I would expect $SPX to finally make a new all-time high soon. $SPX has support near 1530, which is also where the rising 20-day moving average currently is.
Equity-only put-call ratios continue to be mixed, with heavy call volume chasing the rising market, but heavy put volume in the form of protective put purchases. These two are nearly canceling each other out.
Market breadth continues to remain overbought and on buy signals.
So, that’s what passes for a “down day” nowadays? S&P futures were down for most of the day, but only about 7 points at their worst. But, as has been the case most of the time recently, those losses were regained by the end of the day. In fact, the Dow ($DJX) recovered all its losses, as it continues to handily outperform $SPX. Overnight, prices tried to retreat again (modestly), but retail sales data was positive this morning, so now the S&P futures are trading slightly higher on Globex.
With the Dow ($DJX) making new all-time highs, and the Standard & Poors 500 Index ($SPX) simultaneously making new post-2007 highs, it certainly seems that higher prices lie ahead.
Both of the equity-only put-call ratios are somewhat distorted. That is because of all the put buying that has been taking place as protection for stock portfolios. At the current time, they are moving lower and thus appear to be back on buy signals.
MORRISTOWN, N.J. (MarketWatch) — With the Dow Jones Industrial Average making new all-time highs yesterday, and the Standard & Poor’s 500 Index simultaneously making new post-2007 highs, it certainly seems that higher prices lie ahead.
Despite this price momentum, not everything is as bullish as one might suspect. We’ll look at the various indicators in depth to see how they line up.
In this Orlando Money show interview, Larry McMillan discusses his market outlook for the near future. As mentioned in The Option Strategist 2013 Stock Market Forecast, Larry compares the current environment to the 1970's and predicts that the S&P 500 will reach the 1550-1600 level before experiencing a third severe market downturn. Watch the full interview below.
The quiet sleep-walking phase of the market seems to have ended, although that doesn't mean that the bulls have relinquished control. The chart of $SPX has widened out a bit, with support at the weekly low of 1485 and resistance at last week's highs at 1530.
One set of indicators that is bearish is the equity-only put- call ratios. As you can see from Figure 2 and 3, the ratios began to climb last week and are still rising, despite the market's rally this week. A rising put-call ratio is bearish for stocks.
In December, we presented a strategy for trading the highly leveraged ETFs. At that time, we said that perhaps an option strategy would be a better approach. In this article, we expand on that original research by examining one option strategy (and discarding a few others). This deeper I dig into this subject, though, the more possibilities present themselves.
$SPX has closed below 1495 and $VIX has closed (way) above 16.21, so those are sell signals on both charts. Moreover, both equity-only put-call ratios have rolled over to sell signals as well. In addition, the CIV sell signal arrived, as the average stock’s CIV has risen to the 23rd percentile (well above the 17th percentile, which is what was required for the sell signal). There are other negatives as well – such as the major negative reversal that the market underwent on Monday (or, if you prefer – a outside down day).