According to McMillan's analysis the Put/Call ratio's 21 day moving average is rolling over to move higher off very low levels on the chart. This could mark the warning sign that a pullback is ahead. Volatility levels are extremely low - especially the VXST trading below 9! Low short term VIX levels don't last long. On a multi-year chart, low levels of the VXST have corresponded with at least short pullbacks in the market.
Today, was a tricky day for the call spread on the SPX. I initially rolled it out to Jan 17 for a 40 cent credit early in the day. Then as the market pulled back, I closed it out for a total price of 75 cents. We captured 50 cents profit on the trade overall.
Earnings season starts on Friday with several big banks reporting. January expiration week is next week, and historically, its usually a weaker one. If the market moves up these next few days, I will look to put on more bear call spreads.
