Stocks have continued to rally, for the most part, although the rally was beginning to break down a bit technically until a positive news report about an antiviral for the coronavirus sickness spurred an 80- point rally in S&P futures overnight.
We continue to feel that the 2850-2900 range on $SPX represents some resistance. There is more or less resistance all the way up to the next significant level, at 3010 (which is also where the 200-day moving average is).
The oversold rally that began with an intraday reversal on March 20th has regained steam and has risen above the 20-day Moving Average, as is typucal for an oversold rally.
For the record, there is resistance in the 2850-2900 area, even though support and resistance have meant much to this fast-moving market.
Equity-only put-call ratios are on buy signals. The current buy signals occurred right near the lows, on March 23rd and will remain in effect as long as the ratios are declining.
The oversold rally that was underway last week ran out of steam as soon as it ran into the declining 20-day moving average of $SPX. There is now resistance at 2650. The 2175-2190 level still qualifies as support, and it has not been tested at all.
The equity-only put-call ratios remain on buy signals, despite the fact that they have curled up ovhe past few days. These buy signals would be canceled if the ratios rise to new highs.
We are currently, in March 2020, in one of the three most volatile markets in history. In terms of absolute price change, it has no peers. In terms of percentage price change, 1929, 1931-1933, and 1987 are all in the mix (but not 2008, which has been surpassed). If we looked back even farther, there would be other markets which were volatile, too (1907, for example), but in this paper we are not looking back past 1928.
Stocks exploded out of a massive oversold condition this week and put together the best 3-day rally since....1931. That sounds a bit ominous, doesn't it? 1931 and 1932 were two of the worst stock market years on record. In any case, the bulls are enjoying the rally, and it has generated some buy signals from our indicators.
