The stock market, as measured by the Standard & Poors 500 Index ($SPX)
has broken down badly this week. The decline accelerated after breaking
through minor support at 1965. The $SPX chart is now in a downtrend.
One more thing re the $SPX chart: It has been 681 trading days
since $SPX last touched the 200-day moving average (on November 20, 2012).
This is a record just waiting to be broken. Perhaps this will be the time.
Equity-only put-call ratios remain on sell signals. They are
racing higher on their charts, and that is bearish.
The breadth indicators are on sell signals, but they have reached
severely oversold territory.
In summary, we don’t have any true buy signals from our indicators, but the
oversold conditions indicate that a short-term rally could take place.
So, we remain intermediate-term bearish (until some true buy signals appear),
but are looking for a short-term bounce now.