The indexes have so far been grinding lower while bouncing just enough to relieve oversold conditions. Can they put in a good bounce, or do we need some hard selling first? The Dow and S&P (first two charts below) continue to flirt with falling support. If those supports break cleanly, with a close below 7825 on the Dow and 825 on the S&P, selling could pick up. To the upside, 7950 and 8000 are resistance on the Dow, and 845 on the S&P. The Nasdaq (third chart) has resistance at 1300 and 1315-1320, and support at 1263-1273 and 1220. The high close today in the equity-only put-call ratio appears to be mostly genuine, with a preliminary reading of 1.0. That’s a plus, except for the fact that it came on a down day for the VIX, the options volatility index, which suggests that there could be short covering occurring, or just not the level of fear we’d like to see. But in the short-term, we’d have to label that one a positive.
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