Commentary by Lawrence McMillan for July 20, 2000 ...
optionstrategist.com
Edited for ease of reading.
>>> Stock Market
Despite Thursday's rally and some healthy reaction to better-than-expected earnings, the majority of our indicators are signaling caution.
The $OEX, QQQ, and $NDX put-call ratios are all steadily on sell signals. In addition, our oscillator gave a short-term sell signal on Monday of this week. It now stands at +122.
The equity-only put-call ratios are less negative. Both the "regular" equity-only and the "weighted" equity-only are wavering at mid-level on their charts.
When one breaks down the equity-only into its NYSE and NASD components, one finds what he might expect:
...the NYSE equity-only put-call ratio is on a sell signal,
...while the NASD equity-only put-call ratio is more bullish (although it might roll to a sell signal in the near future as well).
Hence, I wouldn't rate any of these (except maybe the bearish NYSE ratio) as overwhelmingly bearish or bullish right now, but they certainly aren't as bullish as they were in the past couple of months.
Finally, implied volatility ($VIX) remains fairly low, which still means that there is a good possibility of a market explosion in the fairly near future.
Overall, the oscillator sell signal, coming on the heels of an upturn in the equity-only put-call ratios and the sell signals in $OEX, QQQ, and $NDX, seem to indicate that a bearish position is warranted.<<< |
