Last week indicated that a pullback from the SPX 7500 level to 7200-50 thru
EOM was
possible due to the SPX setup and higher oil prices helped a Mon/Tue decline
about halfway to the 7330s, but mid-week stocks rebounded as Trump again began
insisting that a deal with Iran was imminent to end the war and oil prices fell.
The latest news is that a deal is expected by Sun. Equally important is
that the SpaceX (SPCX) IPO is set for June 12 vs the originally expected date of
Musk's birthday of June 28. Expect WS and Trumps team to do everything
possible to see stocks higher into June 12th.
Bearish sentiment overall improved slightly last week with the ST
Composite dropping from near a strong Buy to a weak Buy. ETF P & C
indicators remain near a strong Sell including the hedge spread, ST/INT
Composite, and the SPX & NDX ETFs plus ETF P & Cs. Some weakness is
possible late next week with a possible retest of last weeks lows around SPX
7330s depending on the outcome of the much touted "US & Iran deal".
I. Sentiment Indicators
The INT/LT Composite indicator (outlook 3 to 6+ months) has three separate
components. Starting Aug 26, 2023 SPX options are removed due to extreme 0DTE volume
distortions. New weights are ETF put-call indicator (30%), SPX 2X ETF INT
ratio (40%), and 3rd a volatility indicator (30%) which combines the options
volatility spread of the ST SPX (VIX) to the ST VIX (VVIX) with the UVXY $ volume.
Update Alt, INT view. Bearish sentiment reversed sharply after the Mon/Tue
drop back over the weak Sell level.
Update Alt EMA. Bearish sentiment reversed higher above a weak Sell.
The ST Composite as a ST (1-4 week) indicator includes the NYSE volume ratio
indicator (NYDNV/NYUPV & NYDNV/NYDEC) and the UVXY $ Vol/[SPX Trend, SMA only]. Weights
are 80%/20%.
Update. Bearish sentiment fell back to a weak Buy.
Update EMA. Bearish sentiment continued to fall below a weak Buy.
The ST VIX calls and SPXADP indicator bearish sentiment remains near neutral.
The ST/INT Composite indicator (outlook 1 to 3 months) is based on the Hedge Spread (52%)
and includes ST Composite (12%) and three options FOMO indicators using SPX (12%),
ETF (12%), and Equity (12%) calls compared to the NY ADV/DEC issues (inverted). FOMO
is shown when strong call volume is combined with strong NY ADV/DEC. See
Investment Diary
addition for full discussion.
Update EMA. Bearish sentiment continued to fall to near a strong Sell.
Update FOMO-calls. Bearish sentiment remains at a weak Sell.
Bonds (TNX). Bearish sentiment remains close to a strong Sell.
For the INT outlook, the gold miners (HUI) bearish
sentiment is presented in a new format using the data mining software to add
the inverse TNX rate to the ETF ratio.
Update. Bearish sentiment rose slightly above a weak Sell.
II. Dumb Money/Smart Money Indicators
This is a new hybrid option/ETF Dumb Money/Smart Money Indicator as a INT/LT
term (outlook 2-6 mns) bearish sentiment indicator. The use of ETFs
increases the duration (term).
Update. Bearish sentiment remains between a weak and strong Sell.
With the sister options Hedge Spread as a ST/INT indicator
(outlook 1-3 mns), bearish sentiment rose slightly but remains below a weak
Sell.
A new composite SPX options indicator uses both the volume adj (1/B-A) and P/C
equivalent spread (A-B) to compensate for the discrepancy between the two.
This replaces the old SPX options indicator for the SPX ETFs + options below and the
INT/LT composite. No chart.
For the SPX, I am switching to hybrid 2X ETFs plus SPX options. Taking a look at the
INT term composite (outlook 2 to 4 mns), bearish sentiment remains near
neutral.
For the NDX combining the hybrid ETF options plus NDX 3X ETF sentiment with the interest rate effect,
(outlook 2 to 4 mns) bearish sentiment shows similar extremes between ETF and
options as in late 2020 which resulted in a choppy market until options
sentiment rose. Note QQQ options are optimal, but are N/A and are included
in ETF options.
Bearish sentiment moved back toward a weak Sell.
For the SPX combining the hybrid ETF options plus SPX 2X ETF (outlook 2 to 4 mns)
produces an indicator where, in this case, ETF options are a proxy for the SPY options.
Bearish sentiment for SPX moved back toward a weak Sell.
