Simpler Sentiment – Weekly Wrap-Up 3/17/17

The markets have pushed higher again this week, though mostly on a positive reaction to the Fed announcement. The Nasdaq 100 is on pace to put in a new record closing level, but overall volatility has again fallen near lows.

The S&P 500 is up a couple of points today to 2383. It is about 10 points higher on the week, most of which came on Wednesday after the Fed announcement. The Nasdaq 100 sits at 5418, which would be a new closing high, though just below Wednesday’s intraday high. The Russell 2000 sees the best gains on the week, up 25 points to 1390, but it remains well below the highs from the start of the month.

The VIX is down to 11, with the VXST – the 9-day Volatility Index – down at 9.32. There is much talk about just how low this is, but it is mainly a reflection of the lack of actual volatility, as the 20 day historical volatility is back below 6 percent.

Our traders came into the week mostly bullish, as reflected by our high Market Barometer reading of +7, and mostly remain that way.

Carolyn: I still have to consider myself a cautious BULL. The chat pattern is still bullish and the $SPX moving averages still support the bulls. I have to be cautious since we have an extended move and we are in a place where a correction could start at any time. We just have to be cautious and be prepared to ditch the long side if we start seeing any clear reversal signals against my weekly time price resistance where the last STALL occurred. We can watch the 5/13 ema combo on the daily chart. If the 5 breaks below the 13…then I’m backing off the buy side until further notice!

Tony: Don’t fade City Hall. With interest rates rising this week from historically low levels to historically low levels, where is the money supposed to go? Back into the stock market of course. This Fed induced bubble called Wall Street lives on. Next target $DJIA 22,000.

David: The S&P 500 continues to be in an uptrend in multiple timeframes. Most importantly, the trend up from last February appears incomplete, so there is no reason to think a major turn is at hand. While the move up from November may also be incomplete, it may be getting mature. When it finally runs out of steam we could see a pullback of about 5% or so. Very short-term patterns suggest even the move from November isn’t over yet, but after a pullback to the 2250-2300 range would be a much easier time to buy.

Tucker: The S&P 500 is up for the week, after the positive move following the Fed rate hike announcement on Wednesday. However, the momentum on the Simpler Trading Squeeze Indicator is very close to zero. I am looking for the S&P 500 to continue to be choppy with a slight bullish bias as long as it can continue to close above the Simpler Trading Voodoo Lines.

Tree Line of 2361.20. The semiconductor index, SOX, continues to be the strongest sector with the Squeeze firing long on Monday.

Doc: Although slowing a bit, the uptrend continues in the S&P. I can see few reasons to fight the move. Any pullbacks can be used to get on the train.

Next Week: JC’s Rapid Growth Webinar takes place on Thursday, March 23rd at 7PM Central.

Go here to join https://simplertrading.co/rapid-growth-webinar-sign-up

And finally, to prepare you for next week, here’s a few tips from the late Mark Douglas.

Probabilistic Mindset by Mark Douglas.
Chris McKhann

Chris McKhann

Chris McKhann has been involved professionally with the stock market for more than 15 years and specifically with derivatives for 12 of those. He started as a stock broker, but quickly moved on to options and futures trading. He spent some time as the Derivatives Product Manager for TD Ameritrade. He was the chief analyst and hedging strategist for OptionMonster. He has been an options trading educator and content provider for many years. His writing and analysis has been featured on Reuters, the Wall Street Journal, Forbes, TheStreet, CNBC and internationally. He has also designed and traded option and futures strategies for prop trading firms and hedge funds as well as managed accounts.