out of character in terms of the indicators, but it may also be a rather
severe reaction to the overbought conditions that had built up.
The S&P 500 Index ($SPX) had strong upside momentum a week
ago, but ran into resistance very near the April highs.
Equity-only put-call ratios are bullish and have remained bullish
even during this week's decline.
Breadth was extremely strong on the way up, and has been
extremely negative on the way down
$VIX actually closed below 16 (barely) last week,
and once again that was a harbinger of a market selloff. Now $VIX is
shooting upward, reaching above 21 today.
In summary, we remain bullish as long as $SPX continues to
close above 1300 -- based on the put-call ratio buy signals, at least. A
close below there would make us neutral, relegating the index to
trading range status.
McMillan Analysis Corp.
Info@OptionStrategist.com
(973)328-6219
www.OptionStrategist.com