III. Options Open Interest
Using Thur closing OI, remember that further out time frames are more likely
to change over time, and that closing prices are more likely to be effected.
Delta hedging may occur as reinforcement, negative when put support is broken
or positive when call resistance is exceeded. This week I will look
out thru ay 29. A text overlay is used for extreme OI to improve readability,
P/C is not changed. A new addition is added for OI $ amounts with breakeven pts (BE) where
call & put $ amounts cross. Note multiply OI$ by 100 for shares/contract.
With Fri close at SPX 7473, options OI for Tue is moderate with call resistance
at 7475 (weak) and 7500 (strong) and put support 7350 and 7375.
Wed has small SPX OI where there is little call resistance above and put support
at 7300 and 7400. Likely effected by Fri OI.
For Fri EOM moderate/large SPX OI shows strong call resistance 7400-500 and put
support 7150 and 7200. May see retest of 7300-350 area.
For Fri June 18AM monthly exp (Fri June 19th holiday) large SPX OI shows call
resistance over 7400 and put support at 7200 and below. Possible range
7200-7400.
IV. Technical / Other
The following uses barcharts.com as a source and discusses S&P futures (ES) as a third
venue of stock sentiment in addition to options and ETFs. The non-commercial/commercial
spread represents a LT bearish sentiment (dumb money/smart money) indicator. As explained in investopedia,
commercial investors (red) are institutions and are smart money, while non-commercials (green) are speculators such as
hedge funds and are dumb money. Here is the current barchart graph
for the S&P 500 (top) and trader positions (1st bot) with positives as net longs and negatives
as net shorts.
Bearish sentiment is represented by the spread and is positive if red > green
(Buy) and negative if green > red (Sell). ES (SPX) sentiment remains positive at + 0.6 SD, NQ (NDX)
is neutral at -0.0
SD, YM (DJIA) is positive at +0.5 SD.
A quick look at gold (GC), bearish sentiment is in-between a weak and strong Sell at -1.5 SD.
Click dropdown list to select from the following options:
Tech / Other History
2026
2025
2024
2023
2022
Other Indicators
Conclusions. As I write this the
IG-Weekend quotes are showing oil
(WTI/bbl) down over $7 and US stocks up about 1%, so perhaps "the deal" will get
done. Headlines indicate that Iran will receive about $110B of unfrozen
assets and be allowed to freely sell oil and gas in return for safe passage for
all thru the Strait of Hormuz. Nuclear material disposition is to be
settled later.
Weekly Trade Alert. Higher prices look likely if the deal follows
thru. Updates @mrktsignals.
As warned last week, some analyst were looking for SPX
7500-600 and the SPX rallied from 7400 to 7517 Mon-Thur even as oil rallied back
to $100/bbl (WTI) after Iran talks faltered. Almost half of the rally was due to a 10% rally in NVDA (8% of SPX) after Trump added its CEO to the China entourage and much of the
rest was AAPL and MSFT which all together make almost 20% of the SPX.
Disappointment over China's reluctance to intervene with Iran did lead to a late
in the week selloff for the monthly options exp which gave up most of the weekly
gains. May 14 was a Bradley turn date so a multi-day pullback is likely
and the SPX options OI is indicating that the mid-low 7200s may be a target for
the EOM. Musk announced the SpaceX IPO (SPCX) with be thru NASDAQ in June
which may provide a final push to NDX 30k before a larger summer pullback.
The bigger news may be that the global bond market is becoming worried about
rising inflation as higher oil prices work thru the economies. Both CPI
and PPI in the US are back to levels not seen since 2022 and last week the TNX
rose from 4.4 to 4.6% with a Fri gap over the important 4.5% level. The
CME FedWatch is now showing a 99%
chance of no rate cut in June, a 20% chance of a hike in Sept, and a 50% chance
of a hike in Dec. Much may depend on whether Trumps blockade of the Strait
of Hormuz succeeds in getting Iran to make a deal, but a lot of damage has
already been done.
INT/LT bearish sentiment saw a large drop thru Thur. especially in hte ETF
Put/Call measures such as the hedge spread and SPX & NDX ETF and ETF Put & Call
indicators. Each of the above reached a strong Sell VST indicating a
multi-day pullback is likely. The DM/SM also reached the strong Sell VST
and is starting to look a lot like the late 2022 sentiment.
