Online Stock Trading | Weekly Analysis

Weekly Analysis


Filed Under Market Commentary |

We saw some major bullish intraday reversals on the Nasdaq, S&P 500 slides on lighter trade, and bearish bets. Massive index put buying Friday has the big boys running for protection, all week the overall put/call ran extremely bearish. There is a disconnect between actions of fund managers and their sentiment. Mix signals about this market are all over the place, this is why we use price/volume action to form our strategy.

The most bullish story is the Nasdaq. Three straight days, Tuesday through Thursday the Nasdaq turned intraday losses into gains. Extremely bullish action, the Nasdaq avoided anything close to a distribution day. Although the S&P 500 did not fair as well it too avoided any distribution. As it stands now each index has 1 day of distribution in the past four weeks. Clearly, we are a ways from the turning point.

I keep mentioning the massive put buying on Indexes. Friday index put/call ratio reached its highest point, near 4.0. How to interpret this? First, who has the ability to purchase such large quantities? Big mutual funds, hedging their 95% long portfolios, they are the only ones who could be gobbling up these puts. They aren’t dumping their holdings, for bulls this is a great sign. However, we’ll start seeing distribution when the “big boys” begin to dump their holdings!

Trying to get down the watch list details. I am not completely technically inclined so when I get the up and running in its entirety I will post about it.

Happy Trading
Market Speculator

marketspeculator@gmail.com

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