Weekly Market Commentary 8.22.14

The rally that began on August 8th has extended quickly and strongly to take $SPX to new intraday and closing all-time highs.  When it crossed over resistance at 1960, the $SPX chart improved from “bearish” to “neutral.”  If another all-time closing high is registered today, that will officially make the $SPX chart “bullish.”
LM spx

Equity-only put-call ratios are in one of those in-between states.
Consider the two charts in Figures 2 and 3.  You can see that they have curled over in the last three or four days.  That is apparently a buy signal — at least to the naked eye.  However, the computer programs that analyze these charts continue to rate them as “bearish.”
LM 2 pc21

Market breadth has been quite positive.  As a result,
both breadth oscillators are on buy signals, and they are in overbought territory.
LM 3 pc21_w

Volatility indices dropped to very low levels.  At
these levels, volatility is benign, and stocks can rise.
LM 4 vix

In summary, all of the indicators have swiftly swung back to
“bullish” except for the put-call ratios.  A consecutive close at new
highs will make the intermediate-term outlook bullish once again.

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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…

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