I. Sentiment Indicators
The INT/LT Composite indicator (outlook 3 to 6+ months) has three separate
components. Starting Aug 26, 2023 SPX options are removed due to extreme 0DTE volume
distortions. New weights are ETF put-call indicator (30%), SPX 2X ETF INT
ratio (40%), and 3rd a volatility indicator (30%) which combines the options
volatility spread of the ST SPX (VIX) to the ST VIX (VVIX) with the UVXY $ volume.
Update Alt, INT view. Bearish sentiment fell sharply to between a weak and
strong Sell based on very low ETF P/C.
Update Alt EMA. Bearish sentiment fell sharply thru Thur to a strong Sell
VST (grn) before
reversing Fri to a weak Sell.
The ST Composite as a ST (1-4 week) indicator includes the NYSE volume ratio
indicator (NYDNV/NYUPV & NYDNV/NYDEC) and the UVXY $ Vol/[SPX Trend, SMA only]. Weights
are 80%/20%.
Update. Bearish sentiment is well above a weak Buy based on weak up vol &
strong down vol.
Update EMA. Bearish sentiment remains over a weak Buy.
The ST VIX calls and SPXADP indicator bearish sentiment remains slightly
above neutral.
The ST/INT Composite indicator (outlook 1 to 3 months) is based on the Hedge Spread (52%)
and includes ST Composite (12%) and three options FOMO indicators using SPX (12%),
ETF (12%), and Equity (12%) calls compared to the NY ADV/DEC issues (inverted). FOMO
is shown when strong call volume is combined with strong NY ADV/DEC. See
Investment Diary
addition for full discussion.
Update EMA. Bearish sentiment continued to fall based on the FOMO calls and
ETC P/Cs and is now LT (blu) at levels seen at the early 2022 and 2025 tops.
Update FOMO calls. Bearish sentiment remains at the weak Sell level.
Bonds (TNX). Bearish sentiment remains at low extremes as global
int rates rose sharply Fri with oil (WTI/bbl) up over 10% for the week as the
Iran bottleneck continued and China showed little interest in intervening.
On Fri, TNX jumped from 4.46 to 4.6%, breaking out over the 4.5% level.
For the INT outlook, the gold miners (HUI) bearish
sentiment is presented in a new format using the data mining software to add
the inverse TNX rate to the ETF ratio.
Update. Bearish sentiment from higher int rates and the US $ overshadowed higher
Inflation as sentiment remains near a weak Sell. If the prior three year
cycle prevails, the 68% retracement of the last major move up targets about the 500 level.
II. Dumb Money/Smart Money Indicators
This is a new hybrid option/ETF Dumb Money/Smart Money Indicator as a INT/LT
term (outlook 2-6 mns) bearish sentiment indicator. The use of ETFs
increases the duration (term).
Update. Bearish sentiment continued to fall for the week and is starting to
look like the late 2021 setup.
With the sister options Hedge Spread as a ST/INT indicator
(outlook 1-3 mns), bearish sentiment fell sharply with the LT (blu) sentiment
matching the Jan 2025 top and VST (grn) matching the late 2021 levels.
A new composite SPX options indicator uses both the volume adj (1/B-A) and P/C
equivalent spread (A-B) to compensate for the discrepancy between the two.
This replaces the old SPX options indicator for the SPX ETFs + options below and the
INT/LT composite. No chart.
For the SPX, I am switching to hybrid 2X ETFs plus SPX options. Taking a look at the
INT term composite (outlook 2 to 4 mns), bearish sentiment remains near
neutral.
For the NDX combining the hybrid ETF options plus NDX 3X ETF sentiment with the interest rate effect,
(outlook 2 to 4 mns) bearish sentiment shows similar extremes between ETF and
options as in late 2020 which resulted in a choppy market until options
sentiment rose. Note QQQ options are optimal, but are N/A and are included
in ETF options.
Bearish sentiment has dropped from a strong Buy early Apr to a strong Sell
based on the ETF Puts & Calls and NDX ETFs.
For the SPX combining the hybrid ETF options plus SPX 2X ETF (outlook 2 to 4 mns)
produces an indicator where, in this case, ETF options are a proxy for the SPY options.
Bearish sentiment for SPX has dropped from a strong Buy early Apr to a strong
Sell based on the ETF Puts & Calls and SPX ETFs.
III. Options Open Interest
Using Thur closing OI, remember that further out time frames are more likely
to change over time, and that closing prices are more likely to be effected.
Delta hedging may occur as reinforcement, negative when put support is broken
or positive when call resistance is exceeded. This week I will look
out thru May 22 & EOM. A text overlay is used for extreme OI to improve readability,
P/C is not changed. A new addition is added for OI $ amounts with breakeven pts (BE) where
call & put $ amounts cross. Note multiply OI$ by 100 for shares/contract.
