We've once again seen the equity put-call ratio dip below .50, indicating a relatively high level of bullishness among traders. With 2706 20-day highs and 272 lows on Wednesday, however, we still don't see a level of deterioration in the broad market that would normally be associated with a significant market reversal. Demand continues to outpace Supply and we're seeing Supply expansion at successively higher price levels, characteristic of an uptrending market. We're also seeing fresh bull market highs in the advance-decline line specific to NYSE common stocks.
Indeed, among my basket of 40 stocks taken from eight S&P 500 sectors, fully 36 are in an uptrend vis a vis the Technical Strength measure. I will need to see greater deterioration of these indicators before anticipating a meaningful decline.
All of these indicators are updated daily via Twitter (follow the tweets here).
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