Commentary--Lawrence McMillan for Friday, November 10th, 2000.....
optionstrategist.com
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Edited for ease of reading.
>>>Note: the market commentary given in this issue is based on interpretations of our usual technical and sentiment indicators. It does NOT factor in the current political situation. It is obvious from today's market action that bellicose statements regarding recounts, lawsuits, "do-overs," etc., are not being taken kindly by the stock market. Therefore, you may want to factor some of that into the timing of entry or exit from your positions even if those positions are based on separate, sound analysis.
Stock Market
Even after the seasonally bullish period ended, many of the major put-call ratios remain on buy signals. These include the equity-only ratio, the weighted equity-only ratio, and the breakdown into the NYSE and NASD components.
Also on buy signals are the S&P 500 futures option put-call ratio, the weighted version of the same ratio, the $OEX weighted ratio, and the NASDAQ-100 ($NDX) weighted ratio.
Finally, the QQQ weighted ratio is quite overbought, but it's often difficult to discern what QQQ options are "saying" because of heavy institutional hedging activity in those contracts.
In addition, our oscillator remains on a buy signal. The only broad market put-call ratio currently on a sell signal is the $NDX "normal" ratio.
If this market plays out as we would expect, these all have ample room to move to continue the bullish phase that began in late October.
Having said all of that, it is important to note that these signals are not necessarily fresh buy signals. Some of them have been in place for quite a while (the oscillator, for example).
So we will remain bullish with the remainders of our previously-established positions, but will also be vigilant as to what daily changes might occur.
The CBOE's Volatility Index ($VIX) is not giving us much of a signal at the current time. It has moved back into the middle of its previous range after having given a buy signal last month.<<< |
