Here are the latest technical and sentiment indicators:
Technical Indicators (daily chart)
S&P 500 is above its 50-, 100-, and 200-day MA = Bullish
MACD (S&P 500; 19,39,9) is above the zero line = Bullish
MACD (S&P 500; 19,39,9) is even with its signal line = Neutral
S&P 500 support @ 2280
Sentiment Indicators (+RSI)
II survey: (Feb. 7): 62.7% Bulls; 16.7% Bears = Bearish
AAII survey: (Feb. 8): 35.8% Bulls; 27.7% Bears = Neutral
VIX: @ 10.85 = Bearish
RSI: (S&P 500) @ 69.32 = Bearish
Comment: There was little change in the indicators: in general, technical indicators are bullish while sentiment indicators (and RSI) are overbought. If this is a bubble, and I personally believe it is, the market can still go higher from here. Eventually, the market gets exhausted and reverses direction, or there is a catalyst that sends everyone to the exits. As I’ve repeatedly said, although no one can predict the arrival of the next correction, wise traders and investors are increasing cash positions. That’s how you survive corrections, bear markets, and crashes.
It was reported that Vanguard has $4 trillion in index ETF assets as investors flee managed mutual funds. Imagine what will happen to that money when the next bear market arrives, when everyone tries to get out at once. By the way, bear markets always arrive…eventually.
Note: I sometimes buy calls for short-term trades even though I believe the party will be ending one of these weeks or months.
Here are the latest technical and sentiment indicators:
Technical Indicators (daily chart)
S&P 500 is above its 50-, 100-, and 200-day MA = Bullish
MACD (S&P 500; 19,39,9) is above the zero line = Bullish
MACD (S&P 500; 19,39,9) is even with its signal line = Neutral
S&P 500 support @ 2277
Sentiment Indicators (+RSI)
II survey: (Jan. 31): 61.8% Bulls; 17.6% Bears = Bearish
AAII survey: (Feb. 1): 32.8% Bulls; 34.2% Bears = Neutral
VIX: @ 10.97 = Bearish
RSI: (S&P 500) @ 63.27 = Bearish
Comment: I’ve been re-reading a bestselling classic, “The Battle for Investment Survival,” by G.M. Loeb, a founding partner of E.F. Hutton. He says that to win the battle for investment survival, you must be willing to “hold funds uninvested while awaiting real opportunities.” I couldn’t agree more. With sentiment from financial advisors and financial media at all time highs, this is the time to increase cash positions. There is no doubt in my mind that a terrific pullback is coming, and having cash on the side will allow you to buy low. I certainly can’t predict when this correction will occur, but the odds have recently increased. Be patient, and be cautious. When this bubble starts to deflate, it will be an eye-opener for the masses.
Here are the latest technical and sentiment indicators:
Technical Indicators (daily chart)
S&P 500 is above its 50-, 100-, and 200-day MA = Bullish
MACD (S&P 500; 19,39,9) is above the zero line = Bullish
MACD (S&P 500; 19,39,9) is slightly below its signal line = Neutral
S&P 500 support @ 2269 and 2248
Sentiment Indicators (+RSI)
II survey: (Jan. 24): 58.2% Bulls; 17.5% Bears = Bearish
AAII survey: (Jan. 25): 31.6% Bulls; 33.5% Bears = Neutral
VIX: @ 10.58 = Bearish
RSI: (S&P 500) @ 64.32 = Bearish
Comment: We appear to be in bubble territory, so caution advised. That being said, market could still go higher. FYI: My latest MarketWatch column is here: goo.gl/0C2H7t
Here are the latest technical and sentiment indicators:
Technical Indicators (daily chart)
S&P 500 is above its 50-, 100-, and 200-day MA but flattened = Neutral
MACD (S&P 500; 19,39,9) is above the zero line = Bullish
MACD (S&P 500; 19,39,9) is slightly below its signal line = Neutral
S&P 500 support @ 2269 and 2248
Sentiment Indicators (+RSI)
II survey: (Jan. 17): 60.6% Bulls; 18.4% Bears = Bearish
AAII survey: (Jan. 18): 37% Bulls; 32.7% Bears = Neutral
VIX: @ 11.54 = Bearish
RSI: (S&P 500) @ 57.70 = Neutral
Comment: The indicators are mixed although the market is still overbought. The Investors Intelligence survey reflects excessive bullishness. For many investors, the fear of missing out is stronger than the fear of losing money. For weeks, the market has been in one of the tightest ranges in decades. Typically, this leads to a violent reaction in one direction or another. Since we don’t gamble, the best plan is to sit and wait for the market to make a move, and keep some cash on the side.
Here are the latest technical and sentiment indicators:
Technical Indicators (daily chart)
S&P 500 is above its 50-, 100-, and 200-day MA = Bullish
MACD (S&P 500; 19,39,9) is above the zero line = Bullish
MACD (S&P 500; 19,39,9) is even with its signal line = Neutral
S&P 500 support @ 2240, 2225, and 2200
Sentiment Indicators (+RSI)
II survey: (Jan. 10): 58.6% Bulls; 18.3% Bears = Bearish
AAII survey: (Jan. 11): 43.6% Bulls; 27.0% Bears = Neutral
VIX: @ 11.23 = Bearish
RSI: (S&P 500) @ 61.33 = Neutral
Comment: Market is in a holding pattern thanks to the computer algos which buy on every dip. We’re still overbought at nosebleed levels but until sentiment changes, nothing changes. CSX is the poster child for overbought: a railroad company rising like a 1999 Internet stock. No one can predict the date and time, but the market is way overdue for a nasty pullback. And if sentiment also changes, that pullback could be worse than expected.
Update: CSX is on a roller coaster ride. It sank after earnings were announced (-4%), but then rallied back the next day (+23%). FYI, it was a bull raid, a classic short squeeze.