The stock market, as measured by the S&P 500 Index SPX, has continued to remain in the downtrend that started near the 4600 level in late July. The decline has now reached the 4400 level, and that is good news in that it fills a number of gaps on the SPX chart — gaps which were created in late June and early July.
Breadth has been negative and it’s getting worse. Therefore, the breadth oscillators are still on sell signals, but they have reached a deeply oversold condition. Eventually, those oversold conditions will produce buy signals, but not until breadth stabilizes and begins to improve. “Oversold does not mean buy.” So, for now, this indicator remains negative.
In summary, as negative as some of the indicators are, the chart of SPX is bullish as long as the index closes above 4330. Thus, we are maintaining a “core” bullish position . We have added other confirmed signals around that “core” position.A pair of competing $35 takeover bids have emerged for U. S. Steel X, +0.20%. Option volume has been exceptional, and stock volume patterns are positive as well.X: 31.15 Sept 31 call: 1.67 bid, offered at 1.73Option volume in PSX, +1.
Long 0 expiring CCL CCL, -2.35% Aug 17 calls: The calls were stopped out when CCL closed below 17.1 on August 11th. Long 2 expiring EW EW, -2.49% Aug 77.5 puts: Roll out to the Sep 77.5 puts. We will continue to hold these puts as long as the weighted put-call ratio remains on a sell signal.