800-724-1817 Email: info@optionstrategist.com
Thursday, July 8th, 2010
The selling that began on Monday morning, June 21st, continued pretty much unabated for more than two weeks. In so doing, a rather severe oversold condition was created, and the market got a superb relief rally from that. The chart of $SPX is clearly in a downtrend. There is support at 1020 and resistance at 1080. The equity-only put-call ratios briefly turned to sell signals, but the standard ratio is back to a buy signal, and the weighted ratio is at very extreme levels, from which a buy signal may emerge. Market breadth indicators with Wednesday's rally, have rolled over to buy signals. Volatility indices (VIX and VXO) have been among the most bullish indicators of late. Breakouts in either direction should be respected. If $SPX breaks out over 1080, we'll become more aggressively bullish, but until then, this is just an oversold rally.
McMillan Analysis Corporation
PO Box 1323
Morristown, NJ 07962-1323
www.OptionStrategist.com
(800)724-1817
