The bullish juggernaut was finally slowed a bit this week by the Fed's decision to raise interest rates (or at least, that was the excuse for some profit-taking). However, the chart of $SPX remains very strong, and this is a period of highly bullish seasonality.
Put-call ratios are remaining bullish. Both equity-only put-call ratios are declining daily, although the pace of their decline has slowed over the past two days. Even so, a declining put-call ratio is bullish for stocks.
This has been a very strong week for the stock market. New highs have been registered by all the major indices. Not only have all of these major averages traded at new all-time highs, but these moves have been accompanied by strength from the technical indicators. The only problems that are cropping up are those from an overbought market, but as readers know "overbought does not mean sell."
$SPX has struggled this week, but it remains above the rising 20-day moving average, so the $SPX chart is still bullish. There is support at 2180, but the more important support is at 2170. As long as $SPX is above that level, the chart will be bullish.
All systems are in bullish modes at this time. $SPX has broken out to new all-time highs, finally catching up to The Dow, Th Russell 2000, the Value Line Composite, and the NASDAQ Composite, which had already done so. There is support in the 2180 area.
Equity-only put-call ratios are on buy signals, as is the Total put-call ratio. These are not strong buy signals, by historic measurements, but suffice for now.
Buy signals have abounded in the past week. In Figure 1, I have included Tuesday's night's action (vertical red line), as the market first plunged when it became a distinct possibility that Donald Trump would win the election. This was a very "Brexit-like" response to a surprise vote.
I used to think "weatherman" was the main occupation where you could be wrong constantly and still keep your job. Now I'm going to add "pollster" to that list.
The chart of $SPX (Standard & Poors 500) continues to have a slightly negative bias to it. There is a clear series of lower highs on the chart. Moreover, the trend line from the January lows has been broken.
Equity-only put-call ratios are both technically on sell signals at this time, according to the computer programs that we use to analyze these charts. However, to the naked eye, they are more or less moving sideways.
Stocks appear to be struggling a bit, but there hasn't been a decisive breakdown. The $SPX chart shows some negative trend lines, but the important area is support at 2120. As long as that holds, the bulls will remain in charge.