With Fri close at SPX 7408, options OI for Mon is moderate with most put support OTM
7200-300. BE is 7400 due to straddle at 7500 and put support at 7400.
Expect limited downside.
Wed SPX OI is small/moderate with a BE at 7335, but the straddle at 7400 is
likely to limit downside to mid 7300s.
For Fri SPX OI is moderate with strong call resistance over 7500 and strong put
support at 7300. The low BE at 7305 indicates more downside potential to
low/mid-7300s.
For Fri EOM strong SPX OI is predominately calls over 7300 with put support
around 7200, indicating a move below 7300 to mid-7200s is likely.
IV. Technical / Other
The following uses barcharts.com as a source and discusses S&P futures (ES) as a third
venue of stock sentiment in addition to options and ETFs. The non-commercial/commercial
spread represents a LT bearish sentiment (dumb money/smart money) indicator. As explained in investopedia,
commercial investors (red) are institutions and are smart money, while non-commercials (green) are speculators such as
hedge funds and are dumb money. Here is the current barchart graph
for the S&P 500 (top) and trader positions (1st bot) with positives as net longs and negatives
as net shorts.
Bearish sentiment is represented by the spread and is positive if red > green
(Buy) and negative if green > red (Sell). ES (SPX) sentiment remains positive at + 0.5 SD, NQ (NDX)
is positive at +0.5
SD, YM (DJIA) is positive at +0.5 SD.
A quick look at gold (GC), bearish sentiment is in-between a weak and strong Sell at -1.5 SD.
Click dropdown list to select from the following options:
Tech / Other History
2026
2025
2024
2023
2022
Other Indicators
Conclusions. The adage "Sell on May" may turn out to be
appropriate, but seems to be unlikely to be more than a 5-6% pullback before the
welcome party for the SpaceX IPO in June. The June 16-17 FOMC may turn out
to be an important date as we get to see what agenda to expect with the new Fed
Chair, continued rise in inflation could present a more hawkish tone than
expected. Iran, oil and int rates are expected to be drivers for the ST.
Weekly Trade Alert. Some continued weakness is expected thru EOM
toward SPX 7200-50. Updates @mrktsignals.
Trump's insistence that a deal with Iran to open the Strait of Hormuz was
imminent every few hours for the entire week was enough to keep the bears away
and resulted in an SPX 3% NDX +6%, DJIA +1%) gain for the week as oil prices
(WTI/bbl) fell from $105 to 90 before rebounding to $94. As of today,
there is still "no deal" as the US and Iran continue to exchange pot shots even
though a cease fire is still in effect. Trump is scheduled to meet with
China's Xi late next week and his push to "make a deal" may be to save face with
China and could become hard-line after if no deal is forthcoming.
Sentiment remains rather sanguine given the relentless rally in techs.
The ST Composite remains near a weak Buy, while INT to LT indicators remain only
mildly bearish.
I. Sentiment Indicators
The INT/LT Composite indicator (outlook 3 to 6+ months) has three separate
components. Starting Aug 26, 2023 SPX options are removed due to extreme 0DTE volume
distortions. New weights are ETF put-call indicator (30%), SPX 2X ETF INT
ratio (40%), and 3rd a volatility indicator (30%) which combines the options
volatility spread of the ST SPX (VIX) to the ST VIX (VVIX) with the UVXY $ volume.
Update Alt, INT view. Bearish sentiment moved toward a weak Sell.
Update Alt EMA. Bearish sentiment fell, reaching a weak Sell VST (grn).
The ST Composite as a ST (1-4 week) indicator includes the NYSE volume ratio
indicator (NYDNV/NYUPV & NYDNV/NYDEC) and the UVXY $ Vol/[SPX Trend, SMA only]. Weights
are 80%/20%.
Update. Bearish sentiment rose to just below a weak Buy.
Update EMA. Bearish sentiment moved up to a weak Buy.
The ST VIX calls and SPXADP indicator bearish sentiment continued to rise
above neutral.
The ST/INT Composite indicator (outlook 1 to 3 months) is based on the Hedge Spread (52%)
and includes ST Composite (12%) and three options FOMO indicators using SPX (12%),
ETF (12%), and Equity (12%) calls compared to the NY ADV/DEC issues (inverted). FOMO
is shown when strong call volume is combined with strong NY ADV/DEC. See
Investment Diary
addition for full discussion.
