$SPX 1390 appears to be the line in the sand

By Lawrence G. McMillan

The market gapped higher on what has become 'typical' Apple earnings euphoria.  Durable goods orders came in below expectations.  Meanwhile, the Fed has notified us interest rates will remain at their very low levels.  Follow through after the open was short-lived, which was to be expected on a Fed day.  What should also be expected is violent unpredictable swings throughout the rest of the day.  Thus, we need to focus only on the recent major levels of support and resistance, roughly $SPX 1390 above and, for now, 1358 below.  It should be noted that the price action overnight brought the market back inside the longer term bull-market trend line.  But as mentioned yesterday, this is an upward sloping area, not a line such that we change our opinion as it oscillates above and below it.

Both equity-only put-call ratios pushed higher yesterday, thus maintaining their sell signals. This is really our only bearish indicator. And the way these ratios are moving higher rapidly, it would not be surprising to see them roll over to buy signals if the overall market action improves...

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