fbpx Weekly Stock Market Commentary 9/25/15 | Option Strategist

Weekly Stock Market Commentary 9/25/15

By Lawrence G. McMillan

The $SPX chart remains bearish. During the oversold rally that failed at the 2000 level, an upward trend line had developed on the $SPX chart, connecting the daily lows since the 1870 bottom. That trend line was broken decisively this week, as $SPX fell back below its 20-day moving average. For now, the $SPX chart is bearish as long as it remains below the broken trend line (see Figure 1).

Put-call ratios are bullish. Figures 2 & 3 show that both equity-only put-call ratios have rolled over and begun to trend downwards. Those are buy signals.

Market breadth hasn't been terrific, nor has it been terrible. There is a chance that a rally on Friday could generate a breadth buy signal.

Volatility has generally been trendless. $VIX probed below 19 but didn't close there. We continue to feel that a $VIX close below 19 would be bullish for stocks.

In summary, the intermediate-term indicators are still negative (except for put-call ratios), but oversold conditions are springing up, so sharp but short-lived rallies are possible.

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.

-->