$SPX has now climbed slightly above its declining 20-day moving average, and that is where oversold rallies usually die out. Despite the strength of the last week, $SPX has not even exceeded last week's high, much less the more important peak of early December. It is in a downtrend, with a pattern of lower highs and lower lows.
Stock market volatility continues to be above-average. The oversold rally that took place earlier this week seems to have run out of steam.
The $SPX chart is now showing lower highs and lower lows. That is a bearish trend developing. It will remain in effect until the most recent high is exceeded (2100, in this case).
Both equity-only put-call ratios remain on sell signals.
Breadth is the difference between advancing issues and declining issues, usually measured on a daily basis. Since the major averages only reflect what has happened to a few of the more important stocks (500 stocks in the Standard & Poors 500 Index – $SPX – for example, or 30 stocks in the Dow Jones Industrial Average), technicians have long used breadth as a measure of the health of the overall stock market.
So far in December, we've seen volatile $SPX daily moves of +22, -23, -30, +42, followed by a 4-day decline of 75 points. There is resistance at 2100 (the late November peak) and support at and 2020 (the November lows).
Equity-only put-call ratios remain bearish, since they continue to rise. Their rise is faster now, since put buying has increased in intensity this week.
The $SPX chart now has heavy resistance in the 2080-2100 area, where it spent most of the previous two weeks. The support at 2020 (November lows) is still in place as well, and will likely be tested in the coming days.
Both equity-only put-call ratios are on sell signals, and they are now beginning to race higher on their charts.
The market is struggling to maintain the rally that began with an abrupt V-bottom on November 16th. It may be merely an oversold rally.
From a larger perspective, $SPX has support at 2020 (the November lows) and resistance at 2120-2135 (the row of highs made in the last year or so).
Equity-only put-call ratios are split in their outlook. The weighted ratio rolled over to a sell signal a little more than a week ago, but the standard ratio remains on a buy signal (see Figures 2 and 3).
The stock market, as measured by the S&P 500 Index ($SPX), did a complete about-face this week, despite the terrorist atrocities after the market closed last Friday.
The rally has carried back to just above the 20-day moving average. Ultimately, there is resistance from 2115 to 2135, the series of market tops that have been made in the last year.
The strong bull run that took place throughout October and into early November is over. The break of support at 2070 was negative for $SPX. It could trade down to the 2000-2020 area in the short term.
Equity-only put-call ratios have remained on buy signals, even as $SPX has begun to falter. This perhaps indicates that the current decline is just a minor correction, and not something of a more intermediate-term nature.
The stock market's strong rally has continued for another week, although it's beginning to act a bit tired, and the market is getting overbought. Even so, the $SPX chart is still in an uptrend, and there is support at 2040, 2020 and 2000.
Equity-only put-call ratios continue to plunge, and that is bullish for stocks. These ratios are now in the lower portion of their charts, which is just on the verge of being overbought.
The stock market, as measured by the Standard & Poors 500 Index ($SPX), has gained 220 points in a month (since the September 28th lows). After such a strong advance in so short of a time, one would have to say that the market is overbought. Even so, actual sell signals have been hard to come by.
The $SPX chart itself remains bullish in that it is in a pattern of higher highs and higher lows, and the 20-day moving average is rising.
