Some deeply mixed signals have arisen in the last week. The basic chart of $SPX remains in its frustrating trading range, while breadth and put-call ratios generate mixed signals. However, $VIX has broken out to the upside, and that has generated some usually reliable sell signals.SPX continues to remain within the bounds of the March price range -- support at 2322 on the downside and ultimate resistance at 2400 (the all-time highs) on the upside.
Stocks (as measured by the $SPX Index) have had plenty of chances to collapse or to rally to new highs. Instead they have done neither, frustrating both bulls and bears.
Stocks (as measured by $SPX) made their highs on the first of March and have been struggling to regain that level ever since. Last week's breakdown beneath what appeared to be important support at 2350 generated enough selling that, this past Monday, $SPX opened down nearly 20 points and seemed primed to head lower. But buyers stepped in at 2322, and it's been nothing but up, up and away ever since. So that level represents important support now.
The stock market has finally broken a support level, in terms of the Standard & Poors 500 Index ($SPX). When $SPX traded below 2350 on Tuesday, it led to a fairly severe down day. This turns the short-term picture negative. The next support level is at 2300.
Equity-only put-call ratios are quite bearish. They will remain bearish as long as they continue to trend higher.
The stock market, as measured by the Standard & Poors 500 Index ($SPX) rather quietly bottomed a week ago and has moved steadily higher over the ensuing week. Thus, the $SPX chart remains bullish with support at 2350 level.
Things are beginning to deteriorate, somewhat in terms of price, but mostly in terms of our indicators. We've seen this scenario before, though -- most recently in late December, but the market response was subdued and volatility remained low. That combination resulted in a move to higher prices after December, and it could well be that the same is setting up now.
Overall, stocks had another very strong week, although there was certainly some hesitation yesterday. Even so, the trend remains upward for now. $SPX has moved steadily higher in a stair-step fashion all during the month of February. As a result, there are several support levels of interest. The highest is that in the 2350 - 2370 range, and below that is more important support at 2300.
Stocks have continued to move higher across all of the major averages. As might be expected after an advance of this magnitude and length, overbought conditions continue to abound.
One of the foremost things to consider, though, is that the chart of $SPX remains bullish. It continues to trend higher, with all moving averages in sync. The first major support area is at 2300.
Both equity-only put-call ratios continue to decline and thus remain on buy signals.
Exactly a week ago, on February 9th, $SPX broke out over 2300, establishing new all-time highs, accompanied by almost all of the major averages, including finally the small-cap Russell 2000 ($RUT). The chart of $SPX remains bullish as long as $SPX is above 2300.
Both equity-only put-call ratios have turned sharply lower in the past week, as the upside breakout has been accompanied by heavy call buying. Thus they remain on buy signals.
The stock market, as measured by most of the major indices, made a breakout move to the upside yesterday and is now trading at new all-time highs once again. $SPX is clearly in an uptrend and holding above all support areas, which is bullish.
Equity-only put-call ratios continue to crawl along the bottom of their charts, moving mostly sideways rather than up or down. This is another overbought indicator, but it won't really become bearish until these ratios begin to trend higher.
