fbpx Weekly Stock Market Commentary 12/20/2019 | Option Strategist

Weekly Stock Market Commentary 12/20/2019

By Lawrence G. McMillan

The market could hardly be stronger than it is. $SPX, NASDAQ, and the Dow are making new intraday and closing highs almost daily.

There is now support at 3150, which had been a minor resistance area in late November and early December, before the Index blasted up through there on December 12th -- and hasn't stopped since. Below that, there are support areas at 3130 (minor), 3065-3070 (strong) and 3025-3030.

Equity-only put-call ratios are in very overbought territory, but they haven't been able to generate strong sell signals (yet).

Market breadth has improved, and both breadth oscillators are on buy signals and are in modestly overbought territory.

Volatility remains in the bullish camp. First, the $VIX "spike peak" buy signal from December 4th remains in place. Second, the trend of $VIX is sideways-to-down, and that is bullish as well.

In summary, we remain bullish in line with the indicators. However, the massive number of overbought conditions is once again worrisome, so we would not ignore sell signals, should they appear. Meanwhile, tighten trailing stops where appropriate and roll (deeply) in-the-money calls up to be at-the-money calls.

This Market Commentary is an abbreviated version of the commentary featured in The Option Strategist Newsletter.

The Option Strategist Newsletter $29 trial

Share this

Option Strategist
Blog Search

Recent Blog Posts

Trading or investing whether on margin or otherwise carries a high level of risk, and may not be suitable for all persons. Leverage can work against you as well as for you. Before deciding to trade or invest you should carefully consider your investment objectives, level of experience, and ability to tolerate risk. The possibility exists that you could sustain a loss of some or all of your initial investment or even more than your initial investment and therefore you should not invest money that you cannot afford to lose. You should be aware of all the risks associated with trading and investing, and seek advice from an independent financial advisor if you have any doubts. Past performance is not necessarily indicative of future results.
Visit the Disclosure & Policies page for full website disclosures.

-->