With the market moving the way it did early in the week, one practically needed hourly indicators to keep up. Since we don't use hourly indicators, but rather DAILY ones, they will have to do. First, the equity-only put-call ratio has flattened out and is in danger of giving a sell signal -- although it has not yet done so. Our computer projections indicate that there is an 87% chance that it WILL roll over to a sell signal with the next three days, though, so unless there is extremely bullish action in that time period, the sell signal is going to occur. A more positive picture is being painted by the oscillator. It has remained on the buy signal it generated back in mid-March. Breadth has generally improved over that time, but the oscillator has managed to remain from getting overbought (which would be a precursor to a sell signal). It currently stands at +117. A sell signal would only be generated if it rose above +200 and then fell back below +180. The equity-only put-call ratio is our main indicator and, if it goes to a sell signal, we would have to respect it. For now, though, we are going to tighten the stops on our long $OEX calls and remain bullish unless we receive a CONFIRMED sell signal from the put-call ratio.
Thursday April 6, 2000
optionstrategist.com
Also, interesting new Rydex funds - Internet and 200% beta funds for bull and bear similar to the Profunds |
