LAWRENCE G. MCMILLAN
It appeared Sept. 23 that the bears had control of the stock market.
But they fumbled it badly.
Beginning with a modest oversold rally Sept. 24, the broader market has staged a strong advance — backed by some of the widest breadth in a while. Now the S&P 500 Index (SPX) has broken out over what had been resistance around 3,425-3,430 points. That has changed the S&P 500’s chart’s designation to “bullish” (in my opinion), and the next target is the all-time highs at 3,588. A reversal back below 3,400 could alter this bullish outlook, but that doesn’t appear likely.
Equity-only put-call ratios have rolled over, and so to the naked eye, this cancels out their recent sell signals. However, they are still on “sell,” according to the computer-analysis programs that we employ. The computer is using a statistical average, and by that measurement, there are still some very low numbers coming off the 21-day moving average.
There are even lower numbers coming on right now, as call buying has been huge over the past week or so. The problem is, we are not getting “average” readings, and until we do, the sell signals should be held in abeyance.
Video: Time to make tactical moves: advisor (Reuters)
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