The broad market, as depicted by $SPX, could not penetrate through the 1130 area to the upside, despite trying to do so for several days. $SPX fell through two support levels and broke the uptrend line yesterday, and now today it closed at 1083 -- completing the bearish top.
Equity-only put-call ratios are turning bearish.
Market breadth began to wane before the market collapsed, and gave a sell signal as of Tuesday's close.
Volatility indices ($VIX and $VXO) have been less bearish. $VIX hasn't risen with the same ferocity that $SPX has declined.
In summary, the $SPX breakdown appears to be significant, despite the quick appearance of short-term oversold conditions.
Lawrence G. McMillan is the author of two best selling books on options, including Options as a Strategic Investment, recognized as essential resources for any serious option trader's library.
Copyright 2024 Tiger Shark Publishing LLC . All rights reserved.
It should not be assumed that the methods, techniques, or indicators presented on these websites will be profitable or that they will not result in losses. Past results are not necessarily indicative of future results. Examples presented on these websites are for educational purposes only. These set-ups are not solicitations of any order to buy or sell. The authors, Tiger Shark Publishing LLC, and all affiliates assume no responsibility for your trading results. There is a high degree of risk in trading.
Free Festival of Traders Videos
