A look at sentiment and other stuff....
CBOE VIX hit its lowest level since 10/5, indicating that complacency is returning to the market. Still a bit of a drop to the levels recorded at the Labor Day top (18-19).
Hand in hand with that, a 5-day moving average of the CBOE Equity Put/Call Ratio hit a low unseen since 9/11.
Wilder's RSI for the SP500 reached the level of 11/7, which marked the end of a rally leg. I would interpret any further moves up in RSI as a short-term overbought signal, but also a sign of market strength and a possible change-of-character for that market. It would also confirm the index rising above its 50-day MA the other day.
The cumulative tick reached its highest level in nearly 3 months -- again, a two-pronged interpretation: overbought, BUT a possible sign of market strength.
The daily Coppock Curves for the S&P and the NAZ Composite both began turning up about 8 trading days back. I take this as a signal merely to keep a close eye on the weekly and monthly curves, which are more reliable.
I'm not an in-and-out trader like the rest of you. I've added a few positions in the last few weeks, so I'm participating in the current rally. I'm using TA to tell me when it's time to really load up, which should confirm what my valuation analysis tells me. Great values, however, are not exactly jumping off the screens. This market remains, for the most part, ridiculously overvalued, particularly the NAZ. |
