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
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 up but hitting resistance at all-time highs.
RSI: (S&P 500) @ 61.93 = Slightly Overbought
MACD: Above Zero Line and above Signal Line = Bullish
Daily Intraday Volatility: 13.74 = Low
Comment: This is one of those rare times when the indicators above are screaming bullish but the sentiment indicators are screaming, “Be careful!” If you look at the chart, everything looks wonderful with a few potential problems:
- We are hitting resistance at all-time highs in SPX (3007), and twice in the past, the indexes retreated at these levels.
- The drone attack on the Saudi oil processing facility is causing havoc on oil around the world. Futures are lower Sunday night, which should continue into the open. However, the buy-on-the-dip algos will be buying at the open to attempt to calm volatility.
- Most concerning of all is investor sentiment. From my conversations with investors, they are pleased with their portfolios, their profits have increased beyond their wildest expectations, they will “never” sell no matter how low the indexes go, and they are now strong believers in buy-and-hold. With the markets at all time highs and investor sentiment so complacent with a belief the markets can only go higher, I see a major break in the near future. Investors are relying on the Fed to save them from any downturns. To me, this is similar to what happened when bitcoin hit $20,000 before collapsing. Bitcoin investors were also buying at the top. If anything goes wrong with the bullish scenario in the stock market, all hell is going to break loose.
To give you a different perspectives (although slanting to the “be cautious” side) are the following two must-read columns. They go into much deeper detail than I have.
Bottom line: The indicators are flashing “Go Go Go” but the sentiment and resistance levels are flashing “Watch out below!” Let’s see if the Fed can once again prop up the market (Fed meeting on Tuesday and Wednesday). I agree with Sven, who says that investors are “playing with fire.”
Here are the two articles that I recommend reading:
Sven Henrich (Northman Trader): https://bit.ly/2lP4C0G
Avi Gilburt using Elliott Wave (Seeking Alpha): https://bit.ly/2kKHlN5
______________________________
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 last week on low volume = Neutral
S&P 500 one-month trend: SPX uptrend is still broken but indexes are making a run for all-time highs at SPX 3000.
RSI: (S&P 500) @ 58.33 = Slightly Overbought
MACD: Slightly Above Zero Line and strongly above Signal Line = Neutral
Daily Intraday Volatility: 15.03 = Neutral. Volatility is on the low side.
Comment: After a poor start early in the week, the algos got their mojo back and ran the market higher on low volume, bringing the SPX back above its 50-day moving average. We are very close to our all-time highs so it’s going to get interesting. In addition, the Fed will have their FOMC meeting in a week (Sept. 17 and 18), which almost always attracts volatility. Soon we will learn whether the latest rally to all-time highs is the real deal or a head fake. Everyone will be listening closely to the Fed chairman’s words.
There are signs of a slowdown in manufacturing, car sales, and house sales, and yet the market moves higher. Volatility has been suppressed and most investors are complacent about the market (“It goes up and down, what can you do?”).
I’m taking a wait-and-see approach as the market is rallying on light volume and numerous warning signs. With the Fed ready to speak about lowering interest rates, if they please Wall Street, the market could rally to SPX 3000. If the Fed disappoints, then we could fall to SPX 2800 or lower.
Bottom line: It’s all about the Fed for the next two weeks, so be cautious. It’s not a bad time to increase cash during these turbulent times (it doesn’t mean sell everything), or to diversify into less-risky investments.
For a more detailed analysis of technical and economic indicators, I will refer you below to two excellent columns from market technician Sven Henrich (Northman Trader), and money manager Lance Roberts (realinvestmentadvice.com). Both are excellent reads.
Northman Trader: https://bit.ly/2k6BSjk
Lance Roberts: https://bit.ly/2lFvVdA
______________________________
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