We are finally getting a pullback after trading in a very tight range after a huge rally. Usually these pullbacks get bought. Crude oil is obviously the biggest factor here as it has broken 40 with ease, without any bounces on the way down. Bonds are not acting very well considering the stock market weakness, and that is another negative factor.
On the other hand, it didn't take much for the put activity to get heavy, as we saw an elevated put/call ratio yesterday and even higher today. A bit surprising considering the small pullback, but people get bearish quickly these days, and get bullish quickly. So it would not surprise me if we are back to the old 2060-2075 range by next week. Usually these range breakouts off a tight range are false and usually retrace back to the range.
Don't have a strong opinion here, but I just don't see a big pullback yet until we consolidate some more and get the market set up for a fall. So its probably a BTFD market for a few more weeks.
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