Off With a Bang, Out With a Whimper

 | Jan 10, 2013 | 7:16 AM EST
  • Comment
  • Print Print
  • Print

I was hoping for something a bit more in the way of fireworks-type rally Wednesday -- and it did begin as though it would really get going, with everyone all fired up -- but then the rally simply died. However, it didn't do so with any "oomph." Rather, it just petered out. Yet, curiously, the index put-call ratio slipped right back under 100%.

While that metric is not the negative it had once been, we have now seen sub-100% readings in three out of the last four sessions. When this gets persistently low, we know the market is due for a pullback.

As far as statistics are concerned, it was an interesting day. If we looked at breadth via the advance-decline line, we would have thought trading was fabulous, with a ratio of 2 to 1 in advancers vs. decliners. Yet when we do the same exercise using up and down volume, that turns in an essentially flat reading.

In any event, you can see the Oscillator is finally heading into overbought territory, and this should peak sometime early next week.

Overbought/Oversold Oscillator -- NYSE

The 30-day moving average of the advance-decline line, meanwhile, already peaked late last week.

30-Day Moving Average of the Advance-Decline Line

Also, a few days ago the Volume Indicator peaked at just over 55%, which indicates an overbought condition.

Volume Indicator

The 21-day moving average of the ISE call-put ratio has turned down, as well.

ISE Call-Put Ratio -- 21-Day Moving Average

As noted in Wednesday's column, the equity put-call ratio's 30-day and 10-day moving averages are now attempting to turn upward.

The Hi-Lo Indicator has not yet peaked, but it is now up in overbought territory. The absolute number of stocks making new highs has been dwindling, and I continue to expect any higher high in the S&P 500 to carry a negative divergence, given that we continue to see less than 495 new highs -- the peak reading in September.

Hi-Lo Indicator

The McClellan Summation Index continues to rise, and that is bullish. It would take at least one and more likely two harsh down days in order for it to halt its current rise. What should be concerning is if this indicator makes a lower high. As you can see, it is still well off the highs made in September.

McClellan Summation Index


Overbought/Oversold Oscillator -- Nasdaq

Columnist Conversations

We will take off some more risk, bank some winners SOLD PG OCT 90 CALL AT 3.3 (in at 2.90) ...
After a very calm and sedate period of volatility which saw the VIX fall not only to all time lows but had a r...
today is a good day to lighten the load and take some positions off the table. SOLD WB OCT 85 CALL AT 11 (i...
I reached out last week to my close friend Ken Shreve, who is a prominent writer for the IBD.  I asked Ke...



News Breaks

Powered by


Except as otherwise indicated, quotes are delayed. Quotes delayed at least 20 minutes for all exchanges. Market Data provided by Interactive Data. Company fundamental data provided by Morningstar. Earnings and ratings provided by Zacks. Mutual fund data provided by Valueline. ETF data provided by Lipper. Powered and implemented by Interactive Data Managed Solutions.

TheStreet Ratings updates stock ratings daily. However, if no rating change occurs, the data on this page does not update. The data does update after 90 days if no rating change occurs within that time period.

IDC calculates the Market Cap for the basic symbol to include common shares only. Year-to-date mutual fund returns are calculated on a monthly basis by Value Line and posted mid-month.