We saw a bit more panic Tuesday. I would not call it capitulatory, but I would call it a bit more. You see, we saw the put/call ratio go to 135% today. That is really the first sign of true concern that we’ve seen.
It has helped the 10-day moving average of the put/call ratio moved up, but as you can see, it is nowhere near where it would need to be for me to think there is far too much bearishness out there.
The number of stocks making new lows soared again and as long as that continues to rise, it’s difficult for the market to bottom. On a shorter-term and cheerier note, once again we saw the PowerShares QQQ Trust (QQQ:Nasdaq) volume rise. This time it was to over 90 million shares. That is the highest since December 2018.
We also saw the "what if" for the McClellan Summation Index needs positive 5,100 advancers minus decliners to halt the decline, which makes it oversold. The chart is shown below. But I want to point out that this is the only indicator I have that says we are oversold. My own Oscillator doesn’t show it, and nor does the Nasdaq Momentum Indicator.
Then there are some other points of interest. Both the Russell 2000 and the Dow Jones industrial average are at their 200-day moving average lines. The S&P has a line that comes in right around 3,100, depending on how thick your pencil is.
In addition, the S&P 500 filled a gap from early December. The Transports filled a gap from early October. The PHLX Semiconductor Sector (SOX:Nasdaq) came right down to the uptrend line that has held for the last eight months.
Finally, the Daily Sentiment Indicator for bonds got to 90, which means we should see bonds stall out and give some of it back. I think we rally short term and then come back down again.
I want to follow up on Alibaba (BABA:Nasdaq) from last week, because it did break the uptrend line but did not break the prior lows. If it can rally back to that line in the $213-$215 area I’d sell it.
The McClellan Summation Index is discussed above.
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That top in ViacomCBS (VIAC:Nasdaq) measured to $32, so there are no measured targets left. And since there are no signs of it finding a low of any sort, I would say it just needs to stop. If it did rally, the first resistance is the gap fill at $28. What would be bullish would be a gap up over $28, leaving these last two days down here as an island.
Apple (AAPL:Nasdaq) has a minor measured target and support from that uptrend line around $275-$280. Quite frankly, I am surprised it hasn’t really been able to take out Monday’s low. I do not think it breaks that line on this particular trip down. That’s not to say it won’t do so after a rally, but I don’t think it does so now. I think it bounces first.
I don’t think this uptrend line on Alphabet (GOOGL:Nasdaq) is the best line but $1,300-$1,350 would be the first real support level, and I would expect the stock to bounce from there. Alternately, a rally back to fill that gap around $1,470 would be a good place to sell.