The stock market has taken on a potentially bearish tone, although all the pieces are still not in place. But now that 1840 level has given way, the bears finally seem to have a chance to really take control of the market for the first time since the fall of 2012. We are not necessarily saying this is a full-fledged bear market, but the intermediate-term outlook is now turning bearish.
The upward market reversal that began on Tuesday when $SPX bottomed near the 1840 area, continued with passion on Wednesday. The rally was aided by the benign Fed minutes, and now $SPX is 25 points above Tuesday’s lows. The rally was accompanied by some very strong technicals as well. It was almost as if the buyers were waiting for the sellers (of Friday and Monday and early Tuesday) to finish before they stepped in with a vengeance.
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The broad stock market, as measured by the Standard & Poors 500 Index ($SPX) made new all-time intraday and closing highs on consecutive days this week. That, coupled with some new buy signals from breadth makes our intermediate-term outlook bullish.
Countering the bullish case is the fact that the equity-only put- call ratios have stubbornly remained on sell signals, but this might be protective hedging activity.
This issue was published one day early, on Wednesday, March 26th. This is because of the AAPTA Conference in Austin (see page 10), to which I will be traveling on Thursday, March 27th (the usual publishing day).
The Standard & Poors 500 Index ($SPX) has been bouncing around within a trading range for nearly a month now. There is resistance at 1880+ (the all-time highs) and there is support at 1840 (most recently tested a couple of weeks ago). There is validity to the theory that it is being wound up like a coiled spring, and could therefore explode with some force once the range's limits are broken.
Two weeks ago, as the market turned downward, a strong sell signal was generated by the “modified Bollinger Band” system. Last week, when there was a strong reflex rally, we received a $VIX “spike peak” buy signal. That system, too, is a powerful system usually. So which one is right? This article will explore the answer to that question.
We continue to get questions regarding why the $VIX futures are priced as they are, and how one should interpret that information. This is a subject that we have discussed many times in the past, but it is probably worthwhile to review it again.
There are two significant pieces of data that one should always be aware of, when evaluating $VIX futures: 1) the relationship of the futures to $VIX itself,
The market action in the last 10 days has been a complete whipsaw. Now, the chart of the Standard & Poors 500 Index ($SPX) shows the index to be in a trading range -- bounded by resistance at 1880+ (the all-time highs) and support at 1840 (last Friday's lows).
Equity-only put-call ratios remain on sell signals, even though the market has bounced back this week.
There will be a very slight alteration of our publishing schedule. The second issue in March will be published one day early, on Wednesday, March 26th. This is because of the AAPTA Conference in Austin, to which I will be traveling on Thursday, March 27th (the usual publishing day).
