 200-day MA)

RSI: (S&P 500) @63.93 = Overbought (Bearish)

MACD: Above zero line = Bullish

Daily Intraday Volatility: Moderate

Comment: As you can see from the indicators above, it’s a mixed picture. The S&P 500 is overbought but the uptrend is strong.

This is a very important week. The S&P 500 rose last week, landing right below its 200-day moving average. It’s put up or shut up time for the market. If the indexes can rise above its 200-day moving averages, then the uptrend will continue and the indexes have room to move higher. If the indexes fail and reverse direction, the downside could be vicious. No one can predict right now what will happen at the 200-day moving average line, but it must be watched closely.

If the algos have their way, they will keep volatility low while the market moves slowly higher. That would be the worst scenario for bearish traders.

Bottom line: Instead of making bets before the market reaches the 200-day moving average, step back and watch what happens after it crosses over or under. Then follow the trend (easier said than done if volatility increases).

_____________________________________________________

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