And so it begins. Sell signals have been registered, and it is possible that more will follow. $SPX closed off nearly 10 points yesterday, as attempts to rally all afternoon eventually failed, and the index closed near its lows. S&P futures have traded another 5 points lower overnight. This activated the “modified Bollinger Band” sell signal.
This week's action makes the $SPX chart bullish (how could it be anything else when trading at new all-time highs?).
There is no technical resistance for a chart at new all-time highs. There is support at 1850 (which had been resistance), then at 1825- 1835 below that. It is our opinion that a close below 1825 would be quite negative.
Equity-only put-call charts continue to be bullish.
The broad market, as measured by the Standard & Poors 500 Index ($SPX) has finally managed to close at a new all-time high. A second day closing above 1850 would solidify the breakout and give it more credence.
Equity-only put-call ratios (Figure 2 and 3) have finally rolled over to buy signals.
Market breadth has been strong all month. As a result, the breadth indicators remain on buy signals, but they are in deeply overbought territory.
The stock market rally that began on February 3rd continues to persist, almost daily. The Standard & Poors 500 Index ($SPX) has only had two down days in that time. Even so, there is some question as to whether it has the strength to overcome what is stubborn resistance at 1850.
A lot has happened in the past three weeks, but $SPX is literally unchanged from where it was at that time. A nearly 100-point round trip has taken place -- down, then up.
A move above 1850, to new highs, would be very bullish for $SPX. Although if it happens right away, it will be without support from many of our indicators. Meanwhile, there is minor support at 1800, and major support at 1740 (the February lows).
Equity-only put-call ratios continue to remain on sell signals.
The stock market finally halted its straight-down tailspin. A strong rally generated some oversold buy signals which could carry the market back towards its declining 20-day moving average.
The $SPX chart is negative, in a pattern of lower highs and lower lows, and that is what makes it bearish.
Equity-only put-call ratios remains negative. Thursday's rally did not impede their march upward, and when put-call ratios are rising, that is bearish for stocks.
Are you having fun yet? Volatility has returned, and the market is a daily dose of pain and pleasure, to either the bulls or the bears. There are plenty of cross-currents now, and in reality, volatility hasn't even increased all that much (statistically).
Yesterday saw steady rally for nearly the entire day. That had some ramifications beyond merely an oversold bounce. However, it’s what has happened overnight that has been extremely volatile and interesting. First, just after yesterday’s close, Turkey announced that they were intervening on their currency, and S&P futures rallied 13 points from yesterday’s close.
The incessant march upward has run into a bit of a roadblock. The 1850 level on the Standard & Poors 500 Index ($SPX) has proven to be stiff resistance. The failure of the market to clearly break through to new all-time highs has put the bears (temporarily?) in charge. There is most likely going to be a challenge of support at the 1810 level (see Figure 1) soon.
Equity-only put-call ratios have both rolled over to sell signals.
If there is a theme to this market, it's this: it's overbought, but continuing to rise. There is strong support for $SPX at 1810. Moreover, there is now resistance near 1850.
Now for the litany of bullish, but overbought indicators: Equity- only put-call ratios are typical of this group. Both ratios are declining, and that is bullish. In addition, both ratios are at the lowest levels on their chart and that means they're overbought.
