The RSI and Double Smoothed Stochastics (DSS) - something I never mentioned before on this blog - have rolled over for both the RUT the SPX. This does not mean the price of these indexes will fall immediately, but it provides a basis to start trading more sideways price action in the future.
The pull back has helped our P&L and at the same time, gave me chance to add another put spread on the NDX. This time I just added a 4820/4790 for $3.10 credit that expires in two days. We still have the 4810/4825 call spread on that we have been rolling. The trade is neutralized now with the current put spread.
As we close out the month in the next two days the market might fit into its usual late November - early December weakness. This should be seen as a buying opportunity and set up for a strong finish into the end of the year.
McMillan's indicators are all on bullish signals, and the total Put/Call ratio has given a price target of nearly 2300 on the SPX. However, VIX has been trending higher, and today the VXST almost closed higher than the VIX. So some more weakness is possible.
