As I am writing this, the futures are down about 10 points from Tuesday's close. The market has been gaping down and rallying in a seemingly random manner. It reminds me of the April-May 2008 period, a few weeks before an important top.
The put/call ratio (chart above, click to enlarge) has made a big "bearish spike". I think that in the next days, as the market falls to about 1100, it will indicate an oversold condition (it mostly already does). This will be a buying opportunity for a move to about 1150 cash s&p that will probably be the last one of this intermediate-term move up. The bearishness towards the economy has been reinforced by the Fed statement and is supporting the scenario of a rally.
I also think that this move higher will be accompanied by falling treasuries prices.
3 comments:
thanks for update. So you think oversold condition may be at SP 1095-1100?
the market is at 1090 right now and the pc ratio is not rising very much. this makes me think we will see more downside in the next days but it should be limited. i would not like to see it too far below 1080 cash for my rally scenario to hold.
Thanks for reply.
Tony
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