Everything is grinding to a halt in this market, and that is probably a sign that an explosive move lies in the not-too-distant future. $SPX has support at the old highs (2120). If that should fail, there should be a good support level at 2070.
Equity-only put-call ratios remain on sell signals, according to the computer programs we use to analyze these charts. However, if one looks at Figures 2 and 3, it is obvious that these ratios have just been trending sideways for the past few days.
In the April 30th Hotline, we noted that “stocks only” cumulative breadth did make new all-time highs twice recently. Those two dates were April 15th and April 23rd. It has not made another new all-time high since then, although it is only about 1,700 issues below its high right now – so another strong upside day today could produce another new all-time high for cumulative breadth.
The broad stock market has continued to frustrate both bulls and bears by remaining within a trading range for quite some time. However, today, $SPX closed at a new all-time high and thus is on the verge of an upside breakout. While this produced much glee on CNBC, there could be problems once again if this breakout is not confirmed.
The simplest confirmation would be another $SPX close at new all-time highs, and this time above the all-time intraday high at 2125.92.
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The stock market weakened considerably this week, and many of the indicators are now following suit with sell signals. But $SPX price action continues to frustrate both bulls and bears, as it refuses to trend higher or lower.
So now for $SPX, there is support at 2067 - 2072 (the April and May lows), with resistance above at 2125 (the all-time highs). Equity-only put-call ratios have deteriorated badly this week. Both ratios have rolled over to sell signals.
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Stocks dawdled at or just above the previous all-time highs, but couldn't convincingly push through with a strong move. As a result, things began to deteriorate. Now, 2070 has some significance. If $SPX breaks down below 2070, a more bearish scenario should unfold.
Equity-only put-call ratios are still on buy signals. Both have "wiggles" curling upwards after Thursday's big down day, but they remain on buy signals.
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Both bulls and bears are frustrated by recent action. Most recently, $SPX has made repeated attempts to challenge the all-time highs, but it has not yet been able to break out. There is resistance in the 2110- 2120 area that has contained all advances.
In any case, the $SPX chart is still neutral until it breaks out of the triangle in a convincing way.
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