fbpx Weekly Stock Market Commentary 5/15/2020 | Option Strategist

Weekly Stock Market Commentary 5/15/2020

By Lawrence G. McMillan

A double top is now evident on the $SPX chart in the 2950 area. So for now that is strong resistance. The question is whether we're in a trading range or a stronger downturn is in store.

There are three important support levels: 2800, 2720, AND 2650. I feel that sellers would become more aggressive as each of these were violated on a closing basis. So far, none have been.

Equity-only put-call ratios remain on buy signals. The standard ratio has fallen to extremely low, overly optimistic, overbought levels, but it has not yet rolled over to a sell signal.

Market breadth has volleyed back and forth like a tennis ball, moving from sell signal to buy signal with (too much) ease. In fact, currently the two oscillators have split signals, with the "stocks only" on a sell, and the NYSE-based oscillator on a buy.

Volatility continues to be a very interesting aspect of this market. This past week, $VIX spiked up again, generating another short-term buy signal.

From an intermediate-term perspective, though, the $VIX chart is still negative because $VIX continues to close above its 200-day moving average.

For that and other reasons, we maintain a "core" bearish position, but we will trade short-term buy signals around it.

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.

-->