fbpx Weekly Stock Market Commentary 8/3/2018 | Option Strategist

Weekly Stock Market Commentary 8/3/2018

By Lawrence G. McMillan

While the $SPX chart remains bullish, in that it is in an upward-sloping channel, there are some troubling signs beginning to appear, including a verified "modified Bollinger Band" sell signal.

The $SPX chart itself has seen support at the 2800 level, or just below, on recent pullbacks.  Below that there is major supoport at 2740.

The equity-only put-call ratios remain split in their outlook.  The weighted ratio gave a buy signal a couple of weeks ago and remains on that buy signal.  The standard ratio, however, is struggling to roll over to a "buy" and has not yet given a confirmed buy signal.

Market breadth has been rather lackluster.  So, both breadth oscillators remain on sell signals.  Again, this has not produced a large market decline, but it is another sign of trouble.

Volatility is much more positive, as far as stocks go.  $VIX has remained below 15, and thus it is a bullish mode.  As long as $VIX is trending lower or sideways, stocks can rally.

In summary, a good number of the indicators remain bullish, and that keeps the intermediate-term outlook bullish.  However, the mBB sell signal and the persistence of lackluster breadth are indications that not all is well.

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

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.