Market Outlook

The put/call ratio has been rising yesterday (dropping on my inverted chart) despite the big move up:

In my experience this kind of behaviour portends the continuation of the up move.

However, on Wednesday, I would not be surprised by a violent retest of the 1080 level on cash spx. The market should resume its upward move afterwards.

On other matters, here is a chart of the 3 month average of the monthly percent change in CPI:

Note that the series has recently turned from a some kind of support level. If the past is any guide we should be seeing some benign inflation data in the near future. This would be consistent with positive surprises in other economic data like Retail Sales and would support a market rally from here to 1150. The Retail Sales Conundrum is solved!