At first glance I’m seeing the high put/call ratios that we looked at on Monday start to come down as traders begin to shed their hedges. Buying volume hadn’t taken out the April S&P 500 low up until yesterday; this had previously been bullish in the sense that buyers hadn’t completely abandoned their post. However with yesterday’s action this seems to no longer be the case. We experienced a large advance in selling volume with an equal decline in buying volume according to my measurements. High beta stocks are still taking the elevator down with no base insight quite yet.
Although the decline in the S&P 500 has just been +/- 6%, well in the range of a normal correction, it feels like we’ve experienced more pain than that. We still aren’t seeing as many flashing oversold indicators as one would expect, not even in the financial sector although it has busted through its support level. The S&P still is playing with its lower Bollinger Band, pushing it lower with each passing day.
Gold has broken $1550 which was a level many traders were watching to see if it would hold, next up will be $1475-$1480.
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