Charting the S&P 500: Record Territory, But Is the Market Too Complacent?
It was close but we’ll give credit to the S&P 500 for a follow-through week. Price action was moderately positive though volume was down severely.
This had the makings of a potentially big week but every time it looked like a breakout the bulls were shy about it. That’s fine, this coming week could provide the impetus for a solid breakout.
The only problem we see is the lack of volatility; the VIX is dangerously low right here and screaming a sell. Remember, this is just a condition and not a signal, but with the fear index being on the lows of the year, complacency is very high.
The indicators for the S&P are bullish. The MACD has a confirmed signal, money flow has been exploding upward, while the parabolic SAR (stop and reverse system) is back on a buy signal. What could go wrong? Not much, but more backing and filling of gaps from prior days, which is normal activity.
This is where the dip buyers get active and look for an opportunity to swoop in for a buy. Look for erratic price moves though as we close out the last two weeks of August.
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