Mar S&P has rallied about 16% to current levels form the July low, which is a very strong move for this market, especially given the recent lower-volatility environment. A look at a weekly chart shows just how "one-way" this move has been. Given this rally, a more exuberant trading sentiment would be expected but the measure we watch (20-day equity put/call ratio) has simply not shown the kind of overly optimistic readings that have been associated with prior significant tops.
There have been other sentiment readings that have shown a high level of optimism but those have tended to be surveys, rather than measuring what the general trading public is actually doing with short-term money. Given the otherpositives of strong price action and friendly seasonals, the outlook remains fora test of the all-time highs (1550 on the cash index, about another 7% gain) before a significant top starts to develop.
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