The Weekly Trader

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

One-month trend = Bullish. SPX is well above its 200-day MA and is in an uptrend. Note: SPX is at 3372 on Sunday night, higher from a week ago. The 200-day is at 3065. 

Mid-term (50 and 100-day MA) = Bullish. The S&P 500 is well above its 50- and 100-day MA. 

RSI: (S&P 500) @ 67.27= Overbought. A few more points higher and we’re in the danger zone. 

MACD = Neutral. MACD is above its zero line and and still even with its 9-day Signal Line. 

Daily Intraday Volatility (VIX): 22.05 = Danger Zone. VIX is still getting crushed by the volatility-killing algos. VIX fell below its 200-day moving average, which tells me there is no fear. Not good.

Comments: Futures are slightly higher on Sunday night as the indexes slowly keep climbing. Although the SPX and the other indexes are overbought, as you may know, markets can remain overbought for long time periods.

Buy and hold investors with index funds are the most pleased with this low volume, volatility-suppressed market. I’m guessing the markets will keep edging higher until the election. There’s a lack of buyers except for the Fed, it appears.

You can go along for the ride but be careful, because one day this bubble will pop. No one knows when, unfortunately. The higher we go, the more convinced most investors believe the market “will never go down,” and if it does, they believe, it will bounce back. I’ve seen this story before, but this one takes the cake.

As long as volatility is suppressed, the market can keep climbing. Any hint of a selloff is met with a strong reaction by the algos, so shorting the indexes at this time is not recommended.

There isn’t a lot to say except to be patient, and wait for better opportunities. The odds are good the market will continue in this direction a while longer, so be prepared for some very boring times (if you are a trader).

Obviously, that could change at any time if investors get spooked for whatever reason. For now, however, try not to fall asleep! Investors are pleased with this environment, and that’s fine. Anyone selling options is also pleased. Traders, however, must wait for better opportunities.

Meanwhile, Lance Roberts and Sven Henrich will try to make sense of this very unusual market with their latest blogs:

Lance Roberts @ realinvestmentadvice.com says the bulls still didn’t reach all-time highs: https://bit.ly/321pQK7

Sven Henrich @ NorthmanTrader tells the truth about this market in a radio interview: https://bit.ly/31ZqI1S

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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

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

One-month trend = Bullish. SPX broke out of its sideways pattern and is well above its 200-day MA. Note: SPX is at 3351 on Sunday night, higher from a week ago. The 200-day is at 3056.

Mid-term (50 and 100-day MA) = Bullish. The S&P 500 is well above its 50- and 100-day MA. 

RSI: (S&P 500) @ 68.90= Overbought. A few more points higher and we’re in the danger zone.

MACD = Neutral. MACD is above its zero line and and still even with its 9-day Signal Line. 

Daily Intraday Volatility (VIX): 22.21 = Danger Zone. VIX got crushed last week thanks to the volatility-killing algos. VIX fell below its 200-day moving average, which tells me there is no fear. That’s not good.

Comment: This is really something to see. The overbought market has gotten more overbought. The RSI and VIX are flashing warning signs, so be prepared for a sudden reversal in the near future.

Ask any stock market veteran: They’ve never seen anything like this. I have my suspicions about what is happening, but the facts are that volatility has gotten crushed since March. That means buy and hold investors are celebrating while many speculators are sitting on the sidelines, waiting for better opportunities.

The economic and virus news continues to be dreadful as the market comes close to hitting all time highs. Either the economy is not really in bad shape or the stock market is lying. But the stock market and economy can’t both be right. Something has to give…eventually.

Bottom line: I’m speechless. I’m on the sidelines waiting for better trading opportunities.

Meanwhile, Lance Roberts will try to make sense of this very unusual market with his latest blog entry:

Lance Roberts @ realinvestmentadvice.com says the bulls have a very loud megaphone: https://bit.ly/3ivkcql

__________________________________________________________

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 = Neutral. SPX is above its 200-day MA but has moved sideways. Note: SPX is at 3271 on Sunday night, slightly higher from a week ago. The 200-day is at 3048. If SPX falls below 3000, there will be trouble. 

Mid-term (50 and 100-day MA) = Bullish. The S&P 500 is above its 50- and 100-day MA. 

RSI: (S&P 500) @ 61.03= Slightly overbought

MACD = Neutral. MACD is above its zero line and and even with its 9-day Signal Line. 

Daily Intraday Volatility (VIX): 24.46 = Neutral. VIX still hasn’t moved much in the last week, thanks to the volatility-killing algos.

Comment: Futures are flat on Sunday night. Although the indexes managed to squeak out a small gain last week, fueled by positive earnings from Apple and Amazon, beneath the surface there is trouble brewing.

The market is moving ever so slowly, and is relying on a few favorite stocks to keep the market going. It may seem like the market is moving higher, but in reality it’s gone nowhere for weeks. It is going sideways, not higher.

This means that one unexpected piece of bad news could send the market plunging. In reality, there has been so much bad financial news it’s hard to keep up, but the institutions still aren’t selling. When they do one day, all hell will break loose. Until then, however, be very very careful.

