The volatile moves this week have given rise to a number of new trading signals. Since some are in conflict with others, one has to make a choice as to how to approach them.
$SPX sold off sharply and recovered sharply and is now more or less where it was just over a week ago. An $SPX close above 1695 would likely pave the way for another attempt at the all-time highs of 1730, which is also resistance.
Equity-only put-call ratios moved to sell signals recently, and have been accelerating upwards ever since. This upward move solidifies their intermediate-term sell signals.
Both of the breadth oscillators we follow moved back to buy signals, as a result of Thursday’s monster rally.
$VIX completed a buy signal yesterday as well. This has the potential to be a very powerful buy signal.
In summary, the violent rally of Thursday was extraordinary. An $SPX close above 1695 would give technical confirmation of these buy signals from $SPX itself. Lacking that, the bears may take another run at things next week.
S&P 500 (SPX), CBOE Market Volatility Index (VIX), 21-Day Equity Only Put Call Ratio (PC21), and Weighted 21-Day Equity Only Put Call Ratio (PC21 w) charts updated each Friday.
*Note: If the current charts aren’t displaying, you may need to refresh your browser.