I am still leaning toward additional weakness for the S&P 500 (NYSEARCA:SPY) and stock market as a whole before seeing upside resolution. I’ve shared several indicators that highlight my near-term concerns and offered support levels/targets that I will be buying into. Â (Read: October Stock Market Weakness May Resolve To New Highs)
Well, here’s another smart money stock indicator that’s flashing a near-term sell signal.
Below is a chart of the 10-day OEX put/call P/C ratio. This is a smart money stock indicator unlike the equity-only Put/Call ratio. In other words, when the OEX P/C ratio is high, smart money is bearish and it’s best to follow them. When the equity-only Put/Call is high, we fade them or do the opposite.
As can be seen below, whenever the 10 day has reached these levels of late, market weakness (small & large) generally follows. This would suggest that the 2,120 area that I’ve highlighted on the S&P 500 Index (INDEXSP:.INX) may finally get taken out. As I have been saying, I would use this weakness to raise equity exposure.
Thanks for reading.
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The author has a long position in S&P 500 related securities at the time of publication. Any opinions expressed herein are solely those of the author, and do not in any way represent the views or opinions of any other person or entity.