Unless you already owned shares of Apple and Amazon, it was a difficult week (and also unless you were able to buy call options on Kodak before the big announcement. In the old days, “front-running” was illegal). Many investors are doing well, but traders are struggling to catch a strong trend. It’s extremely difficult to sell short, but I’m sure that will change in the future.

Bottom line: I’m waiting for reality to catch up with the market, and when it does, it will not be a pretty sight. Until then, I patiently wait.

Here is a detailed analysis of the current stock market from Lance Roberts and Sven Henrich: 

Lance Roberts @ realinvestmentadvice.com smartly keeps his hedges in place as the market gets more insane: https://bit.ly/2PgrXn9

Sven Henrich @Northman Trader correctly exposes this ridiculous market and tells the truth. Be sure to see his video: https://bit.ly/2PgUglo

__________________________________________________________

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 = Neutral. SPX is above its 200-day MA but the uptrend stalled over the last two days. Note: SPX is at 3215 on Sunday night, slightly lower from a week ago. The 200-day is at 3041. If SPX falls below 3000, there could be trouble.

Mid-term (50 and 100-day MA) = Bullish. The S&P 500 is above its 50- and 100-day MA. 

RSI: (S&P 500) @ 56.45= Neutral.

MACD = Neutral. MACD is above its zero line and and even with its 9-day Signal Line. 

Daily Intraday Volatility (VIX): 25.84 = Neutral. VIX didn’t move much in the last week. 

Comment: On Sunday night, futures are slightly higher but it’s best to wait until the morning to confirm. Last week, the market started off flat to high, but then fell on Thursday and Friday. The Fed is meeting on Tuesday and Wednesday, and traditionally, the market moves higher on the day of the announcement (but these are strange times, so anything is possible).

I hate to keep repeating myself but the financial news keeps getting worse while the market hangs on for dear life. You may have noticed that gold, and bitcoin, have broken out recently. Traders run to gold when there are economic problems. In addition, keep watching the dollar, which has been in a downtrend. People smarter than me believe that could change.

In addition to worsening economic news, the virus keeps spreading, the economic stimulus package has stalled, and the unemployment rate is too high. On the other hand, White House economic advisor Larry Kudlow appeared on TV and promised there would be a “V” shaped recovery.

Once again, let me turn it over to the professional analysts, who have done an excellent job of evaluating the current market. Wolf Richter (below) wrote a series of devastating articles on how the economy, and housing, is worsening.

In addition, here is a detailed analysis of the current stock market from Lance Roberts and Sven Henrich:

Lance Roberts @ realinvestmentadvice.com writes about “The Cobra Effect.” Must reading: https://bit.ly/32SbcXE

Sven Henrich @Northman Trader says this is the biggest financial bubble ever. Be sure to see his video: https://bit.ly/2CPC6on

__________________________________________________________

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 = Neutral. Once again, the algos have pushed the indexes above its 200-day MA, where it has remained in a sideways pattern. Note: SPX is at 3224 on Sunday night, slightly higher from a week ago. The 200-day is at 3033.

Mid-term (50 and 100-day MA) = Bullish. The S&P 500 is above its 50- and 100-day MA. 

RSI: (S&P 500) @ 61.24 = Neutral. Slightly overbought

MACD = Neutral. MACD is above its zero line and and even with its 9-day Signal Line. 

Daily Intraday Volatility (VIX): 25.68 = Neutral. VIX didn’t move much in the last week. 

Comment: If this feels like the movie, Groundhog Day, you are right. The indexes moved slightly higher from last week but otherwise, everything has remained the same: The virus is ravaging the country, the economy is in trouble, and the futures are mixed on Sunday night, moving from slightly higher to slightly lower.

Last week, there was one interesting difference. The so-called technical leaders like Microsoft and Netflix failed to rally, and in fact, fell rather sharply. When the technology leaders that brought you to the dance fail to perform, that is a potential clue of a rotation. It’s too early to say the rotation will continue but it needs to be watched.

In other words, based on Bear Market 101, when overbought technology stocks start to falter, and traders look for less popular stocks to chase, it’s a possible topping out clue. I believe technicians call it a “distribution top.” We should find out if they are right this week.

I’m still in awe that with all of the bad news swirling around, the market continues to inch higher. I know the party is going to end fairly soon, and everyone else seems to know it too. And yet, no one is selling because of one reason: Everyone believes they can get out in time.

Read the analysis from Lance Roberts and Sven Henrich below, as well as Wolf Richter, who do an excellent job of analyzing what’s really going on in the market and real economy.

My advice is to be careful out there. Eventually, reality and the market will meet, and only one can be right.

Here is an detailed analysis of the current market by two professionals: 

Lance Roberts @ realinvestmentadvice.com cleverly points out the bull market continues, that is, a bull market in viruses: https://bit.ly/3eIZm4u

Sven Henrich @Northman Trader raises doubts about the so-called “V” shaped recovery: https://bit.ly/399Dn5x

__________________________________________________________

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