Weekly Commentary

The market just cannot get a rally together that is strong enough to erase the oversold conditions. There is now resitance at 1335, where the rally failed this week.

Equity-only put-call ratios continue to plow higher on their charts. They remain on sell signals.

Market breadth has been quite negative, and that is one of the major oversold conditions.

Volatility indices ($VIX and $VXO) have remained stubbornly high. As long as $VIX is above 21, that is bearish for stocks.

In summary, the oversold conditions persist and should still be able to generate a sizeable rally. But as long as intermediate-term indicators remain negative, any such rallies will be short-lived.

Larry McMillan

optionstrategist.com

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Larry McMillan

optionstrategist.com

Professional trader Lawrence G. McMillan is perhaps best known as the author of Options As a Strategic Investment, the best-selling work on stock and index options strategies, which has sold over 300,000 copies. An active trader of his own account, he also manages option-oriented accounts for certain individuals. In a research…