The equity put-call ratio finally showed a little bit of fear on today’s pullback, but a close around the .80 level or higher would have been better (it closed at .61). While sentiment is finally improving, we continue to think that a pause in the market to refresh sentiment would be a positive, the longer that pause the better. The Nasdaq (first chart below) doesn’t face much resistance until 2000, although the QQQ, the Nasdaq 100 tracking stock, may run into “options resistance” around this level, with calls outnumbering puts at 36 and above. 1967-1971 is now important support on the Nasdaq, with 1950 below that. The S&P and Dow (second and third charts) continue to look like bearish rising wedges off the late September lows. The S&P has major resistance at 1061-1070, and 1046-1050 and 1035-1040 are support. The Dow (third chart) has resistance at 9900-9925, and support is 9750-9773 and 9700.
