I promise not to complain about breadth because Wednesday's was the best breadth we've seen since mid-October. Mind you it was not spectacular but it was better than it has been so I will not complain.
But it is time to discuss the Oscillator. As you might recall just over a week ago the Nasdaq Momentum Indicator got oversold (Tuesday, November 21, after the close). That means it still has some time on its hands. This indicator is best used when it is within a few days of reaching an overbought or oversold condition so this may change but as of now it appears this indicator will get overbought in a week, Thursday, December 6. As we get closer to the date I will show you the chart if this is still the case.
My own Oscillator is a bit trickier because we have not had two days of positive breadth in almost two weeks. Right now I would pencil in late next week/early the following week but that is still up for grabs and much depends on what the market does in the coming days.
The bottom line is that we are no longer oversold but we are not yet maximum overbought. You can see my own Oscillators are not yet over the zero line.
As you can imagine sentiment shifted drastically after Wednesday's action. Now there is talk about a year-end rally whereas a week ago we saw all sorts of scary statistics about how down Novembers lead to down Decembers, etc.
This shift in sentiment is most evident in the total put/call ratio which was 84% which is the lowest since October 2. Before you get excited because that was when the S&P made its high let's step back and recall that the market is in a different place now vs. then. Let's also remember that 84% is really neutral and that the 10-day moving average of this indicator is still heading down.
Sticking with the options ratios, the put/call ratio for ETFs was once again under 100%. That makes it four in a row, something we last saw in mid-December 2017. Prior to that we saw six in a row in late November. Naturally I looked back to see what the market did and again, this market is in a different place than that one was, but in both cases the market had some sort of pause.
The string of six sub-100% readings heading into December 1 is interesting because you can see the volatility that took place immediately thereafter. Two weeks later when it happened again the pullback was more gentle and subdued. Both are boxed off on the chart below.