Something changed in the market Monday.
Folks got all bulled up and they got cocky about it. Sure, that's anecdotal, but when my Twitter feed has gone with barely any rocket emojis in months to "stonks only go up" I know things have changed.
You might recall the rocket emojis and "stonks only go up" nonsense was quite common in early February. Then the rug was pulled, and that sort of laughing and goofing around about the market went right out the window. But now it's back.
Oh sure, but come on Helene, don't you have any statistics that say this, too? I sure do. The put/call ratio fell to .69, which is the first reading under .70 since Feb. 22. The main difference is that the put/call ratios were regularly under .70 then, it wasn't just one day. If you feel that is not confirmation enough let's talk about the Daily Sentiment Index (DSI).
The Volatility Index was actually green on Monday. The wild thing is that usually the bears are all over it, but there was silence on that subject Monday. The oddity is that despite being green, the DSI for the VIX fell to single digits at 9. That is usually a sure sign we can expect volatility to go up in the days ahead.
Let's add to that. The DSI for the S&P tagged 90, something that doesn't happen often. In fact, the last time it did so was Aug. 26. That's the arrow on the chart of the S&P below. As you can see there were a few more days to party but that was it, the runway was short.
I suppose the good news is Nasdaq's DSI is only at 85, so there is some room to move there.
Breadth was nothing to write home about. At positive 850 on the New York Stock Exchange for a day the S&P was up 58, you don't need me to tell you the rally was concentrated in the index movers and not widespread. Upside volume was 59% on the NYSE. Last week I thought it was lagging when it was 65%, so obviously 59% is not better. It's worse.
Over on Nasdaq, upside volume was 53%. That's right, there was barely more up volume than down volume, yet Nasdaq was up 225 points. Last week, Nasdaq had two 200-plus point rally days -- and up volume wasn't impressive at 65%. So, 53% is even less impressive.
Now, I find myself in a quandary. We are not yet fully overbought. Heck, look at the Nasdaq Overbought/Oversold Oscillator: It's not even over the zero-line yet. The math says the window is open for the rest of this week using the Oscillator (and the Momentum Indicator), but the sentiment -- using the DSI -- says you might want to keep an eye on the door.