May 9, 2017

Weekly analysis of the stock market on the S & P500 on Wall Street.

Another boring week on the SP500. It only had a movement of 12 points closing almost at 2400.
The SP500 remained totally indifferent to the FOMC meeting in which interest rates were not raised, nor did it react to the employment report. This gave a much better result than expected, down from 4.5% in March to 4.4% in April being the lowest reading since May 2001, but even so after the publication the SP500 only rose 8 points.
Luckily we have had earnings reports from large companies to be able to give a little excitement to the week such as Tesla (TSLA), Apple (AAPL), Facebook (FB), among others.

Daily SP500

In the chart of the daily SP500 we see how after leaving the triangle it heads towards 2400, where it meets resistance, which is apart from a historical maximum. While a 31 point move is expected next week, the SP500 will need to get enough power to be able to overcome this resistance.
Speaking of energy, below we see 3 charts of the SP500 (monthly, weekly and daily), in which I use an indicator precisely to see the energy that the current trend has.

SP500 monthly, weekly and daily

The Fractal Energy or Choppiness Index indicator measures the energy of the main trend.
In the monthly chart we see that the uptrend is already out of energy and looking for a break. In the weekly chart it also shows that it is without power and is taking a break (we see how the SP500 is oscillating after reaching 2400).
And also in the daily chart it indicates that it still has a little energy left but it is decreasing, which is very likely that it will not give it to overcome the 2400 level.

This is why I say that the SP500 will need a good excuse from where to draw energy to overcome the resistance.

On the other hand, the volume traded in the week was above average.

As for volatility, it is at its all-time lows, the VIX closes the week at 10.5.

The sector that we have been following is the financial one, which together with the bond could produce a fall or a rise.
As we can see, neither has been decided yet, although the bond is falling, the fall is not strong enough to lift the SP500.

Financial sector Bond

As a highlight for next week, the first half earnings reports continue throughout the week, and the IPC will be released on Friday at 8:30 am ET

In short, the SP500 in the short term is in a lateral movement, which faces an all-time high to overcome if it breaks up. We suspect that it won't be easy for you to get over it, as the SP500 is out of stock. It would most likely keep moving laterally.

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