It has been a great stock market rally, with $SPX advancing 200 points in about a month. But the advance is slowing, and sell signals are setting up (although none has actually been confirmed yet).
$SPX has minor support at 2030 and also below there, at 2000.
Equity-only put-call ratios have remained solidly on buy signals for nearly a month. They are dropping rapidly on their charts, and it's bullish for stocks as long as they continue to decline.
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The bears seemed to have the fight knocked out of them by the big rally from 1820 (on Oct 15th) to here. $SPX moved steadily higher yesterday, and closed at another new all-time high. Meanwhile, the upper 4-sigma “modified Bollinger Band” (mBB) continues to decline because of the decrease in volatility. It is now just below 2021, and with $SPX at 2038, you can see that it’s quite a ways above that Band – in overbought territory, if you will.
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The rally continues to push to new all-time highs in most of the major broad-based indices ($SPX, $OEX, Dow, etc.). The advance has been so straight and fast that it hasn't left any support levels in its wake. The only one was at 2001, so a pullback below 2000 would be negative.
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The rally has been a straight-up affair, leaving a "V" bottom in its wake. Fortunately, our indicators have generated a strong series of buy signals along the way.
Since $SPX has sliced through virtually every conceivable resistance area, it makes it difficult to identify either support and resistance at this point. However, the overbought conditions that now exist have -- in the past -- caused the market to stop rising.
The stock market has rocketed back from a sharp selloff last week. At first, this appeared to be an oversold rally, but now it is picking up steam. Thus, it appears that it could be another intermediate-term bullish move, if one final thing falls into place: the $SPX chart must clearly turn positive.