Update EMA. Bearish sentiment moved back to a strong Sell VST (grn), but
note similarities to the rally off the Apr 2025 bottom.
Update FOMO calls. Bearish sentiment moved back to a weak Sell.
Bonds (TNX). Bearish sentiment remains at low extremes.
For the INT outlook, the gold miners (HUI) bearish
sentiment is presented in a new format using the data mining software to add
the inverse TNX rate to the ETF ratio.
Update. Bearish sentiment remains near a weak Sell.
II. Dumb Money/Smart Money Indicators
This is a new hybrid option/ETF Dumb Money/Smart Money Indicator as a INT/LT
term (outlook 2-6 mns) bearish sentiment indicator. The use of ETFs
increases the duration (term).
Update. Bearish sentiment continued to fall, now midway between a weak and
strong Sell.
With the sister options Hedge Spread as a ST/INT indicator
(outlook 1-3 mns), bearish sentiment fell to in between a weak and strong
Sell.
A new composite SPX options indicator uses both the volume adj (1/B-A) and P/C
equivalent spread (A-B) to compensate for the discrepancy between the two.
This replaces the old SPX options indicator for the SPX ETFs + options below and the
INT/LT composite. No chart.
For the SPX, I am switching to hybrid 2X ETFs plus SPX options. Taking a look at the
INT term composite (outlook 2 to 4 mns), bearish sentiment remains near
neutral.
For the NDX combining the hybrid ETF options plus NDX 3X ETF sentiment with the interest rate effect,
(outlook 2 to 4 mns) bearish sentiment shows similar extremes between ETF and
options as in late 2020 which resulted in a choppy market until options
sentiment rose. Note QQQ options are optimal, but are N/A and are included
in ETF options.
Bearish sentiment remains below neutral.
For the SPX combining the hybrid ETF options plus SPX 2X ETF (outlook 2 to 4 mns)
produces an indicator where, in this case, ETF options are a proxy for the SPY options.
Bearish sentiment for SPX is unchanged below neutral.
III. Options Open Interest
Using Thur closing OI, remember that further out time frames are more likely
to change over time, and that closing prices are more likely to be effected.
Delta hedging may occur as reinforcement, negative when put support is broken
or positive when call resistance is exceeded. This week I will look
out thru May 15. A text overlay is used for extreme OI to improve readability,
P/C is not changed. A new addition is added for OI $ amounts with breakeven pts (BE) where
call & put $ amounts cross. Note multiply OI$ by 100 for shares/contract.
With Fri close at SPX 7399, options OI for Mon is moderate with SPX well over
put support and over 7400 may cause positive delta hedging from calls.
Wed has small SPX OI with a likely range of 7375 to 7450.
For Fri May exp AM strong SPX OI shows call resistance down to 7000 and a move
to 7300 looks likely, but may be dependent on Iran news.
For Fri May exp PM SPX OI is strong/moderate and negative news from Iran could
push prices to the 7200-7350 range.
IV. Technical / Other
The following uses barcharts.com as a source and discusses S&P futures (ES) as a third
venue of stock sentiment in addition to options and ETFs. The non-commercial/commercial
spread represents a LT bearish sentiment (dumb money/smart money) indicator. As explained in investopedia,
commercial investors (red) are institutions and are smart money, while non-commercials (green) are speculators such as
hedge funds and are dumb money. Here is the current barchart graph
for the S&P 500 (top) and trader positions (1st bot) with positives as net longs and negatives
as net shorts.
Bearish sentiment is represented by the spread and is positive if red > green
(Buy) and negative if green > red (Sell). ES (SPX) sentiment remains positive at + 0.4 SD, NQ (NDX)
is slightly negative at -0.1
SD, YM (DJIA) is neutral at + 0.0 SD.
A quick look at gold (GC), bearish sentiment is in-between a weak and strong Sell at -1.5 SD.
Click dropdown list to select from the following options:
Tech / Other History
2026
2025
2024
2023
2022
Other Indicators
Conclusions. So far the analog to the 2017 meltup seems to be in
play with the narrow breadth and low Adv/Dec volume continuing. Some
analysts are looking for SPX 7500-600 and NDX 30k as possible targets, but
sentiment is not pointing to any concern of a major top. Trump is likely
to keep the Iran "cease fire" in play thru the May 14-15 meeting with China's Xi
so stocks may hold thru then, but SPX options OI is showing the potential for a
2-3% pullback if there are major surprises.
Weekly Trade Alert. No specific guidelines. Updates @mrktsignals.
